SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended March 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
Commission File Number 000-28115
INTELLIWORXX, INC.
------------------
(Name of Small Business Issuer in its Charter)
Florida 59-3336148
------- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1819 Main Street, 11th Floor Sarasota, Florida 34236
----------------------------------------------------
(Address of principal executive offices, including zip code)
(941) 365-7790
--------------
(Issuer's Telephone Number)
N/A
---
(Former name, address and fiscal year, if changes since last year)
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 ( X ) NO ( )
State the number of shares outstanding of each of the registrant's classes of
common equity, as of the latest practicable date: As of May 19, 2000, 17,189,771
shares of common stock, no par value (the registrant's only class of voting
stock) were outstanding.
<PAGE>
PART I-FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report 3
Balance Sheet 4
Statement of Operations 5
Statement of Stockholders' Equity (Deficit) 6
Statement of Cash Flows 7
Notes to Condensed Financial Statements 8
2
<PAGE>
ALESSANDRI & ALESSANDRI, P.A.
Certified Public Accountants
Independent Auditors' Report
Intelliworxx, Inc.
Sarasota, Florida
We have reviewed the accompanying balance sheet of Intelliworxx, Inc.
("Company") as of March 31, 2000 and the related condensed statements of
operations, and cash flows for the period then ended and the statement of
stockholders' equity for the period from inception (February 12, 1998) to March
31, 2000, 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 Intelliworxx, Inc.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit 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.
As discussed in Note 2 to the condensed financial statements, certain
conditions indicate that there is substantial doubt about the Company's ability
to continue as a going concern. The accompanying condensed financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Alessandri & Alessandri, P.A.
---------------------------------
Alessandri & Alessandri, P.A.
May 22, 2000
- --------------------------------------------------------------------------------
Accountants & Consultants
5121 Ehrlich Road - Suite 107-B - Tampa, Florida 33624
(813) 969-1995 - Fax (813) 960-2740
Member: American Institute of Certified Public Accountants/Division of CPA Firms
-- Member: Florida Institute of Certified Public Accountants
3
<PAGE>
<TABLE>
<CAPTION>
INTELLIWORXX, INC.
BALANCE SHEET
MARCH 31, 2000
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 471,113
Accounts receivable-trade 317,318
Inventory (at acquisition cost-not in excess of market) 1,473,689
Other receivables and prepaid expenses 352,330
------------
Total Current Assets 2,614,450
------------
EQUIPMENT AND FURNITURE
Equipment and furniture, at cost (net of depreciation of $242,893) 422,865
------------
OTHER ASSETS
Software license and license deposits, at cost (net of amortization of $24,909) 189,621
Employee notes receivable and other 122,502
------------
Total Other Assets 312,123
------------
TOTAL $ 3,349,438
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 443,314
Wages and related taxes payable 646,670
Other (including capitalized leases payable-current portion) 273,570
Accrued Litigation (net of restricted donated capital of $2,000,000) 1
------------
Total Current Liabilities 1,363,555
------------
LONG-TERM LIABILITIES:
Capitalized leases payable (less current portion of $28,409) 14,433
------------
Total Liabilities 1,377,988
------------
STOCKHOLDERS' EQUITY
Preferred stock - no par value; 25,000,000 shares authorized; none issued
Common stock - no par value; 100,000,000 shares authorized; shares
issued and outstanding 17,189,771 8,857,156
Donated capital - (restricted) 2,000,000
Retained earnings (deficit) (8,885,706)
------------
Total Stockholders' Equity 1,971,450
------------
TOTAL $ 3,349,438
============
See Notes to Condensed Financial Statements.
4
</TABLE>
<PAGE>
INTELLIWORXX, INC.
STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDING MARCH 31, 2000 AND 1999
Three Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
REVENUES $ 539,512 $ 893,626
COST OF REVENUES 401,450 390,179
------------ ------------
GROSS PROFIT 138,062 503,447
------------ ------------
OPERATING EXPENSES:
General and administrative 510,710 315,492
Sales and marketing 350,289 202,603
Research and development 360,394 214,644
Depreciation and amortization 46,242 31,518
------------ ------------
Total Operating Expenses 1,267,635 764,257
------------ ------------
LOSS BEFORE OTHER ITEMS (1,129,573) (260,810)
OTHER INCOME & EXPENSE
Interest and miscellaneous income 11,720
Interest expense (106,188) (49,734)
Litigation expense (2,000,000)
------------ ------------
NET LOSS $ (3,224,041) (310,544)
============ ============
Loss per share $ (0.20) $ (0.02)
Weighted average number of shares 16,158,780 14,683,833
See Notes to Condensed Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
INTELLIWORXX, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (February 12, 1998) TO MARCH 31, 2000
Retained
Common Stock Earnings
Shares $ (Deficit)
------------ ------------ ------------
<S> <C> <C> <C>
Issuance of founders shares 999,900
Shares issued to reflect reverse
purchase acquisition 12,000,000 $ 564,748
Proceeds from issuance of common stock 1,000,100 250,100
Common stock issued for liabilities 66,666 100,000
Net Income (Loss) $ (1,453,240)
------------ ------------ ------------
Balance, December 31, 1998 14,066,666 914,848 (1,453,240)
Issuance of shares for notes payable 132,500 265,000
Sale of common stock 1,000,000 750,000
Net Income (Loss) (4,208,425)
------------ ------------ ------------
Balance, December 31, 1999 15,199,166 1,929,848 (5,661,665)
Issuance of shares for notes payable 1,127,047 3,944,734
Sale of common stock 863,558 2,982,574
Donated Capital - (restricted) 2,000,000
Net Income (Loss) (3,224,041)
------------ ------------ ------------
Balance, March 31, 2000 17,189,771 $ 10,857,156 $ (8,885,706)
============ ============ ============
See Notes to Condensed Financial Statements.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTELLIWORXX, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDING MARCH 31, 2000 AND 1999
Three Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net Loss From Operations: $(3,224,041) $ (310,544)
Add: Non-Cash Items
Depreciation and amortization 46,242 31,518
Litigation expense 2,000,000
Changes in Assets and Liabilities:
Accounts receivable (433,259) (400,561)
Inventory (425,138) (546,960)
Prepaid expenses and other assets (45,059) (176,205)
Accounts payable (220,865) 662,018
Wages and related taxes (29,681) 127,617
Accrued interest and other liabilities (376,913) 30,962
----------- -----------
Net Cash To Operating Activities (2,708,714) (582,155)
----------- -----------
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Acquisition of equipment, furniture and software licenses (104,692) (120,322)
Proceeds from payment of notes receivable 111,535
Notes receivable (53,000)
----------- -----------
Net Cash To Investing Activities (46,157) (120,322)
----------- -----------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Proceeds from borrowings 710,000 56,023
Repayment of borrowings (927,878) (72,096)
Proceeds from sale of common stock 2,982,574 750,000
----------- -----------
Net Cash From Financing Activities 2,764,696 733,927
----------- -----------
Increase in Cash 9,825 31,450
Cash Balance, Beginning 461,288 76,526
----------- -----------
Cash Balance, Ending $ 471,113 $ 107,976
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 411,016 $ 16,401
See Notes to Condensed Financial Statements.
7
</TABLE>
<PAGE>
INTELLIWORXX, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2000
1. HISTORY AND OPERATIONS
- -------------------------
Intelliworxx, Inc. ("Company"), was organized on February 12, 1998 under the
laws of the State of Florida. Since inception, its primary business has been the
development of specialized computer program applications and certain related
computer hardware.
2. BASIS OF ACCOUNTING
- ----------------------
The financial statements of the Company as of March 31, 2000 and 1999 and for
the three-month period then ended have been prepared on the basis that the
Company is a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. For the period
from inception (February 12, 1998) to March 31, 2000, the Company has incurred
losses totaling $8,885,706, which has significantly impacted the liquidity and
capital resources of the Company, and raises substantial doubt about the ability
of the Company to continue as a going concern. On May 12, 2000 a Federal civil
jury rendered a verdict against certain officers of the Company and the Company
in a case involving allegations of breach of prior employment agreements and
breach of fiduciary duty on the part of the officers/directors and interference
with a certain prospective customer relationship of the plaintiff. For more
details reference Note 6. No adjustments have been recorded in the financial
statements of the Company to reflect the uncertainty of the going concern and
the related realization of assets and satisfaction of liabilities.
Since inception (February 12, 1998) to March 31, 2000, the Company met its cash
needs primarily from short-term borrowings from individuals, private placements
of 2,863,558 of its common shares and 144,116 of common share warrants for
$4,022,500, and from revenues of $539,512 in the first three months of 2000,
$1,986,839 in 1999 and $1,096,448 in 1998. Management expects to achieve its
future cash needs from a combination of sales of its equity securities and
borrowings, pending attainment of profitable operations.
During the first quarter of 2000, the Company converted $3,944,734 of short-term
debt into 1,127,047 common shares.
8
<PAGE>
3. INVENTORIES
- --------------
At March 31, 2000, inventories were comprised as follows:
Raw materials $1,010,892
Work in process 242,524
Finished product 220,273
----------
Total $1,473,689
==========
4. COMMON STOCK:
- ----------------
The Company is authorized to issue 100,000,000 shares of common stock. Dividends
are available when declared by the Company. At March 31, 2000, there were
17,189,771 of the common shares outstanding.
In January and February 2000, the Company sold, in accordance with Regulation D
of the United States Securities Act of 1933, 863,558 common shares and 114,116
warrants for $2,982,574, net of expenses. The warrants grant the holder the
right to purchase common shares at $3.00 per share and are exercisable during
the five-year period from date of issuance. In connection with the sale of the
shares and warrants, the Company agreed to include the common shares and
warrants in a registration statement with the Securities and Exchange Commission
on or before July 1, 2000.
In March 2000, the Company converted $3,944,734 of notes payable and accrued
interest into equity (1,127,047 common shares of the Company and warrants to
purchase 65,724 common shares of the Company at $3.00 per share until February
2005).
5. REVENUES
- -----------
During the three months ended March 31, 2000, the Company recorded total
revenues of $539,512, which consisted of $242,012 from product sales and
$297,500 from engineering and development project revenues.
6. LEGAL
- --------
On May 12, 2000 a Federal Court issued a judgment following a jury verdict in a
legal action against two officers/directors of the Company and the Company
brought by the former employer of the officers/directors. The plaintiff in the
legal action claimed damage resulted from breach of employment contracts and
breach of fiduciary duty as to the officers/directors and interference in a
business relationship with respect to the officers/directors and the Company.
The officers/directors had previously entered into common share indemnification
agreements with the Company.
The judgment awarded damages against the defendants, including up to $12 million
against the Company. The amounts determined by the jury were significantly in
excess of the amount of damages claimed by the plaintiff.
9
<PAGE>
Because of the excessive amounts, certain alleged trial errors that may have
prejudiced the jury, and other errors, attorneys for the Company have filed
post-trial motions to vacate the judgment, and enter a judgment in favor of the
Company, and in the alternative motions for a new trial and remitter (reduction)
of the aforementioned amounts. In the event that the result of the post-trail
motions are not acceptable to the Company, an appeal to a higher court is also
available to the Company. Actions to enforce the judgment are stayed pending
resolution of the post-trial motions. Attorneys for the Company believe that the
court must reduce the judgment amounts with respect to the Company because,
amongst other reasons, as matter of law the adjudicated amounts are not
supported by the evidence presented during the trial. The attorneys for the
Company believe that, even if the motions to set aside the judgment are not
successful, as a matter of law the maximum amount of damages the Company could
be responsible for which are legally supportable could not exceed $2,000,000. In
view of the foregoing, the Company has recorded a liability of $2,000,000 as of
March 31, 2000.
As previously disclosed, the officers/directors had previously entered into an
indemnification agreement with the Company to mitigate any effect that the legal
action could have upon the Company. Accordingly, the officers/directors have
surrendered to the Company, as restricted contributed capital, 571,430 common
shares of the Company. In the event the Company has to issue more shares than
the number contributed to liquidate any amounts assessed against the Company,
the officers/directors will contribute additional shares up to their respective
holdings. The officers/directors and the Company have also agreed to place
decisions concerning the liquidation of shares in satisfaction of or to raise
capital to pay such liabilities in a committee consisting solely of the outside
members of the board of directors.
For financial reporting purposes, the 571,430 contributed shares have been
valued at $3.50 per share (approximately $2,000,000). The discounted per share
value reflects the restricted nature of the shares, the daily trading volume of
the Company's shares, and the value per share reflected in the most recent
private placement offering and conversion of debt into common shares. Because
proceeds from the contributed shares are restricted to liquidation of any
liability to the Company from the legal action, the value ascribed to the
contributed shares has been offset against the liability.
7. EARNINGS (LOSS) PER SHARE
- ----------------------------
Earnings (loss) per share is based upon the weighted average number of common
shares outstanding during the period. Diluted earnings (loss) per share is not
presented because the outstanding options and warrants to purchase common shares
would cause an anti-dilutive affect upon the diluted earnings (loss) per share.
8. RECLASSIFICATIONS
- --------------------
Certain amounts for the three-month period ended March 31, 1999 have been
reclassified to conform to the three-month period ended March 31, 2000
presentation.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Introduction
- ------------
This discussion summarizes the significant factors affecting the operating
results, financial condition and liquidity/cash flow of the Company during the
three-month periods ending March 31, 2000 and March 31, 1999. This item should
be read in conjunction with the condensed financial statements and notes to the
condensed financial statements included herewith.
Results of Operations
- ---------------------
Revenues for the three-month period ended March 31, 2000 totaled approximately
$540,000, as compared to $894,000 for the same period last year, or a decrease
of approximately 40%. Revenues for the three-month period ended March 31, 2000
consists of revenue from engineering and development project contracts
("Development Contracts") with a major US automotive manufacturer and a major
provider of mobile, hand-held computers totaling approximately $297,000, and
product sales totaling approximately $242,000. Revenues for the three-month
period ended March 31, 1999 totaled approximately $894,000 consisting entirely
of Development Contracts.
Cost of revenues for the three-months ended March 31, 2000 totaled approximately
$401,000, as compared to approximately $390,000 for the same period in 1999.
Gross Profit as a percentage of sales, decreased from 56% for the three-months
ended March 31, 1999 to 26% for the three-months ended March 31, 2000. This
decrease in Gross Margin percentage reflects the Company's increase in product
sales that result in a lower gross profit than Development Contracts and a
decrease in revenues from Development Contracts. During March 2000, the Company
began shipping its voice tablet and auto pc products lines.
Selling, general and administrative expenses for the three-months ended March
31, 2000 totaled approximately $861,000, an increase of 66% over the same period
last year ($518,000). This increase reflects the buildup of the Company's
infrastructure to support expected growth. Research and Development expenses for
the three-month period ended March 31, 2000 totaled approximately $360,000, an
increase of 67% over the same period last year ($215,000). This increase in
Research and Development expense reflects the Company's reduction in Development
Contracts and its focus on internal research and development efforts related to
new and existing products.
Liquidity and Capital Resources
- -------------------------------
The Company has financed its operations and capital expenditures primarily
through short-term credit facilities, the sale of the Company's common stock and
cash flow from operations. The Company has also used long-term, capitalized
lease transactions to finance capital expenditures. For the three-month period
11
<PAGE>
ending March 31, 2000, the Company's primary source of cash was from the sale of
common stock in a private placement offering in which proceeds to the Company
totaled approximately $2,983,000, net of expenses, from the sale of 863,558
shares of its common stock and warrants to purchase 114,116 shares of the
Company's common stock. Cash was also provided through other financing
activities totaling $710,000 and cash from operations totaling approximately
$312,000.
Also during the three-months ended March 31, 2000, promissory note holders
converted approximately $3,945,000 in short-term debt in exchange for 1,127,047
shares of common stock and warrants to purchase 65,725 shares of the Company's
common stock. Simultaneously, the Company repaid certain other promissory note
holders resulting in a reduction of approximately $1,400,000 in short-term debt.
As a result of the conversions and debt repayment the Company greatly reduced
its monthly interest payments. Although there can be no assurance of continued
debt and/or equity financing, the Company expects to be able to meet its debt
obligations and to finance operations and capital expenditures through
internally generated funds, future borrowing, capital lease transactions and
additional sales of common stock.
The Company's cash totaled approximately $471,000 on March 31, 2000. Capital
expenditures for the three-months ended March 31, 2000 totaled approximately
$105,000, spread evenly between the manufacturing departments, the research and
development departments and the general and administration departments.
On May 12, 2000 a Federal civil jury rendered a verdict against certain officers
of the Company and the Company in a case involving allegations of breach of
prior employment agreements and breach of fiduciary duty on the part of the
officers/directors and interference with a certain prospective customer
relationship of the plaintiff. The jury awarded damages of up to $12 million
against the Company and additional amounts against the other officer/director
defendants, but the enforcement of such judgment is stayed pending the Court's
hearing of the Company's and the other defendant's motion to set aside or limit
the judgment to an amount consistent with the legal principles governing the
case. As a result, as of March 31, 2000, the Company recorded an estimated
liability of $2,000,000 against which the restricted donated capital with an
ascribed value of $2,000,000 was offset. (See Note 6 to the Condensed Financial
Statements).
12
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL
From time to time, the Company is a party to litigation, which arises, in the
normal course of business. There is no litigation pending, or to the Company's
knowledge, threatened that, if determined adversely, would have a material
adverse effect upon the business or financial condition of the Company.
On May 12, 2000 a Federal civil jury rendered a verdict against certain two
officers/directors of the Company and the Company in a case involving
allegations of breach of employment contracts and breach of fiduciary duty as to
the officers/directors and interference in business relationships with respect
to the officers/directors and the Company.
The jury found that the actions of the officers/directors amounted to breaches
of their prior employment contracts and their fiduciary obligations to the
plaintiff and that one of the officers and the Company interfered with
plaintiff's efforts to obtain a prospective business relationship. The jury
awarded damages of up to $12 million against the the Company, and additional
amounts against the officer/director defendants, but the enforcement of such
judgment is stayed pending the Court's hearing of the Company's and the other
defendant's motion to set aside or limit the judgment to an amount consistent
with the legal principles governing the case. In addition, the
officers/directors had previously entered into an indemnification agreement
with the Company under which the officers/directors assumed responsibility for
any judgment. Provisions of the agreement stipulated that shares of the Company
owned by the officers/directors might be used to satisfy any liability of the
Company.
Item 2. CHANGES IN SECURITIES
On February 12, 2000, the Company issued 1,127,047 shares of its common stock
and warrants to purchase an aggregate of 65,725 shares of the Company's common
stock in satisfaction of certain notes payable and accrued interest totaling
approximately $3,945,000. Each warrant entitles the holder to purchase a share
of the Company's common stock at a rate of $3.00 per share. The warrants expire
on January 12, 2005. The convertible instruments were issued to 41 individuals,
trusts and companies in a non-public offering exempt from registration pursuant
to Section 4(2) of the Act and the conversion of the instruments is exempt from
registration pursuant to Section 3(a)(9) of the Act.
On March 3, 2000, the Company completed a private placement offering consisting
of an aggregate of 863,558 shares of common stock of the Company and warrants to
purchase an aggregate of 144,116 shares of the Company's common stock. The
offering price was $3.50 per share and the Company's net proceeds to the Company
totaled approximately $2,988,000. Each warrant entitles the holder to purchase a
share of the Company's common stock at a rate of $3.00 per share. The warrants
expire on January 12, 2005. The offering was sold to 23 accredited investors in
a non-public offering exempt from registration pursuant to Section 4(2) and Rule
506 of Regulation D of the Act. In connection with the sale of the shares and
warrants, the Company agreed to include the common shares and warrants in a
registration statement with the Securities and Exchange Commission on or before
July 1, 2000.
13
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
INDEX TO EXHIBITS
Exhibit Description of Document
- ------- -----------------------
2.0 Agreement and Plan of Reorganization by and among Outdoor Resorts,
Inc., Intelliworxx, Inc., and Kevin B. Rogers, Michael P. Jonas,
Donald H. Pound, Jr., Vincent D. Reynolds, Ian N. Whitehead, and
Christopher J. Floyd, the Shareholders of Intelliworxx, Inc., dated
November 23, 1998.(a)
3.0(i) Articles of Incorporation for Outdoor Resorts, Inc. (now known as
Intelliworxx, Inc.) filed July 1, 1995.(a)
3.1(i) Articles of Merger of Intelliworxx, Inc. with and into Outdoor
Resorts, Inc. and Articles of Amendment to Articles of
Incorporation of Intelliworxx, Inc., f/k/a Outdoor Resorts, Inc.,
filed December 1, 1998.(a)
3.0(ii) Bylaws.(a)
99.0 Form of Stock Certificate.(a)
99.1 Intelliworxx, Inc. 1999 Equity Incentive Plan.(a)
(a) Filed as an exhibit to Report on Form 10-SB dated November 15, 1999.
REPORTS ON FORM 8K
None
14
<PAGE>
SIGNATURES
In accordance with the requirements the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTELLIWORXX, INC.
Date: May 22, 2000 by: /s/ Kevin B. Rogers
- ------------------ -----------------------
Kevin B. Rogers, Chairman of the
Board, Chief Executive Officer and
President
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 471,113 107,976
<SECURITIES> 0 0
<RECEIVABLES> 317,318 639,407
<ALLOWANCES> 0 0
<INVENTORY> 1,473,673 757,088
<CURRENT-ASSETS> 2,614,450 1,526,387
<PP&E> 665,758 438,978
<DEPRECIATION> 242,893 86,401
<TOTAL-ASSETS> 3,349,438 2,124,495
<CURRENT-LIABILITIES> 1,363,555 1,925,340
<BONDS> 0 0
0 0
0 0
<COMMON> 8,857,156 1,929,848
<OTHER-SE> (10,885,706) (1,763,784)
<TOTAL-LIABILITY-AND-EQUITY> 3,349,438 2,124,495
<SALES> 539,512 893,626
<TOTAL-REVENUES> 539,512 893,626
<CGS> 401,450 390,179
<TOTAL-COSTS> 401,450 390,179
<OTHER-EXPENSES> 1,267,635 764,257
<LOSS-PROVISION> 2,000,000 0
<INTEREST-EXPENSE> 106,188 49,734
<INCOME-PRETAX> (3,224,041) (310,544)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (3,224,041) (310,544)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (3,224,041) (310,544)
<EPS-BASIC> (0.200) (0.021)
<EPS-DILUTED> (0.200) (0.021)
</TABLE>
