UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly report ended March 31, 2000
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to ______________
Commission File number: 000-27715
E-VEGAS.COM, INC.
(Exact name of small business issuer as registrant as specified in charter)
Nevada 94-3342064
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1128-789 w. Pender, Vancouver, B.C. V6C1H2
(Address of principal executive office)
Registrant's telephone no., including area code (604) 608-6828
Check 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), Yes [X]
No [ ] and (2) has been subject to such filing requirements for
the past 90 days. Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Class Outstanding as of March 31, 2000
Common Stock, $0.001 24,420,817
TABLE OF CONTENTS
Heading Page
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets - March 31, 2000
And March 31, 1999 6
Consolidated Statements of Operations - three months
Ended March 31, 2000 and 1999 8
Consolidated Statements of Stockholders' Equity 9
Consolidated Statements of Cash Flows - three
Ended March 31, 2000 and 1999 10
Notes to Consolidated Financial Statements 12
Item 2. Management's Discussion and Analysis and
Result of Operations 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Security 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matter to a Vote of
Securities Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports of Form 8-K 19
Signatures 20
Item 1. Financial Statement
The following unaudited Financial Statements for the period ended
March 31, 2000 have been prepared by the Company.
E-VEGAS.COM, INC.
FINANCIAL STATEMENTS
March 31, 2000 and December 31, 1999
C O N T E N T S
Independent Accountants' Review Report 3
Balance Sheets 4
Statements of Operations 6
Statements of Stockholders' Equity 7
Statements of Cash Flows 9
Notes to the Financial Statements 11
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
E-Vegas.com, Inc.
San Jose, Costa Rica
We have reviewed the accompanying balance sheet of E-Vegas.Com,
Inc. as of March 31, 2000 and the related statements of operations,
stockholders' equity and cash flows for the periods ended March 31,
2000 and 1999. These financial statements are the responsibility of
the Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data, and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, which will be performed
for the full year with the objective of express 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 condensed financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards
generally accepted in the United States, the balance sheet of E-Vegas.
Com, Inc. as of December 31, 1999, and the related statements of
operations, stockholders' equity, and cash flows for the year then
ended (not presented herein) and in our report dated April 15, 2000,
we expressed an unqualified opinion on those financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
May 9, 2000
E-VEGAS.COM, INC.
Balance Sheets
ASSETS
March 31, December 31,
2000 1999
CURRENT ASSETS
Cash $ 104,685 $ 1,378
Total Current Assets $ 104,685 1,378
FIXED ASSETS (Note 1)
Vehicle 13,500 13,500
Computers and software 152,234 152,234
Office furniture and equipment 32,325 11,235
Accumulated depreciation (37,106) (25,932)
Total Fixed Assets 160,953 151,037
OTHER ASSETS
Investments, net (Note 3) 239,456 381,333
Deposits 112,862 112,862
Total Other Assets 352,318 494,195
TOTAL ASSETS $ 617,956 $ 646,610
E-VEGAS.COM, INC.
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2000 1999
CURRENT LIABILITIES
Accounts payable $ 4,500 $ 8,220
Notes payable - related
parties (Note 4) 293,081 134,656
Current portion of notes
payable (Note 6) 60,255 62,691
Accrued expenses 12,714 12,409
Gaming loss reserve 198,960 213,648
Total Current Liabilities 569,510 431,624
LONG-TERM LIABILITIES
Note payable (Note 6) 9,476 9,476
Total Long-Term Liabilities 9,476 9,476
Total Liabilities 578,986 441,100
STOCKHOLDERS' EQUITY (Note 5)
Common stock; $0.001 par
value, 50,000,000 shares
authorized, 23,420,817
and 23,680,817 shares
issued and outstanding,
respectively 24,421 23,681
Additional paid-in capital 3,304,802 2,935,542
Accumulated deficit (3,290,253) (2,753,713 )
Total Stockholders' Equity 38,970 205,510
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 617,956 $ 646,610
E-VEGAS.COM, INC.
Statements of Operations
For the
Three Months Ended
March 31,
2000 1999
REVENUES
Gaming revenues $ 328,028 $ -
Total Revenues 328,028 -
GAMING PAYOUTS 311,255 -
GROSS MARGIN 16,773 -
OPERATING EXPENSES
Management fees 37,500 32,500
Advertising and promotion 11,518 -
Depreciation and amortization 11,173 -
General and administrative 348,872 40,741
Total Operating Expenses (409,063 (73,241)
OPERATING LOSS (392,290) (73,241)
OTHER (EXPENSE)
Loss on equity investment (141,877) -
Interest expense (2,373) -
Total Other (Expense) (144,250) -
NET LOSS $ (536,540) $ (73,241)
BASIC LOSS PER SHARE $ (0.02) $ (0.00 )
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 23,680,817 12,000,000
E-VEGAS.COM, INC.
Statements of Stockholders' Equity
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
Balance, December 31, 1997 12,000,000 $ 12,000 $ 98,020 $ (79,925)
Net loss for the year ended
December 31, 1998 - - - (8,388)
Balance, December 31, 1998 12,000,000 12,000 98,020 (88,313)
March 5, 1999, common stock
issued for proprietary rights and
software recorded at $0.10 per
share 2,000,000 2,000 198,000 -
March 5, 1999, common stock
issued for cash at
$0.10 per share 1,500,000 1,500 148,500 -
April 3, 1999, common stock
issued for cash at
$0.25 per share 600,000 600 149,400 -
May 3, 1999, common stock
issued for cash at
$0.70 per share 1,000,000 1,000 699,000 -
June 30, 1999, common stock
issued for cash at
$0.25 per share 680,000 680 169,320 -
June 30, 1999, common stock
issued for investment
at $0.25 per share 1,000,000 1,000 249,000 -
Balance Forward 18,780,000 $ 18,780 $ 1,711,240 $ (88,313 )
E-VEGAS.COM, INC.
Statements of Stockholders' Equity (Continued)
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
Balance Forward 18,780,000 $ 18,780 $ 1,711,240 $ (88,313)
July 14, 1999 -
common stock issued for
cash at $0.25
per share 392,000 392 97,608 -
August 5, 1999 -
common stock issued for
cash at $0.25 per share 60,000 60 14,940 -
August 30, 1999 -
common stock issued
for cash at $0.25
per share 600,000 600 149,400 -
September 10, 1999 -
common stock
issued for cash at
$0.25 per share 240,000 240 59,760 -
September 13, 1999 -
common stock
issued for cash at
$0.25 per share 600,000 600 149,400 -
September 14, 1999 -
common stock
issued for cash at
$0.25 per share 320,000 320 79,680 -
September 21, 1999 -
common stock
issued for cash at
$0.25 per share 400,000 400 99,600 -
October 13, 1999 -
common stock issued
for cash at $0.25
per share 1,000,000 1,000 253,000 -
October 15, 1999 -
common stock issued
for consulting at
$0.25 per share 1,000,000 1,000 249,000 -
October 15, 1999 -
common stock issued
for consulting services
at $0.25 per share 22,150 22 5,515 -
November 11, 1999 -
common stock
issued for consulting
services at $0.25
per share 266,667 267 66,399 -
Net loss for
the year ended
December 31, 1999 - - - (2,665,400)
Balance, December
31, 1999 23,680,817 23,681 2,935,542 (2,753,713)
March 8, 2000 -
comm stock
issued for services
at $.50 500,000 500 249,500 -
March 31, 2000 -
common stock
issued for cash at
$1.00 per share 240,000 120 119,881 -
Net loss for the
three months
ended March 31, 2000 - - - (286,540)
Balance, March
31, 2000 24,420,817 $ 24,421 $ 3,304,802 $(3,290,253)
E-VEGAS.COM, INC.
Statements of Cash Flows
For the
Three Months Ended
March 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) from operations $ (536,540) $ (73,241)
Adjustments to reconcile
loss from operations to
net cash used by operating activities:
Depreciation and amortization 11,174 -
Loss on equity investment 141,877 26,354
Common stock issued for services 250,000 -
Changes in operating assets and liabilities:
(Increase) decrease in deposits - (26)
Increase (decrease) in accounts payable
and accrued expenses (3,415) (4,940)
Increase (decrease) in gaming loss reserve (14,688) -
Net Cash (Used) by Operating Activities (151,593) (52,091)
CASH FLOWS FROM INVESTING ACTIVITIES
Investments purchased - -
Purchase of equipment (21,090) (193,546)
Net Cash (Used) by Investing Activities (21,090) (193,546)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on notes payable (2,436) -
Proceeds from notes payable 158,425 118,152
Proceeds from common stock 120,000 300,000
Net Cash Provided by Financing Activities 275,989 418,152
INCREASE IN CASH AND CASH EQUIVALENTS 103,307 172,515
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,378 293
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 104,685 $ 172,808
E-VEGAS.COM, INC.
Statements of Cash Flows (Continued)
For the
Three Months Ended
March 31,
2000 1999
CASH PAID FOR:
Interest $ - $ -
Income taxes $ - $ -
NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for investments,
software and licenses $ - $ -
Common stock issued for services $ 250,000 $ -
E-VEGAS.COM, INC.
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
On February 10, 1997, E-Vegas.Com, Inc. (formerly Clear Water
Mining, Inc.) (the Company) was incorporated under the laws of
Nevada to engage in the exploration and mining business.
On February 5, 1999, the Company's directors entered into a
purchase agreement with E-Casino Gaming Corporation to purchase
proprietary rights and software for Internet Casino and Sports
Book, a Costa Rican International license to operate the same,
and the company's trade style for 2,000,000 shares of authorized,
but unissued, common stock. The acquisition was ratified by
shareholders at a special meeting held March 5, 1999. At the
same shareholder meeting, the shareholders approved changing
the corporate name to E-Casino Gaming Corporation. Said amendment
was filed with the State of Nevada on March 11, 1999. On June 1,
1999, the Company's name was changed to E-Vegas.Com, Inc.
During March 1999, the Company sold its wholly-owned subsidiary,
True Vista Mining de Mexico, Inc., to True Vista Mining, Inc. for
$30,000, a 10% equity interest in True Vista Mining, Inc. and a 5%
production royalty on the mining claims sold once the properties
begin producing and selling. Should True Vista Mining, Inc. sell
or negotiate any of the properties, the Company will receive 5% of
the consideration. The Company was considered a development stage
company until August 1999 when it began sales.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
b. Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
c. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent 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.
E-VEGAS.COM, INC.
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Basic Loss Per Common Share
Basic loss per common share has been calculated based on the weighted
average number of shares of common stock outstanding during the period.
e. Income Taxes
No provision for federal income taxes has been made at March 31, 2000
due to accumulated operating losses.
The Company has accumulated approximately $2,900,000 of net operating
losses as of March 31, 2000 which may be used to reduce taxable income
and income taxes in future years through 2019. The use of these losses
to reduce future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the net operating loss
carryforwards.
In the event of certain changes in control of the Company, there will be
an annual limitation on the amount of net operating loss carryforwards
which can be used. The potential tax benefits of the net operating loss
carryforwards have been offset by a valuation allowance of the same amount.
f. Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets ranging from 3 to 5 years.
Expenditures for property additions and betterments are capitalized
at cost. Maintenance and repairs are charged to expense when incurred.
g. Revenue Recognition
The company operates in one industry which is internet gaming. The
Company recognizes revenues from its gaming activities upon completion
of the activity upon which the wager was placed. Winnings are recorded
as revenues. Losses are recorded as gaming payouts. Funds held for
customers but not yet wagered are carried as a liability known as gaming
loss reserve.
E-VEGAS.COM, INC.
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 3 - INVESTMENTS
March 31,
2000
At December 31, 1999, the Company held 150,000 shares
in Hussongs America, Inc. for a total cost of $30,000.
This investment has been recorded at cost. $ 30,000
On June 30, 1999, the Company acquired 2,193,750
shares of E-Betta Bunch.Com, Inc. ("Betta Bunch")
which was approximately 24% of the total outstanding
common stock of Betta Bunch, by issuing 1,000,000
shares of the Company's common stock valued at
$250,000 and cash invested of $46,042. The Company's
investment in Betta Bunch has been accounted for using
the equity method. Betta Bunch is an online gaming
company. The investment has been written down by a
loss of $296,042 as of December 31, 1999. -
In October 1999, the Company sold 100% of Global E-Com
(a formerly wholly-owned subsidiary) for 10,000,000 shares
of Presidents Telecom, which represents 47% of the issued
and outstanding shares of Presidents Telecom for an
investment recorded at predecessor cost of $569,587.
Accordingly, the Company is accounting for the investment
as an equity investment. Presidents Telecom experienced
a loss of $464,371 for the year ended December 31, 1999.
The Company's recognized portion of the loss was $360,131,
as of March 31, 2000 which reduced the investment to $209,456. 209,456
Total Investments $ 239,456
NOTE 4 - NOTES PAYABLE - RELATED PARTY
The Company has notes payable to shareholders in the amount of $196,974
at March 31, 2000. The amounts bear interest at 10%, are unsecured and
due on demand.
NOTE 5 - COMMON STOCK
a. On March 5, 1999, the Company issued 2,000,000 for proprietary
rights and software valued at $200,000. The rights and software were
written down to their estimated net realizable value of $-0- in 1999.
b. At a special meeting, a 504D offering was authorized to sell 1,500,000
shares of common stock at $0.10 per share. The offering was completed and
funded on March 5, 1999 for $150,000.
c. A 504D offering was authorized to sell 600,000 shares of common
stock at $0.25 per share. The offering was completed and funded for
$150,000 on April 3, 1999.
E-VEGAS.COM, INC.
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 5 - COMMON STOCK (Continued)
d. A 504D offering was authorized to sell 1,000,000 shares of common
stock at $0.70 per share. The offering was completed and funded for
$700,000 on May 3, 1999.
e. A 505D offering was authorized to sell 1,680,000 shares of common
stock at $0.25 per share. The offering was completed and funded for
$420,000 on June 30, 1999. 680,000 shares equaling $170,000 were sold
for cash. 1,000,000 shares were issued for an investment in Bettabunch,
Inc. valued at $250,000.
f. In August and September 1999 2,612,000 shares of common stock were
issued at $0.25 per share for cash, totaling $653,000.
g. In October 1999, 1,000,000 shares of common stock were issued for
$0.25 per share, for cash totaling $254,000.
h. In October and November 1,288,817 shares of common stock were
issued at $0.25 per share for consulting services.
i. In March 2000, 120,000 shares of common stock were issued for
$1.00 per share for cash totaling $120,000.
NOTE 6 - NOTE PAYABLE
On June 21, 1999, the Company purchased software and computer
equipment from an unrelated party. An initial payment of $43,957
is due in 2000 and payments of $4,738 are due quarterly over a
24-month period. The note bears an imputed interest rate of 10% 3
and is secured by equipment. Future maturities of the note payable
is as follows:
2000 $ 60,255
2001 69,731
$ 72,167
NOTE 7 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company has not established
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. Management believes that the Company
will soon be able to generate revenues sufficient to cover its operating
costs. In the interim, the Company intends to raise additional
capital through private placements of its common stock.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following information should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this
Form 10-QSB.
Overview
The Company was incorporated on February 10, 1997 as Clearwater
Mining, Inc. On May 5, 1999 the Company acquired the proprietary
rights to the software for internet casino and sport book gambling
for 2,000,000 shares of common stock and changed its corporate name
to E-Casino Gaming Corporation and formed a Costa Rican corporation
to develop its international gaming site.
The Company's current capital was provided by the sale of securities
in 1999.
On March 5, 1999, the shareholders ratified the acquisition of the
proprietary rights to the software for internet casino and sports book
gambling, and the corporate trade style of E-Casino Gaming in exchange
for 2,000,000 shares of authorized but unissued common stock.
An offering was complete on March 9, 1999 pursuant to Regulation D
Rule 504, selling 1,500,000 shares of common stock for $150,000.
An amendment to the Articles of Incorporation, to change the corporate
name to E-Casino Gaming Corporation, was filed with the State of Nevada
on March 11, 1999.
On March 29, 1999, the Company completed an additional offering of
600,000 shares of common stock for $150,000 at $0.25 per share pursuant
to Regulation D Rule 504.
In May of 1999 the Company completed the sale of 1,000,000 shares of
common stock for $700,000. The majority of the proceeds were used for
the purchase of equipment and marketing.
On June 21, 1999, the Company changed its corporate name to E-Vegas.COM,
Inc.
Results of Operations the First Three Months of 2000
The Company had revenues of $328,028 for the first quarter with operating
expenses of $ 159,064. There were no operating revenues as of March 31, 1999.
These amounts represent a 117% increase in operating expenses over first
quarter 1999 figures.
The Company has continued to offer sports book wagering services. However,
it is finalizing the beta testing, name branding, and marketing of its new
turn key casino software. For the first three months of 2000 the Company
recognized $328,028 in gaming revenue. The Company has total operating
expenses of $159,028 respectively primarily for general and administrative
expenses. The Company had total other expenses of $144,250 primarily
relating to a loss on investment and interest expense. Management
expects expenses to increase significantly once the Company begins
marketing its product.
Net Operating Loss
The Company has accumulated approximately 3,040,254 of net operating
loss carryforwards as of March 31, 2000, which may be offset against
taxable income and income taxes in future years. The use of these
losses to reduce future income taxes will depend on the generation
if sufficient taxable income prior to the expiration of the net operating
loss carryforwards. The carryforwards expire in the year 2015. In the
event of certain changes in control of the Company, there will be an annual
limitation on the operating loss carryforwards, which can be used.
Inflation
In the opinion of management, inflation has not had a material effect
on the operations of the Company.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to the
"safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. The Company wishes to advise readers that actual results
may differ substantially from such forward-looking statements. Forward-
looking statements involve risks and uncertainties that could cause actual
results to differ materially from those expressed on or implied by the
statements, including, but not limited to, the following: the ability of
the Company to successfully meet its cash and working capital needs, the
ability of the Company to successfully market its product, and other risks
detailed in the Company's periodic report filings with the Securities and
Exchange Commission.
Part II
Item 1. Legal Proceedings
On Christen Brule vs. E-Vegas.COM, Inc., case # 0995358, failure to
deliver a warrant. Counsel assures management that the case is without
merit.
Item 2. Changes in Securities
In March 2000, the Company sold 240,000 shares of restricted common
stock to four people at the cash price of $1.00 per share, for gross
proceeds of $120,000.00The proceeds were used of general and
administrative expenses of the Company.
On March 8, 2000 the Company issued 500,000 shares of restricted
common stock at $.50, for services.
This sale of securities was made pursuant to the exemption from
registration under the Securities Act of 1933, as amended (the "Act")
provided by section 4(2) and 4(6) of the Act. Certificates representing
these shares must bear appropriate restrictive legends preventing their
transfer except in accordance with the Act and the regulations promulgated
thereunder.
Item 3. Defaults Upon Senior Securities
This item is not applicable to the Company.
Item 4. Submission of Matters to be a Vote of Security Holders
This item is not applicable to the Company.
Item 5. Other Information
This item is not applicable to the Company.
Item 6. Exhibits and Reports on 8-K
a. Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
No report on Form 8-K was filed by the Company during the three months
ended March 31, 1999.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
E-VEGAS.COM, INC.
Dated: May 10, 2000
By:_____________________
Edward Gallagher
President, Director
By:_____________________
Antal Markus
Secretary, Treasurer and Director
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