FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal quarter ended November 30, 1997 or
-----------------
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission file number 0-8773
CRESTED CORP.
----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-0608126
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
877 North 8th West, Riverton, WY 82501
-------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone Number, including area code: (307) 856-9272
--------------
NONE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at January 14, 1998
----- -------------------------------
Common stock, $.001 par value 10,302,694 Shares
<PAGE>
CRESTED CORP.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
Condensed Consolidated Balance Sheets
November 30, 1997 and May 31, 1997.......................... 3-4
Condensed Consolidated Statements of Operations
Three and Six Months Ended November 30, 1997 and 1996....... 5-6
Condensed Consolidated Statements of Cash Flows
Six Months Ended November 30, 1997 and 1996................. 7-8
Notes to Condensed Consolidated Financial Statements............ 9
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................... 10-13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings............................................... 13
ITEM 6. Exhibits and Reports on Form 8-K................................ 14
Signatures...................................................... 15
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Balance Sheets
ASSETS
November 30, May 31,
1997 1997
------------ -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,493,700 $ 37,100
Accounts receivable
Trade 135,200 63,900
Affiliates 456,500 596,200
Current portion of long-term
notes receivable
Related parties 317,900 304,000
Other 79,000 --
Inventory and other 88,600 48,300
----------- -----------
TOTAL CURRENT ASSETS 2,570,900 1,049,500
LONG-TERM NOTES RECEIVABLE 403,600 474,600
INVESTMENTS IN AFFILIATES 1,889,400 1,796,800
INVESTMENT IN CONTINGENT
STOCK PURCHASE WARRANT 651,000 651,000
PROPERTIES AND EQUIPMENT 5,607,200 5,181,300
Less accumulated depreciation,
depletion and amortization (3,103,800) (3,017,700)
----------- -----------
2,503,400 2,163,600
OTHER ASSETS 150,200 150,200
----------- -----------
$ 8,168,500 $ 6,285,700
=========== ===========
3
<PAGE>
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS' DEFICIT
November 30, May 31,
1997 1997
------------ ----------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 168,700 556,600
Deferred income (Note 4) 2,000,000 --
Current portion of long-term debt
(Note 5)
Affiliates 6,256,200 6,023,400
Others 66,700 12,400
----------- -----------
TOTAL CURRENT LIABILITIES 8,491,600 6,592,400
LONG-TERM DEBT (Note 5) 10,800 15,800
ACCRUED RECLAMATION COSTS (Note 6) 725,900 725,900
COMMITMENTS AND CONTINGENCIES
FORFEITABLE COMMON STOCK, $.001 par value
65,000 shares issued, forfeitable
until earned 43,900 43,900
SHAREHOLDERS' DEFICIT:
Preferred stock, $.001 par value;
authorized, 100,000 shares;
none issued or outstanding -- --
Common stock, $.001 par value;
authorized 20,000,000 shares;
issued, 10,237,694 10,200 10,200
Additional paid-in capital 6,375,400 6,375,400
Accumulated deficit (7,489,300) (7,477,900)
----------- -----------
TOTAL SHAREHOLDERS' DEFICIT (1,103,700) (1,092,300)
----------- -----------
$ 8,168,500 $ 6,285,700
=========== ===========
4
<PAGE>
<TABLE>
<CAPTION>
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
November 30, November 30,
-------------------------------- --------------------------------
1997 1996 1997 1996
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
<S> <C> <C> <C> <C>
Mineral sales $ -- $ -- $ 429,300 $ --
Oil and gas sales 14,000 11,600 38,300 31,100
Mineral property transactions 26,400 27,500 55,200 48,400
Interest 23,600 8,500 51,900 14,900
Rental 171,500 61,300 392,200 129,100
Gain on sale of assets 800 -- 800 --
Other 184,300 92,900 339,700 163,600
----------- ----------- ----------- -----------
420,600 201,800 1,307,400 387,100
COSTS AND EXPENSES:
Cost of sales 44,100 22,700 71,700 49,200
Mineral operations 174,200 77,100 361,600 158,500
Interest 6,200 6,200 10,600 13,700
General and
administrative 356,700 258,200 686,800 437,200
Depreciation and
amortization 52,600 49,000 96,700 93,100
----------- ----------- ----------- -----------
633,800 413,200 1,227,400 751,700
----------- ----------- ----------- -----------
LOSS BEFORE EQUITY
LOSS AND TAX PROVISION (213,200) (211,400) 80,000 (364,600)
EQUITY IN LOSS OF
AFFILIATES (44,100) (68,100) (91,400) (126,900)
----------- ----------- ----------- -----------
LOSS BEFORE PROVISION
FOR INCOME TAXES (257,300) (279,500) (11,400) (491,500)
(continued)
5
<PAGE>
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Statements of Operations
(continued)
Three Months Ended Six Months Ended
November 30, November 30,
------------------------------------- --------------------------------
1997 1996 1997 1996
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
PROVISION FOR
INCOME TAXES -- -- -- --
---------------- ---------------- ------------ --------------
NET LOSS $ (257,300) $ (279,500) $ (11,400) $ (491,500)
================ ================ ============ ==============
NET LOSS PER SHARE $ (.02) $ (.03) $ * $ (.05)
================ ================ ============ ==============
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 10,302,694 10,156,094 10,302,694 10,156,094
================ ================ ============ ==============
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Statements of Cash Flows
Six Months Ended
November 30,
-----------------------------------
1997 1996
---- ----
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (11,400) $ (491,500)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 96,700 93,100
Equity in loss on affiliates 91,400 126,900
Gain on sale of assets (800) --
Deferred income 2,000,000 2,103,800
Net changes in components
of working capital (359,800) (323,300)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,816,100 1,509,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (35,000) --
Proceeds from collection
of notes receivable 13,100 (45,800)
Investments in affiliates (184,000) (249,900)
Purchase of property and equipment (437,700) (17,700)
Proceeds from sale of assets 2,000 --
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (641,600) (313,400)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in debt 313,300 112,600
Principle payments on long-term debt (31,200) (1,342,700)
----------- -----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 282,100 (1,230,100)
----------- -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 1,456,600 (34,500)
(continued)
7
</TABLE>
<PAGE>
CRESTED CORP. AND AFFILIATE
Condensed Consolidated Statements of Cash Flows
(continued)
Six Months Ended
November 30,
----------------------------
1997 1996
---- ----
(Unaudited) (Unaudited)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 37,100 52,600
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $1,493,700 $ 18,100
========== ==========
SUPPLEMENTAL DISCLOSURES:
Income tax paid $ -- $ --
========== ==========
Interest paid $ 10,600 $ 13,700
========== ==========
8
<PAGE>
CRESTED CORP.
Notes to Condensed Consolidated Financial Statements
1) The Condensed Consolidated Balance Sheet as of November 30, 1997, the
Condensed Consolidated Statements of Operations for the three and six months
ended November 30, 1997 and 1996, and the Condensed Consolidated Statements of
Cash Flows for the six months ended November 30, 1997 and 1996, have been
prepared by the Company without audit. The Condensed Consolidated Balance Sheet
of May 31, 1997, has been taken from the audited financial statements included
in the Company's Annual Report on Form 10-K filed for the year then ended. In
the opinion of the Company, the accompanying financial statements contain all
adjustments (consisting of only normal recurring accruals) necessary to fairly
present the financial position of the Company and its affiliate as of November
30, 1997 and May 31, 1997, the results of operations for the six months ended
November 30, 1997 and 1996, and the cash flows for the six months then ended.
2) Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these financial
statements be read in conjunction with the Company's May 31, 1997 Form 10-K. The
results of operations for the periods ended November 30, 1997 and 1996 are not
necessarily indicative of the operating results for the full year.
3) The condensed consolidated financial statements of the Company include
its proportionate share of the accounts of USECB Joint Venture (USECB) which is
owned 50% by Company and 50% by Company's parent, U.S. Energy Corp. (USE). All
material intercompany profits and balances have been eliminated.
4) Deferred income consists of the Company's half of the $4,000,000 Signing
Bonus received when the Company and its parent, USE entered into an Acquisition
Agreement with Kennecott Uranium Company to develop properties. The amount was
forfeitable until certain actions are taken by the Company and USE (See GMMV
discussion in Item 2).
5) Debt consists primarily of a note payable to the Company's parent USE of
$6,256,200. The remaining debt is for various equipment and insurance loans
through financial institutions.
6) Accrued reclamation obligation of $725,900 is the Company's share of the
reclamation liability at the Sheep Mountain/Green Mountain Mining Districts.
This reclamation work may be performed over several years.
7) Certain reclassifications have been made in the May 31, 1997 financial
statements to conform to the classifications used in November 30, 1997.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
------------------------------------------------------------------------
Liquidity and Capital Resources
On June 23, 1997, the Company and its parent, U.S. Energy Corp. ("USE"), entered
into an Acquisition Agreement with Kennecott Uranium Company ("Kennecott")
whereby the Company and USE received a signing bonus from Kennecott of
$4,000,000 and a loan to develop the Green Mountain Mining Venture (GMMV)
properties of $16,000,000. The $4,000,000, one half of which is attributable to
the Company, is shown as deferred income on the November 30, 1997 balance sheet
as it was forfeitable until certain conditions were met. During the third
quarter of fiscal 1998 the forfeitable terms were satisfied which will allow the
signing bonus to be recognized as income for the quarter ending February 28,
1998.
The Company also received cash from the sale of uranium under the SMP contracts
of $429,300; its advance royalty payment from Cyprus AMAX of $55,200; $392,200
from the rental of equipment and real estate properties, and $239,300 in the
form of management fees. The receipt of these funds increased the Company's
liquidity position significantly.
The Company utilized $641,600 in its investing activities during the six months
ended November 30, 1997. This was primarily as a result of the Company and USE
purchasing $437,700 worth of equipment, and the funding of standby costs of
Sheep Mountain Partners ("SMP") and Plateau Resources Limited ("Plateau"). Due
to the disputes existing between the SMP partners, the Company and USE have not
been reimbursed for the care, maintenance and standby costs expended on the SMP
mineral properties in Wyoming since the spring of 1991.
The Company netted $282,100 from its financing activities as a result of
increased long term-debt primarily to USE because of USE paying certain expenses
on the Company's behalf. Cash provided by operations of $1,816,100 plus the
$282,100 provided by financing activities, less $641,600 used in investing
activities resulted in a net increase in cash and cash equivalents of
$1,456,600. This increase places the Company in the strong cash position of
$1,493,700 at November 30, 1997 as compared to $18,100 at the same date of the
prior year and $37,100 as of May 31, 1997.
The primary requirements for the Company's working capital continue to be
funding of the on-going administrative expenses; the mine and mill holding and
start-up costs of Plateau; the holding costs of the SMP mines, on going
litigation expenses associated with the SMP dispute; and certain uranium
delivery costs to SMP contracts. Nukem is currently making most of the SMP
deliveries. No assurances can be given that this method of delivery will
continue. The capital requirements to fill the Company's and USE's portion of
the remaining commitments in fiscal 1998 will depend on the spot market price of
uranium and may also be dependent on the outcome of the Arbitration/Litigation
Award involving Nukem and CRIC, which they have appealed to the 10th Circuit
Court of Appeals.
The primary source of the Company's capital resources for the remainder of
fiscal 1998 will be cash on hand; financing available through the GMMV (see
discussion below); eventual settlement of the Nukem/CRIC Arbitration/Litigation;
uranium deliveries pursuant to the SMP contracts; the borrowing from financial
10
<PAGE>
institutions (primarily the line of credit), and the sale of equity or interests
in investment properties. Fees from oil production; rentals of various real
estate holdings and equipment, and the sale of aviation fuel will also provide
cash.
The Company, USE and Sutter Gold Mining Company ("SGMC") are currently seeking
additional financing for the construction of the gold processing mill and mine
development of SGMC. See discussion of SGMC below. An additional $8 million in
financing is being sought, however, there is no assurance the funds will be
raised.
The expenditures for the SMP care and maintenance costs may require additional
funding, depending on the outcome of the SMP Arbitration/Litigation. See Part
II, Item 1 "Legal Proceedings" below.
GMMV
- ----
On June 23, 1997, the Company and USE signed an Acquisition Agreement with
Kennecott Uranium Company ("Kennecott") for the right to acquire Kennecott's
interest in the GMMV for $15,000,000 and other consideration. This information
was previously reported in the Company's Form 10-Q (Item 2) for the fiscal
quarter ended August 31, 1997. Kennecott paid USE and USECC $4,000,000 on
signing, and committed to provide the GMMV a loan of up to $16,000,000 for
payment of costs incurred by USECC in developing the proposed underground
Jackpot uranium mine and permitting the Sweetwater Mill. As a result of these
agreements, it is believed that no internal funding will be required by the
Company and USE for the GMMV at either the Sweetwater Mill or the Jackpot mine.
Pursuant to the Acquisition Agreement and the Mineral Lease and Mill Contract,
USECC is developing the proposed Jackpot Mine and working with Kennecott in
preparing the Sweetwater Mill for renewed operations. Such work is being funded
from the $16,000,000 loan being provided to the GMMV by Kennecott. Under the
Fourth Amendment of the GMMV Agreement, Kennecott will be entitled to a credit
against Kennecott's original $50,000,000 commitment to fund the GMMV, in the
amount of two dollars of credit for each one dollar of such funds out of the
$16,000,000 provided by Kennecott to the GMMV, plus the $4,000,000 paid to USE
and USECC on signing of the Acquisition Agreement.
Closing of the Acquisition Agreement is subject to USE and USECC satisfying
several conditions, on or before the extended closing date of October 30, 1998.
If the Acquisition Agreement were not closed by December 1, 1997, then USE and
USECC (or an entity formed by them to acquire the GMMV interest owned by
Kennecott) were to provide to Kennecott a commitment letter from a recognized
national investment banking firm to complete an underwritten public offering of
the securities of USE (or an entity formed or introduced to acquire Kennecott's
GMMV interest (the "Acquiring Entity"), in amount sufficient to close the
Acquisition Agreement transactions. Such amount is estimated by the company and
USE to be approximately $40,000,000. The Acquisition Agreement was not closed by
December 1, 1997 but USE and USECC provided Kennecott a commitment letter from a
recognized national investment banking firm to meet the timely requirements of
the Acquisition Agreement. Thus, the $4,000,000 signing bonus paid by Kennecott
became nonrefundable.
11
<PAGE>
Sutter Gold Mining Company
- --------------------------
A preliminary prospectus to qualify a previous special warrant offering
prospectus of Sutter Gold Mining, has been filed with the Ontario Securities
Commission and the Toronto Stock Exchange. An additional $8 million must be
raised to fund the development costs to place the SGMC properties in production.
It is not anticipated that any of the Company's funds will be required to fund
these operations.
Sheep Mountain Partners
- -----------------------
Nukem and CRIC filed their opening brief in their appeal before the 10th Circuit
Court of Appeals on December 12, 1997. The Company and USE filed their answer
brief on January 12, 1998. Nukem and CRIC now have fourteen days to file a reply
brief after which time the 10th Circuit Court may set oral arguments and then
decide the case. No assurance can be given as to the ultimate outcome, however
management of the Company and USE are optimistic the ruling will be in their
favor.
Until such time as these issues are resolved, the Company and USE may be
required to fund the standby costs of the Sheep Mountain mines. The Company and
USE have filed a lien on the SMP properties as a protection for the payment of
past and future standby costs for which they have not been reimbursed by
Nukem/CRIC and filed suit in Wyoming to foreclose the lien. The case is in the
discovery stage.
Results of Operations
Six months ended November 30, 1997 Compared to Six Months Ended November 30,
1996
Revenues for the six month period ended November 30, 1997, increased by $920,300
over the same period of the prior year. The increase in revenues primarily is as
a result of a delivery of uranium concentrates pursuant to one of the SMP
delivery contracts wherein a net profit of $429,300 was recognized by the
Company and an increase of $263,100 in revenues generated from the rental of
equipment and certain real estate. There were no Uranium sales during the six
month period ended November 30, 1996. The increase in rental revenues is as a
result of increased equipment rentals to the GMMV under the June 23, 1997
Agreement discussed above. Finally, other revenues increased by $176,100 during
the six months ended November 30, 1997, over the six month period ended November
30, 1996. This increase was primarily as a result of management fees increasing
by $107,600 because of increased activities provided to the various subsidiary
companies and partnerships by the Company.
Costs and expenses increased by $475,700 over the same six month period for the
prior year. This is as a result of Mineral Operations and General and
Administrative expenses increasing by $203,100 and $249,600 respectively. These
increases were due primarily to requiring additional staff to administer the
development of the GMMV and Plateau mining properties.
Operations for the six months ended November 30, 1997, resulted in a loss of
$11,400, less than $0.01 per share as compared to a loss of $491,500 or $0.05
per share for the same period last year. The increase in earnings is primarily
as a result of increased revenues from the sale of uranium and the rental of
equipment.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
------------------
(a) Sheep Mountain Partners Arbitration/Litigation. The information called
for in this Item 1 has been previously reported in the Company's Form 10-K (Item
3) for the fiscal year ended May 31, 1997 and Item 1, Part II of the Company's
Form 10-Q for the quarter ended August 31, 1997. This report discloses the
status of the consensual arbitration/litigation in the U.S. District Court of
Colorado and 10th Circuit Court of Appeals involving the Company and USE d/b/a
USECC and Nukem, Inc. and its wholly-owned subsidiary Cycle Resource Investment
Corp. (CRIC) over disputes involving the Sheep Mountain Partners (SMP)
partnership concerning the marketing and sale of uranium and mining operations
in Wyoming. As was reported earlier, a Second Amended Judgment was entered on
June 30, 1997, by Judge Lewis T. Babcock of the U.S. District Court of Colorado
wherein the Court again confirmed the Arbitration Award ordering Nukem to pay
USECC a net of approximately $8,600,000 as monetary damages and imposing a
constructive trust in favor of SMP on Nukem's rights to purchase CIS uranium,
the uranium acquired pursuant to those rights and the profits therefrom (the
"CIS contracts"). Nukem/CRIC filed a motion for clarification and/or limited
remand of the Second Amended Judgment. On August 13, 1997, the U.S. District
Court denied the motion. Nukem and CRIC then filed an amended notice of appeal
of the District Court's Judgment and Second Amended Judgment with the 10th
Circuit Court of Appeals. USECC filed a motion to increase the supersedeas bond
Nukem posted for $8,613,600 to cover the value of the CIS contracts, but the
10th Circuit Court denied the motion. Nukem/CRIC filed their Appellants' opening
brief with the 10th Circuit Court of Appeals on December 12, 1997. USECC filed
its Appellees' brief on January 12, 1998. Nukem/CRIC may file a reply brief on
or before January 26, 1998. The Court may hear oral arguments on the appeal and
a decision from the Court is expected in late spring or early summer 1998.
(b). BGBI Litigation. The information called for in this Item 1 has been
previously reported in the Company's Form 10-K (Item 3) for the fiscal year
ended May 31, 1997. This report discloses the status of the lawsuit filed by
Bond Gold Bullfrog Inc. ("BGBI" or "Bond Gold") in Nye County, NV against
Company, USE and Parador Mining Company, Inc. regarding Parador's mining lease
to Bond Gold of two patented mining claims. The District Court had bifurcated
the trial of the issues and heard the issue of whether Parador's mining claims
had extralateral rights, in December 1995. On December 18, 1997, at a hearing
before the District Court on motions for summary judgment by all parties, the
Court granted various motions for summary judgment of the parties. However, the
Court denied plaintiff's motions for summary judgment on the breach of Parador's
lease and the issue of specific performance by plaintiff and denied defendants'
motion for summary judgment on plaintiff's claim for breach of contract. Thus,
the issues of breach of contract by both BGBI and the defendants Company, USE
and Parador and these defendants' claim against BGBI for specific performance,
will be tried before the Court commencing on January 26, 1998.
13
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits. None.
(b) Reports on Form 8-K. The Company filed no Reports on Form 8-K during
the quarter ended November 30, 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CRESTED CORP.
(Company)
Date: January 14, 1998 By: /s/ Max T. Evans
------------------------------
MAX T. EVANS,
President
Date: January 14, 1998 By: /s/ Robert Scott Lorimer
------------------------------
ROBERT SCOTT LORIMER,
Principal Financial Officer
and Chief Accounting Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> NOV-30-1997
<CASH> 1,493,700
<SECURITIES> 0
<RECEIVABLES> 988,600
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,570,900
<PP&E> 5,607,200
<DEPRECIATION> (3,103,800)
<TOTAL-ASSETS> 8,168,500
<CURRENT-LIABILITIES> 8,491,600
<BONDS> 0
0
0
<COMMON> 10,200
<OTHER-SE> 1,113,900
<TOTAL-LIABILITY-AND-EQUITY> 8,168,500
<SALES> 859,800
<TOTAL-REVENUES> 1,307,400
<CGS> 433,300
<TOTAL-COSTS> 433,300
<OTHER-EXPENSES> 885,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,600
<INCOME-PRETAX> (11,400)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,400)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,400)
<EPS-PRIMARY> (0.001)
<EPS-DILUTED> 0
</TABLE>
