FORM 10-QSB
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from to
Commission file number 0-9137
U.S. GOLD CORPORATION
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0796160
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2201 Kipling Street, Suite 100
Lakewood, Colorado 80215-1545
(Address of principal executive offices)
(303) 238-1438
(Issuers telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
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 issuers classes of common
equity, as of the latest practicable date:
Class Outstanding as of August 11, 1999
Common Stock, $0.10 par value 13,927,469
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS June 30, 1999
Current assets:
Cash and cash equivalents $831
Project payments receivable 540,000
Total current assets 540,831
Project payments receivable, long term 810,000
Investment in Tonkin Springs LLC 2,262,578
Marketable securities available for sale,
Globex common stock at market 69,450
Other assets, net 78,286
$3,761,145
LIABILITIES, DEFERRED CREDIT AND
SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable and accrued liabilities $47,540
Installment purchase contracts 10,230
Related party payables 135,615
193,385
Installment purchase contracts, long term 38,430
Deferred credit, project payments 1,350,000
Reserve for reclamation 640,000
Total liabilities and deferred credit 2,221,815
Shareholders equity:
Common stock, $.10 par value, 18,000,000 shares
authorized; 13,927,469 shares issued and
outstanding 1,392,747
Additional paid-in capital 31,969,444
Accumulated deficit (31,849,551)
Unrealized gain on securities
available for sale 26,690
Total shareholders equity 1,539,330
$3,761,145
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended June 30 1999 and 1998
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues:
Project payments $135,000 $- $370,000 $-
Interest income 25 2,704 51 8,417
Gain (loss) on
disposition of assets 486 - (6,606) -
Total revenues 135,511 2,704 363,445 8,417
Other costs and expenses:
General and administrative 153,183 273,726 369,116 514,777
Depreciation and amortization 4,211 3,523 8,448 6,593
Total expense 157,394 277,249 377,564 521,370
Loss before income taxes (21,883) (274,545) (14,119) (512,953)
Provision for income taxes - - - -
Net loss $(21,883) $(274,545) $(14,119) $(512,953)
Basic and diluted per share data:
Basic $(0.00) $(0.02) $(0.00) $(0.04)
Diluted $(0.00) $(0.02) $(0.00) $(0.04)
Weighted average
shares outstanding 13,927,469 13,927,469 13,927,469 13,927,469
U.S. GOLD CORPORATION
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six Months Ended June 30, 1999 and 1998
(unaudited)
June 30, 1999 June 30, 1998
Net loss $(14,119) $(512,953)
Comprehensive item- unrealized
gain (loss) on securities
available for sale 26,690 (1,159,912)
Comprehensive income (loss) $12,571 $(1,672,865)
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1999 and 1998
(unaudited)
June 30, 1999 June 30, 1998
Cash flows from operating activities:
Project Payments $370,000 $-
Interest received 51 8,417
Cash paid to suppliers and employees (387,298) (491,657)
Cash used in operating activities (17,247) (483,240)
Cash flows from investing activities:
Sale of marketable securities and assets 21,720 -
Capital expenditures (1,193) (4,833)
Cash provided by (used in)
investing activities 20,527 (4,833)
Cash flows from financing activities:
Payments on installment purchase contracts (4,403) -
Cash used in financing activities (4,403) -
Decrease in cash and cash equivalents (1,123) (488,073)
Cash and cash equivalents,
beginning of period 1,954 615,999
Cash and cash equivalents, end of period $831 $127,926
Reconciliation of net loss to cash used in operating activities:
Net loss $(14,119) $(512,953)
Items not requiring (providing) cash:
Loss on sale of assets 7,778 -
Depreciation and amortization 8,448 6,593
Increase (decrease) in current liabilities
related to operations (11,390) 43,303
Decrease (increase) in other assets,
ong term (7,964) (20,183)
Cash provided used in operating activities $(17,247) $(483,240)
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, as well as the accounts of the wholly-owned
Tonkin Springs Venture Limited Partnership (TSVLP). Significant intercompany
accounts and transactions have been eliminated.
Basic per share data includes no dilution and is computed by dividing loss
available to common shareholders by the weighted-average number of shares
outstanding during the period (13,927,469 for 1999 and for 1998). Diluted per
share data reflect the potential dilution of securities that could share in the
earnings of the Company, similar to fully diluted earnings per share. For the
three and six months ended June 30, 1999 and 1998, options are not considered
in the computation of diluted per share data since inclusion of options would
be antidilutive.
The preparation of the Companys consolidated financial statements in conformity
with generally accepted accounting principles requires the Companys management
to make estimates and assumptions that affect the amounts of assets and
liabilities, the 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.
2. Tonkin Springs Project
From December 31, 1993 until February 26, 1999, TSVLP, a partnership owned by
subsidiaries of the Company, held a 40 percent undivided interest in the Tonkin
Springs Properties (the Properties) subject to a mining joint venture, the
Tonkin Springs Project Joint Venture as amended ( the 1993 Agreement), with Gold
Capital Corporation (Gold Capital) being the holder of 60 percent undivided
interest and project manager. In August 1997, Gold Capital became a wholly-
owned subsidiary of Globex Mining Enterprises, Inc. (Globex), a Canadian
corporation with shares traded on the Toronto stock exchange (symbol: GMX)
pursuant to the merger of Gold Capital with a subsidiary of Globex (the Gold
Capital Merger). With the Gold Capital Merger the Company and TSVLP received
an aggregate of 631,905 shares of Globex common stock in exchange for shares of
Gold Capital. During the six months ended June 30 1999, the Company sold
200,000 shares of Globex for aggregate $20,970 recognizing a gain on the sale of
$1,172.
Effective February 26, 1999 (the Effective Date) TSVLP and Gold Capital
terminated the 1993 Agreement and each retained their respective 40 percent and
60 percent undivided interests in the Properties. Gold Capital then immediately
sold its 60 percent undivided interest in the Properties to Tonkin Springs
Holdings Inc., a Colorado corporation (TSHI) which is owned by subsidiaries of
Sudbury Contact Mines Limited, an Ontario, Canada corporation (Sudbury)
(SUD:TSE), which is itself a subsidiary of Agnico-Eagle Mines Limited, an
Ontario, Canada corporation (Agnico-Eagle) (AME:NYSE). TSHI then immediately
contributed its 60 percent undivided interest in the Properties into a new
limited liability company, Tonkin Springs LLC (TSLLC) in exchange for 60 percent
of the equity membership interest of TSLLC, and TSVLP contributed its 40 percent
undivided interest in the Properties into TSLLC in exchange for 40 percent of
the equity membership interest of TSLLC. The deemed amount of the Initial
Contribution of TSVLP to TSLLC is $2 million and for TSHI the Initial
Contribution to TSLLC is $3 million. The objective of TSLLC is the exploration,
evaluation and, if justified, the development and mining of mineral resources
in the Properties.
Under the Members Agreement and the Operating Agreement of the TSLLC, TSHI is
required to fund all costs related to the Properties, including all holding,
administrative, operational and exploration costs, until TSHI has first expended
$4 million on Exploration (exploration costs only) of the Properties (the Cut-
Off Date). All expenditures funded by TSHI prior to the Cut-Off Date, including
Exploration, holding, administrative or other operational costs of the
Properties, shall be added to TSHIs Recoupable Amount which has as its opening
balance the sum of $5,625,000, which represented approximately one-half of the
recoupment account balance of Gold Capital under the 1993 Agreement as of the
Effective Date. TSHI has reported that through June 30, 1999 the balance of
Exploration expenditures on the Properties is approximately $48,898 and that the
balance of the Recoupable Amount as of that date is approximatley $6,311,451.
If TSHI should withdraw from the TSLLC prior to Cut-Off, TSHI shall have no
further right, title or interest in the Properties of TSLLC and its ownership
interest shall be deemed transferred to TSVLP. In addition, TSHI shall remain
obligated to TSVLP: (i) to fund the remaining balance of the adopted Program and
Budget in effect upon termination, (ii) to complete its Minimum Work Commitment
for Exploration of the Properties in the amount of $2 million, or pay to TSVLP
the deficiency, (iii) to pay any unpaid Monthly Minimum Payments to TSVLP (as
described further below) that are due and payable, and (iv) to fund and satisfy
all unfunded liabilities to third parties arising out of operations conducted
subsequent to the Effective Date but prior to the date of TSHIs withdrawal or
deemed withdrawal. TSVLP and TSHI (the Members) have designated Tonkin Springs
Management Co., a Colorado corporation (TSMC, and an affiliate of TSHI) as the
initial Manager of the Properties with overall management responsibilities for
operations.
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March 1, 1999
TSHI began making additional payments to TSVLP in the amount of $45,000 per
month through December 1, 2001 (collectively Minimum Payments to TSVLP). During
the six monthsended June 30, 1999, the Company received $370,000 in Minimum
Payments to TSVLP which are reflected in revenue in the Statements of
Operations. One half of Minimum Payments to TSVLP are added to TSHIs Recoupable
Amount as discussed further below (and included in the June 30, 1999 balance as
reported above). As of June 30, 1999, there remains recorded a $1,350,000
receivable due from the TSLLC reflecting remaining Minimum Payments to TSVLP, of
which $540,000 is classified as a current asset, offset by a $1,350,000 deferred
credit, with the effect that the entire receivable is offset by a deferred
credit.
The Operating Agreement of the TSLLC defines Commencement of Commercial
Production (CCP). After CCP 60 percent of positive cash flow from the
operations of the Properties (Cash Flow), if any, shall be distributed to TSHI
until TSHI has recovered its Recoupment Amount, and the remaining 40 percent of
Cash Flow shall be distributed to the Members based upon their respective
ownership interest on a calendar quarter basis. After TSHI has recovered the
Recoupment Amount, 100 percent of Cash Flow shall be distributed to the
Members in proportion to the Members ownership interest. Therefore, initially
during the period in which TSHI is thus receiving preferential payments, TSVLP
shall receive 16 percent of Cash Flow, if any, from operations. Cash Flow
otherwise due TSVLP shall first be applied to reduce any Elected Loans
outstanding from TSHI, as discussed further below.
On the last day in the calendar month in which CCP is achieved, TSHI shall pay
TSVLP an additional amount to be calculated by multiplying $15,000 times the
number of months from the Effective Date through the month in which CCP is
achieved (the Lump-Sum Payment).
After the Cut-Off Date, TSHI is required to exercise reasonable efforts to
attempt to obtain third party project financing for any development of the
Properties requiring funding of more than $20 million. After the Cut-Off Date,
TSVLP is required to fund its 40 percent share of all costs of the Properties or
be subject to dilution under a formula. Either party may elect to contribute
a lesser amount or none towards its share of an adopted program and budget.
However, as long as TSHI owns at least 50 percent interest in TSLLC, TSHI
is obligated to loan TSVLP its share of funding of an adopted program and budget
after the Cut-Off Date under one-year term loans (the Elected Loan) with an
interest rate of LIBOR plus 2 percent. If, however, TSVLP does not repay an
Elected Loan when due, TSHI shall have no further obligation to make additional
Elected Loans to TSVLP and the amounts of defaulted Elected Loans and accrued
interest thereon shall be incorporated into the computation of dilution of
TSVLPs working interest under a formula. If the ownership interest of any
Member falls to 10 percent or less as a result of the dilution formula, then
such Member shall be deemed to have withdrawn from the TSLLC and to have
automatically relinquished and transferred its interest to the other Member and
upon such relinquishment the withdrawing Member shall be granted an overriding
2 percent net smelter royalty (the NSR) on products subsequently extracted,
removed and sold from the Properties.
The Company recognized neither a gain nor a loss on the termination of the 1993
Agreement or with the contribution of its 40 percent undivided interest in the
Properties to the TSLLC.
3. Condensed Financial Information of Tonkin Springs LLC
As noted in Footnote 2 above, effective February 26, 1999, the Companys interest
in the Tonkin Springs Properties were contributed into the TSLLC with TSMC as
manager. The following is the preliminary condensed balance sheet of TSLLC as
of June 30, 1999, and a preliminary condensed statement of operations for the
six months then ended, both as reported by TSLLC:
BALANCE SHEET June 30, 1999
Assets:
Property, plant equipment &
development costs $5,138,435
Restricted time deposit for reclamation bond 1,300,000
Other assets 47,224
$6,485,659
Liabilities, Reserves and Shareholders Equity:
Current liabilities $16,659
Reserve for reclamation 1,469,000
1,485,659
Shareholders Equity-
TSHI 3,000,000
TSVLP 2,000,000
5,000,000
$6,485,659
Six Months Ended
STATEMENT OF OPERATIONS June 30, 1999
Property holding and maintenance costs $452,553
Exploration expenses 48,898
Net loss $501,451
4. Loan Settlement Agreement with FABC
On February 21, 1992, the Company, among other related things, entered into a
Loan Settlement Agreement with its senior secured lender, The French American
Banking Corporation (FABC). The Company discharged its debt to FABC and
terminated all prior security interests related thereto. As part of the
consideration to FABC under the Loan Settlement Agreement, the Company entered
into an agreement between Tonkin Springs Gold Mining Company, a wholly-owned
subsidiary of the Company (TSGMC) and FABC entitled Agreement To Pay
Distributions, which requires TSGMC to pay a limited portion of certain
distributions from TSVLP through TSGMC to FABC. The Company has complete
control of such distributions, if any, from TSVLP to TSGMC. Under the terms of
the Agreement To Pay Distributions, TSGMC is required to pay to FABC (i) the
first $30,000 in cash or value of asset distributions, as defined in such
agreement, received from TSVLP, plus (ii) an amount equal to 50% of such
retained distributions in cash or value of asset distributions after TSGMC has
first received and retained $500,000 of such retained distributions. This
obligation to FABC shall terminate after FABC has been paid a total of
$2,030,000 thereunder or upon disposition by TSGMC of its interest in TSVLP.
5. Related Party Transactions
Effective November 15, 1997 through February, 1999, the Company and Moyes &
Newby & Co, (Moyes Newby) entered into a month-to-month arrangement whereby
Moyes Newby provided the Company general corporate and financial advisory
services for a retainer of $5,000/month plus reimbursement of reasonable out of
pocket expenses. The ramining balance due under this commitment was fully paid
as of June 30, 1999. Douglas J. Newby, a director of the Company, is managing
partner of Moyes Newby.
Commencing July 1, 1998, the three executive officers of the Company voluntarily
deferred a portion of their individual salaries in order to conserve working
capital of the Company. As of June 30, 1999, the total amount of such
voluntary deferral was $94,803. The Company also has not paid certain salaries
(at the voluntarily reduced rates) to the three executive officers of the
Company in the aggregate of $29,812 as of June 30, 1999. During the fourth
quarter of 1998 and first quarter of 1999, the three executive officers
of the Company made personal cash loans to the Company to allow the Company in
pay critical obligations to third parties in the aggregate amount of $28,579,
which amounts were fully repaid to those executives as of March 31, 1999. In
addition, certain of the director fees accrued for the last half of 1998 and
first half of 1999, in the amount of $11,000, remain unpaid as of June 30, 1999.
All of these amounts are reflected as liabilities of the Company as of June 30,
1999.
MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Changes in Financial Condition
From December 31, 1993 until February 26, 1999, TSVLP, a partnership owned by
subsidiaries of the Company, held a 40 percent undivided interest in the Tonkin
Springs Properties (the Properties) subject to a mining joint venture, the
Tonkin Springs Project Joint Venture as amended ( the 1993 Agreement) with Gold
Capital Corporation (Gold Capital) which is a subsidiary of Globex Mining
Enterprises, Inc. (Globex), a Canadian corporation with shares traded on the
Toronto stock exchange (symbol: GMX).
Effective February 26, 1999 (the Effective Date) TSVLP and Gold Capital
terminated the 1993 Agreement and each retained their respective 40 percent and
60 percent undivided interests in the Properties. Gold Capital then immediately
sold its 60 percent undivided interest in the Properties to Tonkin Springs
Holdings Inc., a Colorado corporation (TSHI) which is owned by subsidiaries of
Sudbury Contact Mines Limited, an Ontario, Canada corporation (Sudbury)
(SUD:TSE), which is itself a subsidiary of Agnico-Eagle Mines Limited, an
Ontario, Canada corporation (Agnico-Eagle) (AME:NYSE). TSHI then
immediately contributed its 60 percent undivided interest in the Properties into
a new limited liability company, Tonkin Springs LLC (TSLLC) in exchange for 60
percent of the equity membership interest of TSLLC, and TSVLP contributed its 40
percent undivided interest in the Properties into TSLLC in exchange for 40
percent of the equity membership interest of TSLLC. The objective of TSLLC is
the exploration, evaluation and, if justified, the development and mining of
mineral resources in the Properties.
Under the Members Agreement and the Operating Agreement of the TSLLC, TSHI is
required to fund all costs related to the Properties, including all holding,
administrative, operational and exploration costs, until TSHI has first expended
$4 million on Exploration (exploration costs only) of the Properties (the Cut-
Off Date). Through June 30, 1999, TSLLC has reported the balance of Exploration
expenditures on the Properties is approximatley $48,898. After the Cut-Off
Date, TSVLP is required to fund its 40 percent share of all costs of the
Properties or be subject to dilution under a formula. However, as long as TSHI
owns at least 50 percent interest in TSLLC, TSHI is obligated to loan TSVLP its
share of funding of an adopted program and budget after the Cut-Off Date under
one-year term loans (the Elected Loan) with an interest rate of LIBOR plus 2
percent. If, however, TSVLP does not repay an Elected Loan when due, TSHI shall
have no further obligation to make additional Elected Loans to TSVLP and the
amounts of defaulted Elected Loans shall be incorporated into the computation of
dilution of TSVLPs working interest under a formula. If the ownership interest
of any Member falls to 10 percent or less as a result of the forgoing
calculation, then such Member shall be deemed to have withdrawn from the TSLLC
and to have automatically relinquished and transferred its interest to the other
Member and upon such relinquishment the withdrawing Member shall be granted an
overriding 2 percent net smelter royalty (the NSR) on products subsequently
extracted, removed and sold from the Properties. After the Cut-Off Date, TSHI
is required to exercise reasonable efforts to attempt to obtain third party
project financing for any development of the Properties requiring funding of
more than $20 million.
The Company recognized neither a gain nor a loss on the termination of the 1993
Agreement or with the contribution of its 40 percent undivided interest in the
Properties to the TSLLC.
Liquidity and Capital Resources
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March 1, 1999
TSHI began making additional payments to TSVLP in the amount of $45,000 per
month through December 1, 2001 (collectively Minimum Payments to TSVLP). During
the six months ended June 30, 1999, the Company received $370,000 in Minimum
Payments to TSVLP which are reflected in revenue in the Statements of
Operations. As of June 30, 1999, there remains recorded a $1,350,000 receivable
due from the TSLLC reflecting remaining Minimum Payments to TSVLP of which
$540,000 is classified as a current asset offset by a $1,350,000 deferred
credit, with the effect that the entire receivable is offset by a deferred
credit.
During the six months ended June 30, 1999, the Company sold 200,000 shares of
Globex for aggregate $20,970 recognizing a gain on the sale of $1,172.
The Operating Agreement of the TSLLC defines Commencement of Commercial
Production (CCP). On the last day in the calendar month in which CCP is
achieved, TSHI shall pay TSVLP an additional amount to be calculated by
multiplying $15,000 times the number of months from the Effective Date through
the month in which CCP is achieved (the Lump-Sum Payment).
As of June 30, 1999, the Company had working capital of $347,446 made up of
current assets of $540,831 and current liabilities of $193,385. During the next
twelve months the Company anticipates receipt of $540,000 in Minimum Payments to
TSVLP from TSHI. The Company may also sell a portion of its common stock of
Globex as well as possibly issue equity in public or private transactions to
raise additional working capital. These items are the primary source of working
capital presently anticipated during 1999. Net cash used in operations
decreased to $(17,247) for the six months ended June 30, 1999 from ($483,240)
for the corresponding period of 1998, primarily reflecting the $370,000 in
Minimum Payments to TSVLP during the 1999 period as well as lower cash paid to
suppliers and employees. Cash flow from investing activities increased to
$20,527 in 1999 from ($4,833) during the 1998 period, primarily reflecting the
sale of marketable securities in the 1999 period. Cash flows from financing
activities decreased from none for 1998 to ($4,403) for 1999.
Results of Operations - 1999 Compared to 1998
For the six month period ended June 30, 1999, the Company recorded a net loss of
$14,119 compared to a loss of $512,953 in the corresponding six month period of
1998. During the 1999 period, $370,000 in Minimum Payments to TSVLP were
received and recognized in income while in 1998 no such payments were recorded.
General and Administrative expenses decreased approximately $145,561 in the 1999
period compared to 1998, primarily reflecting lower salary expense as well as
lower office rent.
For the three month period ended June 30, 1999, the Company recorded a net loss
of $21,883 compared to a loss of $274,545 in the corresponding period of 1998.
During the 1999 period, $135,000 in Minimum Payments to TSVLP were received and
recognized in income while in 1998 no such payments were recorded. General and
Administrative expenses decreased approximately $120,543 in the 1999 period
compared to 1998, primarily reflecting lower salary expense as well as lower
office rent.
Other
The Company has addressed Year 2000 Issue as relates to the computing systems,
software and programs for which the Company relies to determine which are year
2000 compliant. The Company has concluded that such systems, software and
programs which are not year 2000 compliant will be replaced prior to January 1,
2000 at an estimated cost of approximately $30,000.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
6.a No report required.
6.b No report required.
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
U.S. GOLD CORPORATION
Dated: August 11, 1999 By /s/ William W. Reid
William W. Reid, President and Chairman
of the Board
Dated: August 11, 1998 By /s/ William F. Pass
William F. Pass, Vice President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE 6/30/99 FORM
10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 831
<SECURITIES> 69,450
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 540,000
<PP&E> 0
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<TOTAL-ASSETS> 3,761,145
<CURRENT-LIABILITIES> 193,385
<BONDS> 0
0
0
<COMMON> 1,392,747
<OTHER-SE> 146,583
<TOTAL-LIABILITY-AND-EQUITY> 3,761,145
<SALES> 370,000
<TOTAL-REVENUES> 363,445
<CGS> 0
<TOTAL-COSTS> 365,437
<OTHER-EXPENSES> 8,448
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,679
<INCOME-PRETAX> (14,119)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,119)
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<NET-INCOME> (14,119)
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