UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] 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: 2-35700
Wasatch Pharmaceutical, Inc.
----------------------------
(Exact name of registrant as specified in charter)
Utah 84-0854009
---- -----------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
714 East 7200 South, Midvale, Utah 84047
- ---------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(801) 566-9688
--------------
Issuer's telephone number, including area code
Not Applicable
---------------
(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). Yes [X] No [ ] and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
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 A Common Stock, $.001- 8,835,956 Outstanding as of March 31, 1997
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholder's
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of March 31, 1997, and the
related audited balance sheet of the Company as of December 31, 1996, the
unaudited related statements of operations and cash flows for the three month
periods ended March 31, 1997 and 1996 and from inception (September 7, 1989)
through March 31, 1997, are attached hereto and incorporated herein by this
reference.
Operating results for the quarter ended March 31, 1997 are not necessarily
indicative of the results that can be expected for the year ending December 31,
1997.
2
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
MARCH 31, DECEMBER 31,
1997 1996
(Unaudited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 1,202 $ 11,991
Accounts receivable - trade 1,996 2,925
Accounts receivable - stockholder 6,600 6,600
Inventory 9,813 8,586
---------- ----------
Total Current Assets 19,611 30,102
PROPERTY AND EQUIPMENT
Oil and gas properties, successful
efforts method 3,743,227 3,719,536
Furniture and office equipment 41,154 39,749
---------- ----------
3,784,381 3,759,285
Less accumulated depreciation
& depletion (18,259) (15,668)
---------- ----------
Net property and equipment 3,766,122 3,743,617
---------- ----------
OTHER ASSETS
Deferred costs 11,775 600
Investment 1,332 750
---------- ----------
13,107 1,350
---------- ----------
TOTAL ASSETS $3,798,840 $3,775,069
========== ==========
</TABLE>
3
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(Unaudited)
CURRENT LIABILITIES
<S> <C> <C>
Cash overdraft $ 1,772 $ 691
Accounts payable - trade 118,610 104,424
Accrued physicians fees 53,650 47,650
Accounts payable related party 6,500 6,500
Joint operator payable 5,535 8,011
Royalties payable 1,027 883
Accrued interest 182,903 161,226
Accrued payroll taxes 77,287 44,109
Current portion of notes payable
Vendors 112,333 117,333
Stockholders 849,388 794,387
----------- -----------
Total Current Liabilities 1,409,003 1,285,214
LONG TERM LIABILITIES
Notes payable (less current portion) 5,000 5,000
----------- -----------
TOTAL LIABILITIES 1,414,003 1,290,214
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value,
1,000,000 shares authorized, 49,258
issued and outstanding 49 49
Common stock, $0.001 par value,
50,000,000 shares authorized,
8,835,956 shares issued
and outstanding. 8,836 6,636
Additional paid-in capital 4,906,832 4,362,549
Deficit accumulated during the
development stage (1,710,880) (1,584,379)
----------- -----------
3,204,837 2,784,855
Less note receivable stockholder (820,000) (300,000)
----------- -----------
Total Stockholder's Equity (Deficit) 2,384,837 2,484,855
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 3,798,840 $ 3,775,069
=========== ===========
</TABLE>
4
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Consolidated Statement of Operations
<TABLE>
<CAPTION>
THREE MONTHS ENDED THROUGH
MARCH 31, MARCH 31,
1997 1996 1997
(Unaudited) (Unaudited) (Unaudited)
REVENUES
<S> <C> <C> <C>
Professional fee income $ 7,248 $ 8,208 $ 153,114
Product sales 14,999 25,291 321,077
Oil and gas sales 1,495 0 4,516
----------- ----------- -----------
Total Revenues 23,742 33,674 478,707
----------- ----------- -----------
OPERATING EXPENSES
Cost of goods sold 1,019 1,807 38,313
Salaries 18,503 34,895 201,582
Payroll taxes 2,375 3,804 22,312
Employee leasing 0 0 218,745
Physicians fees 10,200 14,400 164,668
Rent 8,035 9,969 109,333
Advertising 4,359 7,221 210,661
Depreciation 1,687 1,777 18,887
----------- ----------- -----------
Total 46,179 73,873 984,502
General and administrative 82,555 69,290 943,186
Oil and gas expenses 6,145 0 17,982
----------- ----------- -----------
Total Operating Expenses 134,879 143,163 1,945,670
----------- ----------- -----------
INCOME (LOSS) BEFORE OTHER
INCOME (EXPENSE) AND PROVISION
FOR INCOME TAXES (111,138) (109,489) (1,466,964)
----------- ----------- -----------
OTHER INCOME (EXPENSES)
Interest expense (21,821) (17,144) (199,847)
Other - Net 6,458 (1,782) (44,068)
----------- ----------- -----------
Total Other Expenses (15,363) (18,926) (243,915)
----------- ----------- -----------
NET INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAXES (126,501) (128,590) (1,710,879)
Provision for income taxes 0 0 0
----------- ----------- -----------
NET INCOME (LOSS) $ (126,501) $ (128,590) $(1,710,879)
=========== =========== ===========
NET INCOME (LOSS) PER SHARE
OF COMMON STOCK $ (0.018) $ (0.043) $ (0.607)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,198,178 3,022,332 2,820,561
=========== =========== ===========
</TABLE>
5
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
FROM
FOR THE THREE INCEPTION
MONTHS ENDED THROUGH
MARCH 31, MARCH 31,
1997 1996 1997
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C> <C>
Net Income (Loss) $ (126,501) $ (128,590) $(1,710,879)
Adjustments to Reconcile Net
Income(Loss) to Net Cash
Provided (Used) by Operating
Activities
Depreciation 2,591 1,777 20,957
Expenses paid by shareholder 0 0 46,737
(Increase) decrease in receivables 929 (1,414) (1,996)
(Increase) decrease in
receivables-related parties 0 0 (6,600)
(Increase) decrease in inventory (1,227) (4,477) (9,813)
Increase (decrease) in cash
overdraft 1,081 (1,155) 1,772
Increase (decrease) in accounts
payable 0 0
Trade 14,186 22,211 118,610
Physicians 6,000 7,145 53,650
Related party 0 0 6,500
Increase (decrease) in accrued
interest 21,677 23,726 235,906
Increase (decrease) in other
accrued expenses 30,846 0 34,359
----------- --------- -----------
Net Cash Provided (Used) by
Operating Activities (50,418) (80,777) (1,210,797)
----------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (25,096) 0 (51,056)
(Increase) decrease in other assets (11,757) 0 (12,357)
----------- --------- -----------
Net Cash Provided (Used) by
Investing Activities (36,853) 0 (63,413)
----------- --------- -----------
</TABLE>
6
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Continued)
<TABLE>
<CAPTION>
FROM
FOR THE THREE INCEPTION
MONTHS ENDED THROUGH
MARCH 31, MARCH 31,
1997 1996 1997
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
<S> <C> <C> <C>
Proceeds from loans $ 55,000 $ 80,000 $ 1,089,452
Repayment of loans (5,000) 0 (130,947)
Expenses paid with common shares 0 0 5,965
Proceeds from sale of common shares 0 0 137,750
Collection of share subscriptions 30,000 0 30,000
Capital contributed by shareholder 0 0 154,800
Common shares exchanged for debt 0 0 12,318
Redemption of common shares 0 0 (20,409)
Costs of raising funds (3,517) 0 (3,517)
----------- ----------- -------------
Net Cash Provided (Used) by
Investing Activities 76,483 80,000 1,275,412
----------- ----------- -------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (10,788) (777) 1,202
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 11,990 777 0
----------- ----------- -------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 1,202 $ 0 $ 1,202
=========== =========== =============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid for interest $ 114 $ 0 $ 11,718
Cash paid for taxes $ 0 $ 0 $ 0
SUPPLEMENTAL SCHEDULE FOR NON-CASH
INVESTING AND FINANCIAL ACTIVITIES
Common shares issued for assets acquired
Clinical equipment and fixtures $ 0 $ 0 $ 13,790
Oil and gas properties $ 0 $ 0 $ 3,719,536
Preferred stock of insurance $ 0 $ 0 $ 750
Common share subscription notes $ 550,000 $ 0 $ 850,000
</TABLE>
7
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 1997 and December 31, 1996
NOTE 1 - NATURE AND HISTORY OF THE BUSINESS
These consolidated financial statements are those of Wasatch
Pharmaceutical, Inc. (A Development Stage Company) (the Company), and its wholly
owned subsidiaries, Medisys Research Group, Inc. and American Institute of Skin
Care, Inc. The Company was initially engaged in oil and gas exploration and
development and returned to that line of business with an investment in oil and
gas properties in November 1996. The Company's primary business segment is
described below. In December 1995, the Company (formerly Ceron Resources
Corporation; a dormant Delaware Corporation) merged with Medisys Research Group,
Inc. and its wholly owned subsidiary American Institute of Skin Care, Inc. In
January 1996 the Company was reincorporated in Utah.
On December 29, 1995 Wasatch Pharmaceutical, Inc. (Wasatch) and Medisys
Research Group, Inc. (Medisys) completed an Agreement and Plan of Reorganization
whereby Wasatch issued 10,312,216 (on a 1 share for 1 share basis) shares of its
common stock in exchange for all of the issued and outstanding common stock of
Medisys. Pursuant to the reorganization, the name of the Company was changed to
Wasatch Pharmaceutical, Inc. The acquisition was accounted for as a purchase by
Medisys of Wasatch, because the shareholders of Medisys control the company
after the acquisition and, therefore, Medisys is treated as the acquiring
entity. Wasatch is the acquiring entity for legal purposes and Medisys is the
surviving entity for accounting purposes.
Medisys Research Group, Inc. (Medisys), was incorporated on September 7,
1989 (the inception of the Company's development stage) as a Utah Corporation
for the purpose of developing treatment programs for various skin disorders.
American Institute of Skin Care, Inc. (AISC), was incorporated on January 21,
1994 as a Utah corporation to administer the skin treatment programs developed
by Medisys.
NOTE 2 - COMMON STOCK
During the first quarter the following common share and common share
option transactions occurred:
a. On March 8, 1997, five Directors and one former Director of the
company were each issued 200,000 restricted common shares in
consideration for a non recourse promissory note for $50,000, b. On
March 8, 1997, two principal officers of the company were each issued
500,000 restricted common shares in consideration for a non recourse
promissory note for $125,000, c. Common share subscription obligations
of $30,000 were paid during the quarter.
8
<PAGE>
WASATCH PHARMACEUTICAL, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 1997 and December 31, 1996
NOTE 3 - GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the comparative three month
period and from inception through March 31, 1997 are:
Inception
First Quarter to March
1997 1996 31, 1997
Officer's Compensation $ 32,825 $ 34,580 $ 415,409
Legal and accounting 15,776 13,200 190,533
Travel 4,995 4,614 39,355
Telephone 4,261 2,786 39,595
Insurance 162 1,234 4,544
Other 24,536 12,826 255,750
$ 82,555 $ 69,290 $ 943,186
NOTE 4 - 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. However, the Company is in the development stage and has not
established a source of revenues sufficient to allow it to continue as a going
concern. The Company is negotiating an agreement to raise short-term funding and
plans to seek long-term funding through a stock offering. Management believes
that sufficient funding will be raised to meet the operating needs of the
Company during the remainder of development stage.
NOTE 4 - CHANGES IN PRESENTATION
Certain financial presentations for the first quarter of 1996 have been
reclassified to conform to the 1997 presentation.
NOTE 5 - SUBSEQUENT EVENTS
On May 1, 1997, the Company rescinded a private placement agreement with
Lindbergh- Hammar Associates, Inc. (Lindbergh), whereby Lindbergh was to
purchased 12,000,000 shares of common stock of the Company at $5 per share on a
promissory note payable over a five year period in monthly amounts equal to ten
percent (10%) of the Insurance Premium income generated as a result of the
Company's stock being assigned to the capital and surplus account of Lindbergh.
9
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
PLAN OF OPERATION
Skin Care Business
The Company owns the proprietary technology for the treatment of various
common skin disorders, including acne, eczema, and psoriasis . As a follow-up to
previous clinical studies, prototype clinics were established two years ago with
the goal of duplicating the success rates achieved in clinical studies and to
establish medical, business and administrative procedures that could be
duplicated in clinics across the country. The two prototype treatment clinics
are currently in operation in Utah. Although the Company has confirmed the
technology through the successful treatment of hundreds of patients over the
last three years and has set up the business and administrative procedures, the
clinics have not reached a profitable level due to the lack of funds for
advertising and marketing. At this time, the Company does not have the resources
to fully implement a plan for the development and expansion of its clinic
operation. Due to lack of working capital, the Company's financial statements
contain a "going concern" disclosure which places into question the Company's
ability to continue without substantial increases in revenues or additional
long-term financing.
The Company is seeking funding to open two more clinics in major
metropolitan areas and to launch a major advertising and marketing campaign to
support each of the clinics. Management feels that the advertising and working
with health insurance companies and HMOs, supplemented by a physician referral
program would increase revenues above the break-even point.
Oil and Gas Operations
In the fourth quarter of 1996, the Company acquired a substantial interest
in proven reserves in West Virginia. In order to realize the full potential for
the asset, substantial resources will be required to improve production and
recomplete previously drilled oil and gas wells. The Company's joint interest
operator is in the process of raising the funds to commence the redevelopment
process.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had current assets of $19,611 and current
liabilities of $1,409,003, resulting in a working capital deficit of $1,389,392,
which is a 10% increase in the working capital deficit. The increase in the
deficit is due primarily to the Company's operating loss which was $126,501 for
the three month period ended March 31, 1997. The majority of expenses are
related to the operation of the Company's two prototype clinics and the expenses
of raising funds to expand its base of operating clinics.
For the three months ended March 31, 1997, the clinics' operating loss
decreased $16,267 to $23,962 when compared to the same quarter last year, which
was offset by increases in General & Administrative expenses of $13,265 and a
new Oil & Gas expenditure of $6,458. From inception to date, the majority of the
expenses have been associated with the development of the treatment process for
the clinics.
During the first quarter of 1997, the Company has expended approximately
$50,000 in completing the oil and gas acquisition and in efforts to raise
additional operating capital.
10
<PAGE>
RESULTS OF OPERATION
Skin Care Business
During the three months ending March 31, 1997, the Company had revenues of
$23,742 compared to $33,674 during the same three months of 1996, a decrease of
$9.932. There are two reasons for this decrease in revenue. During the first
three months of 1996, the Company had three prototype clinics generating revenue
from operations. The Company closed its clinic in Pocatello, Idaho in February,
1996. The Company's clinic operating expenses decreased by 6% in the three
months of 1997 as compared to the three months of 1996. due to a reduction in
salaries and other overhead expenses. The Company's corporate expenses increased
substantially due to increased legal, accounting and administrative expenses
that were associated with fund raising activities and the additional cost of
being a fully reporting public entity.
The Company anticipates that the losses will continue until funding is
obtained which will be used to launch the marketing program.
Oil and Gas Operations
During the first quarter of 1997, there was no significant progress in
the redevelopment of the Company's West Virginia oil and gas properties. Revenue
and expenses were minimal, $1,495 and $6,145, respectively.
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the first quarter the following common share and common share
option transactions occurred:
a. On March 8, 1997, five Directors and one former Director of the
company were each issued 200,000 restricted common shares in
consideration for a non recourse promissory note for $50,000, b. On
March 8, 1997, two principal officers of the company were each issued
500,000 restricted common shares in consideration for a non recourse
promissory note for $125,000, c. Common share subscription obligations
of $30,000 were paid during the quarter.
The common shares were issued in reliance on the exemption from
registration provided by Section 4 (2) of the Securities Act of 1934 and the
"Safe Harbor" of Regulation D, Rule 504.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
11
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
SEC
Exhibit Reference
No. No. Description Location
- ------- --------- ----------- --------
10:01 10 Cancellation letter
from the Company to
Lindbergh-Hammar Assoc. This Filing
10.02 10 Resolution of the Board
of Directors authorizing the
issuance of 2.2 million restricted
common shares for non-recourse
notes. This Filing
10.03 10 Sample of non-recourse notes
signed by officers and directors. This Filing
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WASATCH PHARMACEUTICAL, INC.
[Registrant]
Dated: May 15, 1997
/S/David K. Giles
- -----------------------------
David K. Giles
Principal Accounting Officer
13
WASATCH PHARMACEUTICAL, INC.
714 East 7200 South, Midvale, Utah 84047 Phone 801-566-9688 - Fax 801-566-9680
May 5, 1997
W.A. Guy
305 N.W. 7th Ave.
Mineral Wells, TX 76067
Dear W.A;
The Board of Directors has directed me to cancel all certificates issued in
behalf of Lindbergh-Hammar for failure to perform per our agreement. It's
important that you understand that this has been done.
Our every ho-e was that you would be successful, as it meant success for us
also. If sometime in the future you can secure the necessary funding and license
to establish you business in the insurance industry please let me know and I
will be more than happy to approach the board of Directors in your behalf.
Best Wishes,
/s/ Gary V. Heesch
Gary V. Heesch,
President
14
WASATCH PHARMACEUTICAL, INC.
714 East 7200 South, Midvale, Utah 84047 Phone 801-566-9688 - Fax 801-566-9680
The following is a copy of a board resolution that was approved by the Board of
Directors of Wasatch Pharmaceutical, Inc. on March 8, 1997:
RESOLVED, that the board approves the issuance of 2.2 million shares of
stock valued at $.25 per share in return for a non recourse promissionary note
signed by each individual in an amount equal to the number of shares times $.25:
Gary v. Heesch 500,000
David K. Giles 500,000
Craig Heesch 200,000
Robert Arbon 200,000
Jack Brotherson 200,000
Ronald Hollberg 200,000
Cecil Wall 200,000
Dan Roberts 200,000
/s/ David K. Giles May 15, 1997
------------------------------------ -------------------
David K. Giles, Corporate Secretary DATE
15
PROMISSORY NOTE
$50,000.00 March 8, 1997 Salt Lake City, Utah
FOR VALUE RECEIVED, Craig Heesch., an individual, promises to pay to the order
of WASATCH PHARMACEUTICAL, INC., the sum of FIFTY THOUSAND DOLLARS ($50,000.00),
in legal and lawful money of the United States of America, with interest thereon
at the rate of six percent (6%) per annum.
The principal and interest of this note is due and payable on May 8, 2001.
Maker reserves the right to prepay this note in any amount at any time prior to
maturity without penalty.
This note is a non recourse note. The only collateral on this note will be
500,000 shares of restricted common stock which will be held by the company
until this note plus accrued interest is paid in full.
Failure to pay any part of the principal or interest of this note when due, or
failure to carry out any of the terms, covenants, or conditions of said
Agreement, shall authorize the holder of this note to declare as immediately due
and payable the then unpaid principal, and to dispose of the stock to settle
this debt.
If executed via telefax this document will be construed as an original document
as an Original signature with hardcopy to be delivered via overnight courier
same day of receipt.
BY: /s/ CRAIG HEESCH
---------------------
CRAIG HEESCH
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,202
<SECURITIES> 0
<RECEIVABLES> 8,596
<ALLOWANCES> 0
<INVENTORY> 9,813
<CURRENT-ASSETS> 19,611
<PP&E> 3,743,227
<DEPRECIATION> 18,259
<TOTAL-ASSETS> 3,798,840
<CURRENT-LIABILITIES> 1,409,003
<BONDS> 0
0
2,463
<COMMON> 8,836
<OTHER-SE> 2,343,538
<TOTAL-LIABILITY-AND-EQUITY> 3,798,840
<SALES> 14,999
<TOTAL-REVENUES> 23,742
<CGS> 1,019
<TOTAL-COSTS> 134,879
<OTHER-EXPENSES> (6,458)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,821
<INCOME-PRETAX> (126,501)
<INCOME-TAX> 0
<INCOME-CONTINUING> (126,501)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,501)
<EPS-PRIMARY> (.018)
<EPS-DILUTED> (.018)
</TABLE>
