TABLE OF CONTENTS
- --------------------------------------------------------------------------------
10-Q
PART 1 ....................................................................4
ITEM 1 ....................................................................4
Balance Sheet .............................................................4
Income Statement 1 ........................................................5
Income Statement 2 ........................................................5
Cash Flow Statement .......................................................6
Table 5 ...................................................................6
Table 6 ...................................................................7
Table 7 ...................................................................8
Table 8 ...................................................................9
Item 2 ...................................................................9
PART II ..................................................................11
Item 1 ..................................................................11
Item 2 ..................................................................11
Item 3 ..................................................................12
Item 4 ..................................................................12
EX-27
Exhibit 27 Table .........................................................12
<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[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.
[ ] 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: 0-7693
INTERNATIONAL MERCANTILE CORPORATION
--------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
MISSOURI 43-0970243
-------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
1625 Knecht Avenue, Baltimore, MD 21227
-------------------------------------------
(Address of principal executive offices)
410-242-5000
---------------------------
(Issuer's 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 [ ] No [x]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
4,523,536 Class A Common Shares as of June 30, 1999
1,000,000 Class B Common Shares as of June 30, 1999
Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the period ended June 30, 1999
included herein have been prepared by International Mercantile Corporation, (the
"Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of June 30, 1999, and the results of
operations and cash flows for the six month periods ended June 30, 1998 and
1999.
INTERNATIONAL MERCANTILE CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30,
December 31, 1999
1998 Unaudited
---- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 205,022 $214,905
Loans receivable -0- 220,832
Mortgages receivable 108,800 -0-
------- -------
Current assets 313,822 435,737
CAPITAL ASSETS-NET 6,328 5,159
OTHER ASSETS
Excess of purchase price over assets acquired 1,120,186 1,120,186
Notes receivable-affiliated parties 232,591 232,591
S Securities-available for sale 481,872 618,372
Security deposit 5,488 5,489
Intangible assets 32,241 24,192
------ ---------
TOTAL OTHER ASSETS 1,872,378 2,000,830
--------- ---------
TOTAL ASSETS $2,192,528 $2,441,726
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 4,397 $ 6,071
Payroll liabilities and taxes payable 74,263 126,403
Warehouse loan payable 103,360 25,000
Notes payable 57,494 57,494
Deferred income 5,440 -0-
Bank line of credit 200,700 202,628
-------- ---------
Total current liabilities 445,654 417,596
CAPITAL STOCK
Preferred stock- Series 1- authorized 10,000,000 shares, $0.10 par value
each, at June 30, 1999, the number of shares outstanding is -0-.
Preferred stock- Series 2 - authorized 2,000,000 shares, $0.10 par value
each, at June 30, 1999, the number of shares outstanding is -0-.
Preferred stock - Series 3, authorized 5,000,000, $0.10 par value each. At
June 30, 1999, the number of shares outstanding is -0- .
Common stock-Class A-authorized 31,000,000 common shares, par value $0.01 33,236 45,335
each, at December 31, 1998 and June 30, 1999, the number of shares
outstanding was 3,323,615 and 4,533,536 respectively
Common stock - Class B - authorized 2,000,000, $0.01 par value each, the number 10,000 10,000
of shares outstanding at December 31, 1998 and June 30, 1999 is 1,000,000
Unrealized gain on securities available for sale -0- 136,500
Additional paid in capital 13,783,133 14,194,512
Retained earnings (11,265,312) (11,548,034)
---------- ----------
Total stockholders' equity 2,561,057 2,838,313
Less treasury stock (814,183) (814,183)
--------- --------
Total stockholders equity 1,746,874 2,024,130
--------- ---------
Total liabilities and stockholders' equity $2,192,528 $2,441,726
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL MERCANTILE CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the six For the six
months ended months ended
June 30, June 30,
1998 1999
Unaudited Unaudited
--------- ---------
<S> <C> <C>
Revenue $ 443,289 $ 541,890
Mortgage related expenses 253,706 322,555
------- -------
Gross profit 189,583 219,335
------- -------
Operations:
General and administrative 1,026,526 442,981
Depreciation and amortization 1,682 9,288
---------- -------
Total expense 1,028,208 452,269
------- -------
Income (loss) from operations (838,625) (232,934)
Corporate income taxes -0- -0-
Other income
Interest income 2,385 2,430
Gain (loss) on sale of asset 250 (44,368)
Interest expense (4,883) (7,850)
-------- --------
Net Profit (Loss) $(840,873) $(282,722)
======== ========
Net income (loss) per share - basic $(0.21) $ (0.06)
======= ========
Number of shares outstanding 3,976,282 4,533,536
========== =========
Net income (loss) per share - diluted $(0.21) $(0.06)
========= =========
Number of shares outstanding 3,976,282 4,533,536
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL MERCANTILE CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the three For the three
months ended months ended
June 30, June 30,
1998 1999
Unaudited Unaudited
--------- ---------
<S> <C> <C>
Revenue $ 210,403 $ 204,627
Mortgage related expenses 117,053 144,831
-------- --------
Gross profit 93,350 59,796
-------- --------
Operations:
General and administrative 760,229 182,262
Depreciation and amortization 841 4,670
-------- -------
Total expense 761,070 186,932
-------- -------
Income from operations (667,720) (127,136)
Corporate income taxes -0- -0-
Other income
Interest income 787 1,010
Gain (loss) on sale of asset 250 (44,368)
Interest expense (2,200) (3,050)
-------- -------
Net Profit (Loss) $(669,133) $(173,544)
======== ========
Net income (loss) per share - basic $(0.17) $(0.04)
======== ========
Number of shares outstanding 3,976,282 3,533,536
========= =========
Net income (loss) per share - diluted $(0.17) $(0.04)
======== ========
Number of shares outstanding 3,976,282 3,533,536
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL MERCANTILE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the six For the six
months ended months ended
June 30, June 30,
1998 1999
Unaudited Unaudited
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (840,873) $ (282,722)
Depreciation 1,682 9,288
Non cash items 378,699 -0-
Adjustments
Accounts payable and accrued expenses 56,950 1,674
Accrued salaries and payroll taxes payable (12,495) 52,140
------- -------
TOTAL CASH FLOWS FROM OPERATIONS (416,037) (219,620)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Mortgages receivable 374,800 108,800
Fixed assets (2,500) (71)
Notes and loans receivable (66,667) (220,832)
------- -------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES 305,633 (112,103)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of capital stock 420,000 423,478
Warehouse loan payable (357,740) (78,360)
Bank line of credit (79,000) 1,928
Deferred income (17,060) (5,440)
------- -------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES (33,800) 341,606
------- -------
NET INCREASE (DECREASE) IN CASH (144,204) 9,883
CASH BALANCE BEGINNING OF PERIOD 290,951 205,022
------- -------
CASH BALANCE END OF PERIOD $146,747 $214,905
======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL MERCANTILE CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Preferred Preferred Preferred Class A Class A Class B Class B
Stock Stock Stock Common Common Common Common
Date Series 1 Series 2 Series 3 Stock Stock Stock Stock
---- -------- -------- -------- ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
12-31-1995 3,133,151 $3,133,151
Net loss
--------- ---------
12-31-1996 3,133,151 3,133,151
--------- ---------
Reflects 31 to 1 reverse split 101,083 1,011
Shares issued for consulting fees 946,500 9,465
Shares issued for acquisitions 1,910,000 19,100
Sale of shares through private 220,000 2,200
Placement at $1.00 per share
12-31-1997 Net loss
Prior period correction - (1,000,000) (10,000)
Cancellation of shares --------- ---------
12-31-1997 2,177,583 21,776
hares 420,000 4,200
Issuance of shares as 1,093,699 10,937
Non cash compensation
Issuance of shares for 125,000 1,250
Legal expenses
Issuance of shares pursuant 507,333 5,073
To S-8 options valued at $1.74
Exchange of shares (1,000,000) (10,000) 1,000,000 10,000
12/31/98 Net loss
---- ---- ---- --------- --------- --------- ------
12-31-1998 -0- -0- -0- 3,323,615 $ 33,236 1,000,000 10,000
Sale of shares 1,209,921 12,099
6-30-99 Net loss
---- ---- ---- --------- --------- ---------- ------
6-30-99 -0- -0- -0- 4,533,536 $ 45,335 1,000,000 10,000
==== ==== ==== ========= ========= ========== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Additional Treasury Retained Unrealized Gain
Date Paid in capital Stock Earnings on Securities Total
---- -------------- ----- -------- -------------- -----
<S> <C> <C> <C> <C> <C>
12-31-1995 $5,326,395 $(814,183) $(7,958,757) $(313,395)
12-31-1996 Net loss -0- -0-
---------- ---------- ----------- --------
12-31-1996 5,326,395 $(814,183) $(7,958,757) $ (313,395)
---------- ---------- ----------- --------
Reflects 31 to 1 reverse split 8,458,535 (814,183) $(7,958,757) (313,395)
Shares issued for consulting 947,035 956,500
Shares issued for acquisition 2,500,900 2,520,000
Sale of shares - private plmt 217,800 220,000
Prior period correction (990,000) (1,000,000)
12-31-1997 Net loss (1,511,538) (1,511,538)
---------- --------- --------- ---------
12-31-1997 11,134,270 (814,183) (9,470,295) 871,568
Sale of shares 415,800 420,000
Issuance of shares as 1,100,762 1,111,699
Non cash compensation
Issuance of shares for 254,375 255,625
Legal expense
Issuance of shares pursuant 877,927 883,000
To S-8
Exchange of shares -0-
12-31-98 Net loss (1,795,017) (1,795,017)
---------- --------- ---------- ---------
12-31-1998 $13,783,134 $(814,183) $(11,265,312) $1,746,875
Sale of shares 411,378 423,477
Unrealized Gain on Securities 136,500 136,500
6-30-99 Net loss (282,722) (282,722)
---------- --------- ---------- -------- ----------
6-30-99 $14,194,512 $(814,183) $(11,548,034) 136,500 $2,024,130
========== ======== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL MERCANTILE CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of International
Mercantile Corporation, (the "Company"), reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the results of the
interim periods presented. All such adjustments are of a normal recurring
nature. The financial statements should be read in conjunction with the notes to
financial statements contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
2. NET INCOME PER SHARE
Shares used in calculating basic and diluted net income per share were as
follows:
For the six For the six
months ended months ended
June 30, June 30,
1998 1999
------------- --------------
Total number common
shares outstanding 3,976,282 4,533,536
========= =========
3. ACCOUNTING FOR INCOME TAXES
The Company follows Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes," which requires an asset and
liability approach of accounting for income taxes. Deferred tax assets and
liabilities are computed annually for differences between financial statement
basis and tax basis of assets, liabilities and available general business tax
credit carry-forwards. A valuation allowance is established when necessary to
reduce deferred tax assets to the amount expected to be realized.
4. MARKETABLE SECURITIES
The Company adopted Financial Accounting Standards Board ("FASB")
Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", which requires that investments in equity securities that have
readily determinable fair values and investments in debt securities be
classified in three categories: held-to-maturity, trading and
available-for-sale. Based on the nature of the assets held by the Company and
Management's investment strategy, the Company's investments have been classified
as available-for-sale. Management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such designation as of
each balance sheet date. Securities classified as available-for-sale are carried
at estimated fair value, as determined by quoted market prices, with unrealized
gains and losses, net of tax, reported in a separate component of stockholders'
equity. At December 31, 1998 and June 30, 1999, the Company had no investments
that were classified as trading or held-to-maturity as defined by the Statement.
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at December 31, 1998:
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
----- -------- --------- -----
Cash $ 205,022 $ -0- $ -0- $ 205,022
------- ------ ------- ---------
Total cash and cash
equivalents $ 205,022 $ -0- $ -0- $ 205,022
Securities-available for
sale $ 580,000 $ -0- $(98,128) $ 481,872
-------- ------ ------- -------
Total cash, cash
equivalents and
securities available
for sale $ 785,022 $ -0- $(98,128) $ 686,894
======== ====== ======= ========
<PAGE>
The following is a summary of cash, cash equivalents and
available-for-sale securities by balance sheet classification at June 30, 1999:
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
----- -------- --------- -----
Cash $ 214,905 $ -0- $ -0- $ 214,905
--------- -------- --------- ----------
Total cash and cash
equivalents $ 214,905 $ -0- $ -0- $ 214,905
Securities-available for
sale $ 580,000 $190,000 $(151,628) $ 618,372
--------- -------- --------- ----------
Total cash, cash
equivalents and
securities available
for sale $ 794,905 $190,000 $(151,628) $ 833,277
========= ======== ========= ==========
5. Commitments and Contingencies
a. The employment agreement with Mr. Walter Deronde has been cancelled.
b. The employment agreement with Mr. Max Apple has also been cancelled.
c. The financial consulting agreement with Frederic Richardson has been paid
in full.
6. Private Placement
Pursuant to a private placement under Rule 506 of the Securities Act of 1933,
the Company is offering a minimum of 4 Units and a maximum of 80 Units of its
securities. Each Unit is being sold at $25,000 per Unit and consists of 20,833
shares of Class A Common Stock and 20,833 shares of Convertible Series 1
Preferred Stock, which are convertible into 20,833 shares of Class A Common
Stock. The Units are being offered on a "best-efforts" basis. The Minimum Amount
of securities offered shall be 4 Units. The Units must be purchased for
investment purposes only and the free transferability of the securities is
restricted.
This Offering will terminate on the earlier of receipt and acceptance of
subscriptions for all 80 Units or December 31, 1999, unless extended in the sole
discretion of the Company for an additional period of up to 90 days, subject to
termination at any time prior thereto by the Company.
As of June 30, 1999, the Company has sold several Units. The Company has
reserved approximately $200,000 worth of shares.
Item 2. Management's Discussion and Analysis or Plan of Operation
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the six months ended June 30, 1998 and 1999
------------------------------------------------
Except for the description of historical facts contained herein, this
Form 10Q contains certain forward looking statements that involve risks and
uncertainties as detailed herein and from time to time in the Company's filings
with the Securities and Exchange Commission and elsewhere. Such statements are
based on management's current expectations and are subject to a number of
factors and uncertainties which could cause actual results to differ materially
from those described in the forward-looking statements. These factors include,
among others, the Company's fluctuations in sales and operating results, risks
associated with international operations and regulatory, competitive and
contractual risks and product development.
Results of operations for the six months ended June 30, 1999 as compared to the
six months ended June 30, 1998.
- --------------------------------------------------------------------------------
Revenues were $541,890 for the six months ended June 30, 1999 as compared to
$443,289 for the six months ended June 30, 1998. Mortgages and related expenses
for the six months ended June 30, 1999 were $322,555 as compared to $253,706 for
the six months ended June 30, 1998, representing a cost of mortgages related
expenses of 59.5% for the six months ended June 30, 1999 as compared to 57.2%
for the six months ended June 30, 1998.
General and administrative costs for the six months ended June 30, 1999 were
$442,981, a decrease of 56.8% over expenses of $1,026,526 for the six months
ended June 30, 1998. Results of operations for the three months ended June 30,
1999 as compared to the three months ended June 30, 1999.
- -------------------------------------------------------------------------------
Revenues were $204,627 for the three months ended June 30, 1999 as compared to
$210,403 for the three months ended June 30, 1998. Mortgages and related
expenses for the three months ended June 30, 1999, were $144,831 as compared to
$117,053 for the three months ended June 30, 1998, representing a cost of
mortgages related expenses of 70.8% for the three months ended June 30, 1999 as
compared to 55.6% for the three months ended June 30, 1998.
General and administrative costs for the three months ended June 30, 1999 were
$182,262, a decrease of 76.0% over expenses of $760,229 for the three months
ended June 30, 1998.
Liquidity and capital resources as of the end of the six months ended June 30,
1999.
- --------------------------------------------------------------------------------
The Company's cash balance was $214,905 and working capital was a negative
$18,141 as at June 30, 1999.
The Company's primary short-term needs for capital, which are subject to change,
are for the search for acquisitions, operation of the Company's mortgage
business payment of the day to day operating expenses.
Income tax: As of June 30, 1999, the Company has a tax loss carry-forward of
$12,213,646. The Company's ability to utilize its tax credit carry-forwards in
future years will be subject to an annual limitation pursuant to the "Change in
Ownership Rules" under Section 382 of the Internal Revenue Code of 1986, as
amended. However, any annual limitation is not expected to have a material
adverse effect on the Company's ability to utilize its tax credit
carry-forwards.
The Company expects its capital requirement to increase over the next several
years as it continues to develop its mortgage business and seek new mortgage
company related acquisitions, increases sales and administration infrastructure
and embarks on developing in-house business capabilities and facilities. The
Company's future liquidity and capital funding requirements will depend on
numerous factors, including the extent to which the Company's present management
can fund the continued capital requirements, the timing of regulatory actions
regarding the Company's potential acquisitions, the costs and timing of
expansion of sales, marketing activities, facilities expansion needs, and
competition in the mortgage business entered into.
The Company believes that its available cash and cash from management
contributions will be sufficient to satisfy its funding needs for the day to day
mortgage banking activities for at least the next 12 months. Thereafter, if cash
generated from any
<PAGE>
newly acquired or developed business operations is insufficient to satisfy the
Company's working capital and capital expenditure requirements, the Company may
be required to sell additional equity or debt securities or obtain additional
credit facilities. There can be no assurance that such financing, if required,
will be available on satisfactory terms, if at all.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The company of Browne of NY sued for outstanding printing invoices in the amount
of $18,000. Negotiations are in process.
Item 2. Changes in Securities
Amendment to the Certificate of Incorporation
The Company has amended its certificate of incorporation to authorize the
Company to issue an aggregate of 50,000,000 shares of stock as follows:
31,000,000 shares of Class A Common Stock, par value $0.01 per share.
2,000,000 shares of Class B Common Stock, $0.01 per share.
10,000,000 shares of Preferred Stock, Series 1, $0.10 per share.
2,000,000 shares of Preferred Stock, Series 2, $0.10 per share.
5,000,000 shares of Preferred Stock, Series 2, $0.10 per share.
Class A Common Stock.
The holders of shares of Class A Common Stock are entitled to 1 vote per share
and do not have cumulative voting rights on the election of directors. Upon any
liquidation, dissolution or winding up of the Company, holders of shares of
Class A Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to holders of shares of the Company's Class A
Common Stock. Shareholders of the Company do not have any preemptive rights to
subscribe for or purchase any stock, obligations, warrants or other securities
of the Company.
Class B Common Stock
The holders of shares of Class B Common Stock are entitled to 51 votes per share
and do not have cumulative voting rights on the election of directors. Upon any
liquidation, dissolution or winding up of the Company, holders of shares of
Class B Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to holders of shares of the Company's Class B
Common Stock. Shareholders of the Company do not have any preemptive rights to
subscribe for or purchase any stock, obligations, warrants or other securities
of the Company.
Series 1 Convertible Preferred Stock
Each share of Series 1 Preferred Stock is convertible into one (1) share of
Class A Common Stock at any time for 3 years following issuance, at a price of
two dollars ($2.00) per share. The Series 1 Preferred Stock does not carry any
voting rights. In the event the Company declares a dividend, the Series 1
Preferred Stock has a dividend preference to that of the Class A Common Stock.
The Series 1 Preferred Stock is redeemable by the Company for $.10 per share at
any time after the first annual anniversary of issuance, if the average closing
bid price of the Class A Common Stock for 10 business days immediately preceding
the date of such redemption notice is at least 125% of the exercise price of the
Series 1 Preferred Stock. Following any such redemption notice, the holder of
the Series 1 Preferred Stock shall have the opportunity to convert the Series 1
Preferred Stock for a period of 20 days following such notice.
<PAGE>
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL MERCANTILE CORPORATION
(Registrant)
By: ------------------
PRESIDENT
Dated:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the six month period ended June 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000051387
<NAME> INTERNATIONAL MERCANTILE CORP
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 214,905
<SECURITIES> 618,372
<RECEIVABLES> 220,832
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 435,737
<PP&E> 139,655
<DEPRECIATION> 134,497
<TOTAL-ASSETS> 2,441,726
<CURRENT-LIABILITIES> 417,596
<BONDS> 0
0
0
<COMMON> 55,335
<OTHER-SE> 2,782,978
<TOTAL-LIABILITY-AND-EQUITY> 2,441,726
<SALES> 541,890
<TOTAL-REVENUES> 541,890
<CGS> 322,555
<TOTAL-COSTS> 442,981
<OTHER-EXPENSES> (9,288)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,850
<INCOME-PRETAX> (282,722)
<INCOME-TAX> 0
<INCOME-CONTINUING> (282,722)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (282,722)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
