UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1999
----------------
Commission File No. 0-3858
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INTERNATIONAL LEISURE HOSTS, LTD.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Wyoming 86-0224163
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3207 S. Hardy Drive, Tempe, AZ 85282
- --------------------------------------- ----------
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (602) 829-7600
-----------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the 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 issuer's classes of common
stock as of the close of the latest practicable date. There were 694,477 shares
of $.01 par value common stock outstanding as of June 30, 1999.
Page 1 of 12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - SUMMARIZED FINANCIAL INFORMATION
INTERNATIONAL LEISURE HOSTS, LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, March 31,
1999 1999
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 404,384 $ 296,291
Accounts receivable 1,145 9,854
Income tax refund receivable 22,500 --
Merchandise inventories 223,700 92,481
Prepaid expenses and other 28,675 18,936
---------- ----------
Total current assets 680,404 417,562
---------- ----------
PROPERTY AND EQUIPMENT:
Buildings and improvements 5,421,138 5,421,138
Equipment 1,838,856 1,815,620
Leasehold improvements 325,600 325,600
Construction in progress 546,200 446,206
---------- ----------
Total property and equipment 8,131,794 8,008,564
Less accumulated depreciation and amortization 2,322,208 2,215,754
---------- ----------
Property and equipment - net 5,809,586 5,792,810
---------- ----------
DEPOSITS -- 1,500
---------- ----------
TOTAL $6,489,990 $6,211,872
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable under line of credit from
related party $1,460,000 $1,460,000
Accounts payable:
Trade 303,306 110,240
Related party 34,208 --
Income taxes payable -- 117,684
Accrued liabilities 99,750 44,257
Advance deposits 357,896 166,842
---------- ----------
Total current liabilities 2,255,160 1,899,023
DEFERRED INCOME TAXES 193,076 193,076
---------- ----------
Total liabilities 2,448,236 2,092,099
---------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock, $5 par value - authorized
100,000 shares: none issued
Common stock, $.01 par value - authorized
2,000,000 shares: 718,373 shares issued 7,184 7,184
Additional paid-in capital 656,426 656,426
Retained earnings 3,456,756 3,534,075
Less common stock in treasury - at cost,
23,896 shares (78,612) (77,912)
---------- ----------
Total shareholders' equity 4,041,754 4,119,773
---------- ----------
TOTAL $6,489,990 $6,211,872
========== ==========
See notes to unaudited condensed consolidated financial statements
Page 2 of 12
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended
June 30
--------------------------
1999 1998
--------- ---------
REVENUES:
Sales of merchandise $ 355,823 $ 329,674
Room, cabin and trailer space rentals 332,358 321,550
Other rentals and income 47,741 41,110
Interest 1,443 81
--------- ---------
Total revenues 737,365 692,415
--------- ---------
COSTS AND EXPENSES:
Cost of merchandise 216,049 185,332
Operating 419,254 463,097
General and administrative 30,746 19,890
General and administrative - related party 28,881 32,214
Net loss on asset disposals 2,050 7,210
Depreciation and amortization 106,830 82,283
Interest - related party 20,206 22,778
--------- ---------
Total costs and expenses 824,016 812,804
--------- ---------
Income (loss) before income taxes (86,651) (120,389)
Provision (benefit) for income taxes (9,332) (38,000)
--------- ---------
NET INCOME (LOSS) $ (77,319) $ (82,389)
========= =========
NET INCOME (LOSS) PER COMMON SHARE $ (0.11) $ (0.12)
========= =========
See notes to unaudited condensed consolidated financial statements
Page 3 of 12
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended June 30,
---------------------------
1999 1998
--------- ---------
OPERATING ACTIVITIES:
Net loss $ (77,319) $ (82,389)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 106,830 82,283
Depreciation capitalized to construction 4,584
Net loss (gain) on asset disposals 2,050 (7,210)
Changes in assets and liabilities:
Accounts receivable 8,709 13,750
Accounts receivable from related party -- 82,800
Merchandise inventories (131,219) (106,777)
Income tax receivable (22,500) (38,000)
Prepaid expenses and other (8,239) (17,519)
Accounts payable - trade 193,066 209,439
Accounts payable - related party 34,208 16,279
Income taxes payable (117,684) --
Accrued liabilities 55,493 54,351
Advance deposits 191,054 199,021
--------- ---------
Net cash provided by operating activities 239,033 406,028
--------- ---------
INVESTING ACTIVITIES:
Purchases of property and equipment (148,890) (187,550)
Proceeds from sale of property and equipment 18,650 7,210
--------- ---------
Net cash used in investing activities (130,240) (180,340)
--------- ---------
FINANCING ACTIVITIES:
Common stock purchased for treasury (700) --
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 108,093 225,688
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 296,291 212,593
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 404,384 $ 438,281
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid for interest $ 30,030 $ 24,794
========= =========
See notes to unaudited condensed consolidated financial statements
Page 4 of 12
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Month Periods Ended June 30, 1999 and 1998
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and notes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments and reclassifications considered necessary for a
fair and comparable presentation have been made and are of a normal recurring
nature. Operating results for the three months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
March 31, 2000. The enclosed financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended March 31, 1999.
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
International Leisure Hosts, Ltd. (the "Company") operates in one business
segment, the ownership and operation of Flagg Ranch Resort, a full-service
resort motel and trailer park located in the John D. Rockefeller Jr. Memorial
Parkway, approximately four miles north of Grand Teton National Park and two
miles south of the southern entrance to Yellowstone National Park.
SIGNIFICANT ACCOUNTING POLICIES are as follows:
a. MERCHANDISE INVENTORIES are stated at the lower of aggregate cost
(first-in, first-out basis) or market.
b. PROPERTY AND EQUIPMENT are stated at cost. Depreciation is computed by
straight-line and accelerated methods over the estimated useful lives,
which range from 5 to 40 years, for such assets. Leasehold
improvements are amortized using the straight-line method over the
lesser of the estimated useful life of the related asset or the term
of the lease.
The Company reviews the carrying values of its long-lived assets and
identifiable intangibles for possible impairment whenever events or
changes in circumstances indicate that the carrying amount of assets
to be held and used may not be recoverable. For assets to be disposed
of, the Company reports long-lived assets and certain identifiable
intangibles at the lower of carrying amount or fair value less cost to
sell.
c. INCOME TAXES - Deferred income taxes have been provided for the
temporary differences between financial statement and income tax
reporting on certain transactions.
d. USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles necessarily
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
Page 5 of 12
<PAGE>
e. NET INCOME (LOSS) PER COMMON SHARE - Net income (loss) per common
share is computed by dividing net income by the weighted average
number of common shares outstanding. The weighted average number of
common shares outstanding was 694,560 and 694,577 shares for the three
month periods ended June 30, 1999 and 1998, respectively.
f. STATEMENTS OF CASH FLOWS - For purposes of the condensed consolidated
statements of cash flows, cash and cash equivalents represent cash in
banks, money market funds, and certificates of deposit with initial
maturities of three months or less.
g. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company has
estimated the fair value of its financial instruments using available
market data. However, considerable judgment is required in
interpreting market data to develop estimates of fair value. The use
of different market assumptions or methodologies may have a material
effect on the estimates of fair values. The carrying values of cash,
receivables, lines of credit, accounts payable, accrued expenses, and
long-term debt approximate fair values due to the short-term
maturities or market rates of interest.
h. NEW ACCOUNTING PRONOUNCEMENT - In June 1998, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, but has delayed the
effective date from fiscal years beginning after June 15, 1999 to June
15, 2000. Management has not completed the analysis of the effects
SFAS No. 133 will have on its financial statements. SFAS No. 133
establishes accounting and reporting standards for derivative
instruments, including certain derivatives embedded in other
contracts, and for hedging activities. It requires that entities
record all derivatives as either assets or liabilities, measured at
fair value.
2. COMMITMENTS AND CONTINGENCIES
The Company receives its operating authorization from the National Park Service
("NPS"). The NPS Contract (the "Contract") which became effective on January 1,
1990, will expire on December 31, 2009. Under the terms of the Contract, prior
to November 30, 2000, the Company is required to move its existing 54-unit
riverside motel from its current location to the high ground above the river, to
provide for new employee housing and make certain other improvements. The
Company has chosen to meet these requirements by moving the riverside motel and
converting it into employee housing, plus building additional employee support
facilities, which began in summer 1998, with expected completion in summer 2000.
The remaining cost of this relocation is estimated to be between $1,100,000 and
$1,400,000 depending on the number of employee housing units and the extent of
additional improvements required by the NPS. If the Company builds new lodging
units to replace the 54-unit riverside motel, the additional cost to build these
units is estimated to be between $1,000,000 and $1,200,000. This would result in
a combined total cost of relocation and new construction of between $2,100,000
and $2,600,000. The Company has not made a decision at this time regarding
replacing the riverside motel with new lodging units.
Page 6 of 12
<PAGE>
The Contract fee to the NPS is calculated at 2% of gross receipts (as defined),
subject to review and possible adjustment every five years. For the three months
ended June 30, 1999 and 1998, this fee amounted to $14,350 and $13,000,
respectively.
Flagg Ranch faces competition from hotels, camping areas and trailer facilities
in Yellowstone and Grand Teton National Parks, as well as from a large number of
hotels and motels in Wyoming, Montana and Idaho, offering some facilities which
are similar to those offered by Flagg Ranch. In addition, the business of Flagg
Ranch is susceptible to weather conditions and unfavorable trends in the economy
as a whole. Business could be significantly affected depending upon actions
which might be taken by the NPS if cutbacks are made to their budget. If the NPS
decides to close Yellowstone National Park for the winter months, then Flagg
Ranch would have to discontinue its winter operations. NPS budget cutbacks could
also negatively impact the length of the summer season and the number of
visitors to the Parks and have a corresponding negative impact on Flagg Ranch
revenues.
On May 20, 1997, the Fund for Animals, Biodiversity Legal Foundation et. al.
filed a lawsuit against the NPS challenging the action of the NPS regarding
winter use of Yellowstone and Grand Teton National Parks. The plaintiffs have
asked the Federal Court to stop winter activities, primarily snowmobiling and
related snow grooming, until environmental impacts are documented. A settlement
agreement was reached that requires the NPS to prepare an environmental impact
statement ("EIS") over the next three years, during which time period the Parks
will continue activities under the existing winter visitor-use plan. If the NPS
is required to suspend or terminate winter activities in Yellowstone National
Park, Flagg Ranch would have to suspend or discontinue its winter operations.
3. TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTIES
General and administrative expenses for the three months ended June 30, 1999 and
1998 include management fees and administrative expenses paid to related parties
of approximately $29,000 and $32,000, respectively. Related parties during the
three months ended June 30, 1999 and 1998 refer to the Company's majority owner,
Robert Walker, or his affiliated companies.
During October 1998, the Company incurred borrowings under a line of credit from
a related party (see note 4 below). Interest paid pursuant to these borrowings
for the three months ended June 30, 1999 totaled $30,030.
4. NOTE PAYABLE UNDER LINE OF CREDIT
During October 1998, the Company entered into a line of credit agreement
("Agreement") with an affiliated company expiring September 30, 1999, which
provides for secured borrowings of up to $1,500,000 at an interest rate of prime
plus .5 percent. Borrowings under the Agreement are collateralized by the assets
and improvements of Flagg Ranch. The Company has borrowed $1,460,000 on this
line of credit as of June 30, 1999. The terms of the Agreement contain, among
other provisions, requirements for maintaining minimum cash flows (as defined in
the Agreement) and places limitations on the Company's ability to make loans. As
of June 30, 1999 the Company was not in compliance with the minimum cash flow
requirement.
Page 7 of 12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The statements contained in this Report regarding management's anticipation of
the Company's facility completion schedules, quality of facilities, fulfillment
of National Park Service requirements, consumer response to marketing efforts,
ability to offset inflation and adequacy of financing, constitute "forward
looking" statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Management's anticipation is based upon assumptions
regarding levels of competition, acceptance of facilities by consumers,
favorable weather conditions, ability to complete facility construction, the
market in which the Company operates, the stability of the economy and stability
of the regulatory environment. Any of these assumptions could prove inaccurate,
and therefore there can be no assurance that the forward-looking information
will prove to be accurate.
The Company's net loss for the first quarter ended June 30, 1999 was $77,000
($.11 per share). This compares to a net loss of $82,000 ($.12 per share) for
the quarter ended June 30, 1998. The $5,000 decrease in loss was due primarily
to reductions in operating costs. Changes to the Company's revenues and expenses
for the quarters ended June 30, 1999 and June 30, 1998 are summarized below. All
references to years represent quarters ending June 30 of the stated year.
Flagg Ranch, the principal business of the Company, is operated as a seasonal
resort. The two seasons coincide with the opening and closing dates of
Yellowstone and Grand Teton National Parks. The summer season runs from
approximately May 15 through October 15 and the winter season runs from late
December through mid-March. Therefore, the first quarter ended June 30, 1999
consists of only forty-five days of operations.
REVENUES
Total revenues for 1999 increased by $52,000 or 8% from 1998. Of this increase,
$2,000 was from motel and cabin rentals, $9,000 from RV park rentals, $14,000
from float trip revenue, $10,000 from horse rental revenue, $7,000 in gasoline
sales, $9,000 in gift shop sales and $15,000 in grocery store sales. Decreases
of $5,000 from food services and $9,000 in miscellaneous income offset the above
increases. The primary reason for the increases in the various retail areas is
due to the greater number of guests staying in the RV park as well as an
associated increase in per capita spending by the Company's guests. The decrease
in food services income is attributed to a greater percentage of our work force
not participating in the employee meal program.
EXPENSES
The ratio of cost of merchandise sold to sales of merchandise was 61% and 56%,
respectively, in 1999 and 1998. Operating expenses decreased by $44,000 or 10%
in 1999 as compared to 1998. The ratio of operating expenses to total revenue
decreased to 57% in 1999 from 68% in 1998. The primary decrease in operating
expenses was a $37,000 decrease in operating supplies. Other decreases in
operating expenses included $7,000 in labor costs, $7,000 in utilities, $7,000
in repairs and maintenance, $6,000 in travel and $5,000 in telephone. Increases
in a number of other expenses totaling approximately $25,000 offset these
decreases.
Page 8 of 12
<PAGE>
INFLATION
The Company expects that it will be able to offset increased costs and expenses,
principally labor, caused by inflation, by increasing prices on its services
with minimal effect on operations.
LIQUIDITY AND CAPITAL RESOURCES
During the last fiscal year the Company began a project to relocate the
riverside motel and other buildings located along the Snake river to higher
ground for use as employee dormitories as well as the construction of new
employee RV spaces and other ancillary buildings. During the quarter ended June
30, 1999, the Company incurred costs of approximately $100,000 related to the
above construction projects. In addition the Company has purchased new vehicles
and other construction equipment at a cost of $49,000. As a result, the working
capital decreased to a negative $1,575,000 at June 30, 1999 from a negative
$1,481,000 at March 31, 1999.
The Company may incur additional costs of between $1,100,000 and $1,400,000
prior to November 30, 2000 to relocate employee housing units as required under
the NPS Contract.
The Company intends to fund these improvements through existing cash funds and
cash generated from operations, plus additional borrowings from lenders. Cash
generated from operations was $964,000, $432,000, and $430,000 for the fiscal
years ended 1999, 1998 and 1997, respectively. Cash generated from operations
for the quarters ended June 30, 1999 and 1998 was $239,000 and $406,000,
respectively. The construction funds will have to be obtained from outside
sources to the extent they exceed cash generated from operations. There is no
guarantee that the Company will be able to procure financing on favorable terms.
YEAR 2000 COMPLIANCE
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
Both the Company's accounting software as well as its reservation systems are
already year 2000 compliant. Management has determined that the year 2000 issue
will not pose significant operational problems for its computer systems. As a
result, all costs associated with this conversion are being expensed as
incurred.
In addition, the Company has communicated with others with whom it does
significant business to determine their Year 2000 Compliance readiness and the
extent to which the Company is vulnerable to any third party Year 2000 issues.
However, there can be no guarantee that the systems of other companies on which
the Company's systems rely will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.
Page 9 of 12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
On April 23, 1999, at an annual meeting of the shareholders, Bonnie J.
Walker, William S. Levine, and Victor W. Riches were elected to the
Board of Directors replacing Elizabeth A. Nicoli, F. Ray Evarts, and
Michael P. Perikly.
Bonnie J. Walker has served on numerous boards and committees of various
charitable organizations and since late 1997 has been associated with
the Company in various capacities.
William S. Levine has been the Chairman of Outdoor Systems, Inc., a
national billboard company that is traded on the New York Stock
Exchange. Additional, he has served on numerous boards of directors of
both private and public companies.
Victor W. Riches has served on numerous boards, committees and held
offices of both charitable and non-charitable organizations, including
by way of description: Turf Paradise, Inc., Arizona Center for the
Handicapped, Bethany Ranch Home, YMCA of Metropolitan Phoenix, as well
as many others. Mr. Riches has published numerous articles in a variety
of trade magazines. He currently is a real estate developer in Arizona,
Nevada and California.
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
On May 1, 1999, Robert L. Walker was elected Chief Executive Officer,
Michael P. Perikly was elected President and Thomas J. Kase was elected
Secretary and Treasurer.
Michael Perikly has been associated with the company since September 30,
1997 as Treasurer and Chief Financial Officer as well as a director
until April, 1999. From 1990 to the present he has been Chief Financial
Officer of PNI, Inc., a privately owned investment company. From 1989 to
1994 he was the Chief Financial Officer, Secretary and Treasurer of Turf
Paradise, Inc., an Arizona based, publicly traded company that owns and
operates a thoroughbred horse racing facility conducing pari-mutuel
wagering.
Page 10 of 12
<PAGE>
Thomas Kase, a Certified Public Accountant, has worked both in private
industry as well as in public accounting and is currently associated
with the accounting firm of Hahn, Gaintner & Associates where he has
been working for a number of years.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 1. Financial Statements Page
----
The following financial statements of International
Leisure Hosts, Ltd. are included in Part I, Item 1:
Condensed Consolidated Balance Sheets - June 30, 1999
(Unaudited) and March 31, 1999 2
Condensed Consolidated Statements of Operations -
3 months ended June 30, 1999 and 1998 (Unaudited) 3
Condensed Consolidated Statements of Cash Flows -
3 months ended June 30, 1999 and 1998 (Unaudited) 4
Notes to unaudited condensed consolidated financial
statements 5
3. The following exhibits are incorporated by reference as
indicated:
3.1 By-Laws-Adopted June 22, 1992 - filed with Form 10-K
dated March 31, 1992
3.2 Articles of Incorporation - filed with Form 10-K
dated March 31, 1986, pages 32-41
10.1 United States Department of the Interior National
Park Service Contract - filed with Form 10-Q
dated December 31, 1989
Page 11 of 12
<PAGE>
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed by the undersigned, thereunto duly authorized.
INTERNATIONAL LEISURE HOSTS, LTD.
(REGISTRANT)
DATE: August 10, 1999 BY: Robert L. Walker
---------------- ----------------------------------------
Robert L. Walker
Chairman and Chief Executive Officer
DATE: August 10, 1999 BY: Michael P. Perikly
----------------- ----------------------------------------
Michael P. Perikly
President and Principal Financial Officer
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 404,384
<SECURITIES> 0
<RECEIVABLES> 1,145
<ALLOWANCES> 0
<INVENTORY> 223,700
<CURRENT-ASSETS> 680,404
<PP&E> 8,131,794
<DEPRECIATION> 2,322,208
<TOTAL-ASSETS> 6,489,990
<CURRENT-LIABILITIES> 2,255,160
<BONDS> 0
0
0
<COMMON> 7,184
<OTHER-SE> 4,034,570
<TOTAL-LIABILITY-AND-EQUITY> 6,489,990
<SALES> 355,823
<TOTAL-REVENUES> 737,365
<CGS> 216,049
<TOTAL-COSTS> 824,016
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,206
<INCOME-PRETAX> (86,651)
<INCOME-TAX> (9,332)
<INCOME-CONTINUING> (77,319)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (77,319)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
