================================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1995
OR
[ ] 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: 0-3338
NMC CORP.
(Exact name of registrant as specified in its charter)
Delaware 22-1558317
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 Madison Avenue, Suite 701
New York, New York 10022
(Address of principal executive offices)
(Zip Code)
212-207-4560
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
At December 1, 1995 there were 936,677 shares of Common Stock, $.06 2/3 par
value, outstanding.
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<PAGE>
NMC CORP.
INDEX
Page No.
--------
Part I - Financial Information ...................................... 1
Item 1. Financial Statements
Consolidated Balance Sheets as of
October 31, 1995 (unaudited) and
July 31, 1995 ..................................... 2 - 3
Consolidated Statements of Operations
for the Three Months Ended October 31,
1995 and 1994 (unaudited) ......................... 4
Consolidated Statements of Cash Flows
for the Three Months Ended October 31,
1995 and 1994 (unaudited) ......................... 5 - 6
Notes to Consolidated Financial
Statements (unaudited) ............................ 7 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ........................................ 11 - 13
Part II - Other Information
Item 4. Submission of Matters to a Vote of
Security Holders .................................. 14
Item 6. Exhibits and Reports on Form 8-K .................. 14
Signatures .......................................................... 15
<PAGE>
PART I. Financial Information
Item 1. Financial Statements
--------------------
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission. It is suggested that the following
consolidated financial statements be read in conjunction with the year-end
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended July 31, 1995.
The results of operations for the three month period ended October 31,
1995, are not necessarily indicative of the results to be expected for the
entire fiscal year or for any other period.
-1-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
October 31, July 31,
1995 1995
----------- --------
(Unaudited)
Current Assets:
Cash ......................................... $ 16,479 $ 14,043
Accounts receivable .......................... 137,633 152,196
Inventories .................................. 12,233 5,935
Prepaid expenses and sundry
receivables ................................ 8,705 39,250
---------- ----------
Total Current Assets .................... 175,050 211,424
---------- ----------
Property, plant and equipment - net ............ 151,174 147,696
Unamortized excess of cost over fair
value of assets acquired ...................... 842,157 853,850
Deferred acquisition costs ..................... 451,709 298,014
---------- ----------
TOTAL ASSETS ........................... $1,620,090 $1,510,984
========== ==========
(Continued)
See notes to consolidated financial statements.
-2-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
October 31, July 31,
1995 1995
----------- ----------
(Unaudited)
Current Liabilities:
Short-term debt ................................. $ 674,465 $ 526,324
Current portion of long-term debt ............... 6,032 6,047
Accounts payable ................................ 123,882 112,981
Accrued expenses ................................ 178,670 164,548
Deferred revenue ................................ 69,371 58,896
Due to officer .................................. 50,000 50,000
Income taxes payable ............................ 2,220 3,030
---------- ----------
Total Current Liabilities .................. 1,104,640 921,826
---------- ----------
Long-term debt .................................... 5,759 6,047
Deferred revenues ................................. 15,072 13,166
---------- ----------
Total Liabilities .......................... 1,125,471 941,039
---------- ----------
Stockholders' Equity:
Capital stock:
Preferred par value $1; authorized
500,000 shares (involuntary liquidation
value $777,912)
Convertible Series B, at redemption
value; issued and outstanding 65,141
shares ................................... 130,282 130,282
Cumulative Series C, par value $1,
issued and outstanding 64,763 shares....... 64,763 64,763
Common, par value $.06-2/3; authorized
20,000,000 shares; issued and outstanding
936,677 and 936,677 shares ................... 62,476 62,476
Additional paid-in capital ...................... 7,318,376 7,318,376
Deficit ......................................... (7,093,660) (7,029,559)
Foreign currency translation adjustment ......... 12,382 23,607
---------- ----------
Total Stockholders' Equity ................. 494,619 569,945
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY .................................. $1,620,090 $1,510,984
========== ==========
See notes to consolidated financial statements.
-3-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
October 31,
-------------------------
1995 1994
-------- --------
Revenues ....................................... $198,964 $135,639
-------- --------
Costs and Expenses:
Cost of sales ................................ 54,026 37,203
Selling, general and administrative
expenses ................................... 199,440 211,399
Interest expense ............................. 9,599 2,860
Other (income) ............................... -- (23,757)
-------- --------
263,065 227,705
-------- --------
(Loss) before income tax
provision .................................... (64,101) (92,066)
Income tax provision ........................... -- --
-------- --------
Net (loss) ..................................... $(64,101) $(92,066)
======== ========
(Loss) per common share ........................ $(.07) $(.21)
===== =====
Weighted average number of common
shares outstanding ............................ 936,677 436,677
======== ========
See notes to consolidated financial statements.
-4-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
October 31,
-----------------------
1995 1994
---------- ---------
Cash flows from operating activities:
Net (loss) ....................................... $ (64,101) $(92,066)
Adjustments to reconcile net (loss) to
net cash from operating activities:
Depreciation and amortization ................... 25,325 26,813
Changes in operating assets and liabilities ..... (78,291) 61,890
--------- --------
Net Cash (Used in) Operating Activities ...... (117,067) (3,363)
--------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment .......... (17,110) (12,486)
--------- --------
Cash flows from financing activities:
Proceeds from borrowings ........................... 155,000 50,000
Repayments of borrowings ........................... (7,162) (9,651)
--------- --------
Net cash provided by financing
activities .................................. 147,838 40,349
--------- --------
Foreign currency translation adjustment .............. (11,225) 5,349
--------- --------
Net increase in cash and cash equivalents ............ 2,436 29,849
Cash and Cash Equivalents--beginning of
period ............................................. 14,043 911
--------- --------
Cash and Cash Equivalents--end of period ............ $ 16,479 $ 30,760
========= ========
(Continued)
See notes to consolidated financial statements
-5-
<PAGE>
NMC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
Three Months Ended
October 31,
-------------------------
1995 1994
-------- ----------
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ..... $ 14,563 $ (425)
(Increase) in inventories ...................... (6,298) (15,760)
(Decrease) in prepaid expenses and sundry
receivables ................................... 30,545 5,356
(Increase) in deferred acquisition costs ....... (153,695) --
(Increase) in other assets ..................... -- (416)
Increase in accounts payable ................... 10,901 22,218
Increase (decrease) in accrued expenses ........ 14,122 (6,107)
(Decrease) in income taxes payable ............. (810) (729)
Increase in due to officer ..................... -- 37,500
Increase in deferred revenue ................... 12,381 20,253
--------- -------
$ (78,291) $61,890
========= =======
Supplemental Information:
Cash paid during the year for:
Interest .................................. $ 347 $ 333
========= =======
Income taxes .............................. $ -- $ --
========= =======
See notes to consolidated financial statements.
-6-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The consolidated balance sheet as of October 31, 1995, the consolidated
statement of operations for the three months ended October 31, 1995 and 1994,
and the statement of cash flows for the periods then ended have been prepared by
NMC Corp. and Subsidiary ("The Company" or "NMC") and are unaudited. In the
opinion of management, all adjustments (consisting solely of normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows for all periods presented have been made. Certain
items in the October 31, 1994 financial statements have been reclassified to
conform to October 31, 1995 classifications. The information for July 31, 1995
was derived from audited financial statements.
2. The Board of Directors authorized a 1-10 reverse stock split effective
as of April 17, 1995. All share and per share data for prior periods presented
have been restated to reflect the reverse stock split.
3. The accompanying consolidated financial statements have been prepared on
a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
The Company has experienced recurring losses and negative cash flows from
operations through October 31, 1995. In addition, losses and negative cash flows
from operations have continued throughout the period subsequent to October 31,
1995.
The Company's viability as a going concern is dependent upon its ability to
obtain additional financing. The Company has no operations other than those
relating to Krystal's business which will provide the Company's only source of
cash flow for the foreseeable future. Management estimates that this cash flow
should be sufficient to support Krystal's operations during the next twelve (12)
months. Additional funds will be required to pay for the cost of NMC's
operations.
On November 1, 1995, Krystal acquired substantially all the net assets of
Water Express ("Water Express"), a water distribution company in the United
Kingdom in exchange for the issuance of 363,155 shares of the common stock of
Krystal, approximately $180,000 in cash, and a promissory note of approximately
$122,000. In order to make the cash payment, Krystal obtained bridge financing
in the amount of $125,000. The cash advances of approximately $55,000 that were
previously made to Water Express were also applied as part of the downpayment.
As of this date the Company's ownership equity in Krystal was reduced to fifty
(50%) percent. (See Note 7 of Notes to Consolidated Financial Statements for
further information).
Krystal also executed a Letter of Intent to acquire various assets of a
second water distribution company located in the United Kingdom. The acquisition
is subject to the consummation of equity financing by the Company or Krystal.
The Company believes the cash flows from these acquisitions, one of which
is already consummated, will be sufficient to fund operations in the future
assuming the cash flows from the Krystal operations can be used to pay for the
cost of NMC's operations. The Company must receive approval from its fifty (50%)
percent equity partner of Krystal in order to permit the funds to be used by
NMC.
-7-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On December 8, 1995 Krystal entered into a loan agreement with a foreign
lender obtaining a line-of-credit up to $750,000. The loan is guaranteed by the
Company and is secured by an English debenture (Security Agreement) from Krystal
which covers all of Krystal's assets in favor of the lender. The lien on this
collateral is superior to prior liens given to other lenders. On December 13,
1995, Krystal borrowed $285,000 against the line-of-credit. The bridge loan of
$125,000 was repaid in full and the balance was used for corporate purposes. The
loan is due on September 30, 1996 or sooner if the Company or its subsidiary is
able to secure financing in an amount not less than the outstanding amount due
to the lender. (See Note 8 of Notes to Consolidated Financial Statements for
further consideration given to the lender).
The Company is currently negotiating a proposed public equity financing
with an investment banking firm but as of the date hereof, no letter of intent
or other document setting forth the terms of the transaction has been executed.
Accordingly, no assurance can be given that the financing will ever be
consummated. If the Company or Krystal is unable to secure additional funds to
repay the line-of-credit, the operations of Krystal will not generate sufficient
funds to do so. If the lender is not repaid, the Company will lose its only
operations that generate revenue.
On March 15, 1995, the Company entered into a loan agreement in the amount
of $200,000 with a third party. The loan is secured by the common stock of
Krystal owned by the Company but second to the lender providing the
line-of-credit. The loan is due October 1, 1996.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
4. (Loss) per common share is computed using the weighted average number of
common shares outstanding during the year. The convertible preferred stock and
exercise of warrants are not considered common share equivalents for purposes of
the computation of earnings per share in each period presented because their
effect is antidilutive.
-8-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
5. Property, plant and equipment consists of the following:
October 31, July 31,
1995 1995
---------- --------
Machinery and equipment $268,897 $251,787
Leasehold improvements 6,197 6,197
Master tapes 20,001 20,001
-------- --------
295,095 277,985
Less accumulated depreciation and
amortization 143,921 130,289
-------- --------
Net Property, Plant and Equipment $151,174 $147,696
======== ========
6. DEBT
Short-term debt consists of the following:
October 31, July 31,
1995 1995
----------- --------
7.50% Note payable to Republic Bank due
March 20, 1996, collateralized by a
certificate of deposit of an affiliate of
Barbara Greenfield, wife of the Company's
President and Chief Executive Officer ...... $ 100,000 $100,000
10% Note payable to a third party, due
October 1, 1996, collateralized by all of
the common stock of Krystal owned by the
Company subordinated to the line-of-credit.. 200,000 200,000
5% Note payable to Barbara Greenfield,
due on demand, collateralized by all
of the common stock of Krystal owned by
the Company. No demand may be made while
line-of-credit is outstanding. The security
interest is subordinate to the third party
lender and the line-of-credit. An
affiliate of Mrs. Greenfield assigned
its advance to NMC to her in the amount
of $118,596 as of August 1, 1994. .......... 228,546 199,672
Various loans payable, due on demand
interest at 5% ............................. 145,919 26,652
-------- --------
$674,465 $526,324
======== ========
Long-term debt consists of the following:
Note payable to a financial institution,
due July 1997, interest at 9%,
collateralized by transportation
equipment .................................. $ 11,791 $ 12,094
Less current maturities ..................... 6,032 6,047
-------- --------
Long-Term Debt ........................ $ 5,759 $ 6,047
======== ========
-9-
<PAGE>
NMC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. On November 1, 1995, Krystal acquired substantially all of the net
assets of Water Express, a company located in London, England. Water Express is
a company engaged in the sale of bottled water in five gallon containers to be
utilized in conjunction with water coolers, dispensing both hot and cold water.
It currently rents over 1,600 coolers to commercial establishments in the
London metropolitan market place. (See Note 3 of Notes to Consolidated Financial
Statements for further terms regarding the acquisition). The acquisition has
been accounted for using the purchase method of accounting, and, accordingly the
purchase price will be allocated to the assets purchased and the liabilities
assumed based upon the fair values at the date of acquisition. The operating
results of the acquired business will be included in the consolidated statement
of operations from the date of acquisition.
8. As additional consideration for the $750,000 line-of-credit, the Company
has issued 9.9% of the outstanding, fully diluted shares of the Company in the
form of a warrant exercisable at $.001 per share, with registration rights, in
the event an amount in excess of $500,000 is utilized. In the event only one
third (1/3) of the line-of-credit is utilized then there shall be a reduction in
the amount of the shares included in the aforementioned warrant from 9.9% to
5.0%. In the event only two thirds (2/3) of the line-of-credit is utilized then
there shall be a reduction in the amount of shares included in said warrant from
9.9% to 7.5%.
-10-
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
Results of Operations
- - ---------------------
Three Months October 31, 1995 vs. Three Months October 31, 1994
- - ---------------------------------------------------------------
The results of Krystal are included in the consolidated financial
statements of the Company from the date of acquisition. The Company has no
operations other than those relating to Krystal's business.
On November 1, 1995, Krystal acquired substantially all the net assets of
Water Express ("Water Express"), a water distribution company in the United
Kingdom. (See Liquidity and Capital Resources below for terms of the
acquisition). Water Express is a company engaged in the sale of bottled water in
five gallon containers to be utilized in conjunction with water coolers,
dispensing both hot and cold water. It currently rents over 1,600 coolers to
commercial establishments in the metropolitan London market place. The operating
results of Water Express will be included in the consolidated statement of
operations from the date of acquisition. Krystal also executed a Letter of
Intent to acquire various assets of a second water distribution company located
in the United Kingdom. This acquisition is subject to the consummation of equity
financing by the Company or Krystal, of which there can be no assurance.
Revenues from sales increased 46.7% to $198,964 during the three months
ended October 31, 1995 from $135,639 for the three months ended October 31,
1994. The increase is primarily due to an increase in the number of customers
and more demand for the Company's product.
Cost of sales increased 45.2% to $54,026 during the three months ended
October 31, 1995 from $37,203 during the three months ended October 31, 1994 due
to the reasons explained above.
Selling, general and administrative expenses decreased .06% to $199,440 for
the three months ended October 31, 1995 from $211,399 for the three months ended
October 31, 1994 primarily due to a decrease in officer salaries.
Interest expense increased 235.6% to $9,599 for the three months ended
October 31, 1995 from $2,860 for the three months ended October 31, 1994. The
increase is due to additional loans made to the Company to fund its current
operations.
Other income decreased 100% to $-0- for the three months ended October 31,
1995 from $23,757 for the three months ended October 31, 1994 due to a
settlement received by Krystal for the infringement of its territorial rights by
a competitor during the three months ended October 31, 1994. This event was a
non-recurring transaction.
The net loss of $64,101 decreased by approximately $28,000 for the three
months ended October 31, 1995 compared to the three months ended October 31,
1994. The Company attributes the decrease primarily to the improvement in the
operations of Krystal. However, the operations of Krystal have not been able to
offset the overhead of the Company at its corporate offices.
-11-
<PAGE>
Liquidity and Capital Resources
- - -------------------------------
NMC currently has no operations other than those relating to Krystal's
business which will, therefore, provide the Company's only source of cash flow
for the foreseeable future. Management estimates that this cash flow should be
sufficient to support Krystal's operations during the next 12 months. This
estimate is based on existing water dispenser unit lease commitments and
projected water sales which, in turn, are based on historical per unit water
usage. Additional funds will be required to pay for the cost of NMC's
operations.
Krystal acquired substantially all the net assets of Water Express in
exchange for the issuance of 363,155 shares of the common stock of Krystal,
approximately $180,000 in cash, and a promissory note of approximately $122,000.
In order to make the cash payment, Krystal obtained bridge financing in the
amount of $125,000. The cash advances of $55,000 made previously to Water
Express was also applied as part of the downpayment. As of this date the
Company's ownership equity in Krystal was reduced to fifty (50%) percent.
On April 19, 1995, Krystal executed a Letter of Intent with Hyrdopure Group
Limited ("Hydropure") pursuant to which it set forth the terms under which it
would acquire various assets of Hydropure. Hydropure is a distributor of
natural spring mineral water for use with water coolers for commercial
establishments located within the Greater London area. It currently services
2,200 customers. If the acquisition is consummated, Hydropure's operations will
be combined with those of Krystal.
Krystal will pay Hydropure $2,640,000 and issue 375,000 shares of the
Company's common stock. Krystal will pay additional consideration which shall be
calculated by reference to the excess of the number of coolers at December 31,
1995 over 2,200 coolers. Such consideration shall be at the rate of $720 for
each such additional cooler.
The Agreement is subject to, among other things, the consummation of the
equity financing currently being negotiated between the Company and an
investment banking firm. The acquisition is anticipated to be completed no later
than March 31, 1996, if at all.
On December 8, 1995 Krystal entered into a loan agreement with a foreign
lender obtaining a line-of-credit up to $750,000. The loan is guaranteed by the
Company and is secured by an English debenture (Security Agreement) from Krystal
which covers all of Krystal's assets in favor of the lender. This collateral is
superior to previous collateral of Krystal given to other lenders. On December
13, 1995, Krystal borrowed $285,000 against the line-of-credit. The bridge loan
of $125,000 was repaid in full and the balance was used for corporate purposes.
The loan is due on September 30, 1996 or sooner if the Company or its subsidiary
is able to secure financing in an amount not less than the outstanding amount
due to the lender.
On March 15, 1995, the Company entered into a secured loan agreement in the
amount of $200,000 with a third party, secured by all of the common stock of
Krystal owned by the Company. The loan is due October 1, 1996 with interest
accruing at ten (10%) percent per year. In consideration for the loan, the
Company issued to the lender a warrant to purchase up to 100,000 shares of
Common Stock at $1.00 per share. The loan has enabled the Company to finance its
operations through the end of the previous fiscal year.
-12-
<PAGE>
Liquidity and Capital Resources (Continued)
- - -------------------------------------------
The Company has experienced severe cash flow deficiencies from operations.
To alleviate these problems, the Company has received advances from certain
lenders including Barbara Greenfield, the wife of the Company's President and
Chief Executive Officer, Treasurer and Director. An affiliate of Mrs. Greenfield
has also collateralized a $100,000 loan made by a bank to the Company with a
certificate of deposit. The Company has given a security interest in the shares
of Krystal owned by the Company as collateral to Mrs. Greenfield, which is
second to the unaffiliated third party.
The Company believes the cash flows from the Water Express and Hydropure
acquisitions will be sufficient to fund operations in the future assuming the
cash flows from its Krystal operations can be used to pay for the cost of NMC's
operations. The Company must receive approval from its fifty (50%) percent
equity partner of Krystal in order to permit the funds to be used by NMC.
-13-
<PAGE>
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits.
None.
(b) There were no Current Reports on Form 8-K filed by
the registrant during the quarter ended October 31, 1995.
-14-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
NMC CORP.
--------------------------------------------
(Registrant)
Date: December 14, 1995 By: /s/ MARVIN GREENFIELD
-----------------------------------------
Marvin Greenfield, President and
Treasurer Duly Authorized Officer of the
Registrant (Principal Financial Officer)
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NMC CORP.
AND SUBSIDIARY FINANCIAL STATEMENTS AT OCTOBER 31, 1995 AND THE THREE MONTHS
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> OCT-31-1995
<CASH> 16,749
<SECURITIES> 0
<RECEIVABLES> 137,633
<ALLOWANCES> 0
<INVENTORY> 12,233
<CURRENT-ASSETS> 175,050
<PP&E> 295,095
<DEPRECIATION> 143,921
<TOTAL-ASSETS> 1,620,090
<CURRENT-LIABILITIES> 1,104,640
<BONDS> 0
<COMMON> 62,476
0
257,521
<OTHER-SE> 237,098
<TOTAL-LIABILITY-AND-EQUITY> 1,620,090
<SALES> 198,964
<TOTAL-REVENUES> 198,964
<CGS> 54,026
<TOTAL-COSTS> 253,466
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,599
<INCOME-PRETAX> (64,101)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (64,101)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
