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FORM 10-Q
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............. to ............
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Commission file number: 0-3338
REGENT GROUP, INC.
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(Exact name of registrant as specified in its charter)
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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 March 9, 1998 there were 2,091,368 shares of Common Stock, .06 2/3 par
value, outstanding.
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<PAGE>
REGENT GROUP, INC.
INDEX
Page No.
--------
Part I - Financial Information 1
Item 1. Financial Statements
Consolidated Balance Sheets as of
January 31, 1998 (unaudited) and
July 31, 1997 2 - 3
Consolidated Statements of Operations
for the Six and Three Months Ended
January 31, 1998 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows
for the Six Months Ended January 31,
1998 and 1997 (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 1. Legal Proceedings 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, 1997.
The results of operations for the three and six month period ended January
31, 1998, are not necessarily indicative of the results to be expected for the
entire fiscal year or for any other period.
-1-
<PAGE>
REGENT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
January 31, July 31,
1998 1997
---------- ----------
(Unaudited)
Current Assets:
Cash $ 89,481 $ 76,441
Accounts receivable 33,712 --
Prepaid vendor access fee 133,333 --
Prepaid expenses and other current
assets 176,146 407,784
---------- ----------
Total Current Assets 432,672 484,225
---------- ----------
Property, plant and equipment - net 43,151 8,687
Unamortized excess of cost over fair
value of assets acquired 1,638,264 --
Other assets 424,629 169,277
---------- ----------
TOTAL ASSETS $2,538,716 $ 662,189
========== ==========
(Continued)
See notes to consolidated financial statements.
-2-
<PAGE>
REGENT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
January 31, July 31,
1998 1997
----------- -----------
(Unaudited)
Current Liabilities:
Short-term debt $ 1,350,450 $ 131,800
Accounts payable 512,365 --
Accrued expenses 508,107 118,158
Due to officer 225,000 100,000
Expected redemptions of common
stock 150,000 --
----------- -----------
Total Current Liabilities 2,745,922 349,958
----------- -----------
Commitments and Contingent Liabilities
Stockholders' Equity (Deficiency):
Preferred stock, 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 stock, par value $.06-2/3;
authorized 20,000,000 shares; issued
and outstanding 1,824,493 and
1,494,493 shares 121,693 99,682
Additional paid-in capital 8,948,597 8,224,858
Accumulated deficit (9,472,541) (8,207,354)
----------- -----------
Total Stockholders' Equity
(Deficiency) (207,206) 312,231
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 2,538,716 $ 662,189
=========== ===========
See notes to consolidated financial statements.
-3-
<PAGE>
REGENT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
January 31, January 31,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
Revenues:
Sales $ 8,011 $ 1,052,486 $ 4,285 $ 510,816
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of sales 4,102 198,909 2,402 103,652
Selling, general
and
administrative
expenses 1,216,543 1,098,419 746,972 567,451
Interest expense 52,553 85,918 29,709 42,927
----------- ----------- ----------- -----------
1,273,198 1,383,246 779,083 714,030
----------- ----------- ----------- -----------
Net loss before
income tax
provision (1,265,187) (330,760) (774,798) (203,214)
Minority interest
in net loss of
consolidated
subsidiary -- (13,863) -- (25,331)
----------- ----------- ----------- -----------
Net loss before
income tax
provision (1,265,187) (316,897) (774,798) (177,883)
Income tax provision -- -- -- --
----------- ----------- ----------- -----------
Net loss $(1,265,187) $ (316,897) $ (774,798) $ (177,883)
=========== =========== =========== ===========
Net loss per common
share - basic $ (.73) $ (.30) $ (.42) $ (.16)
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 1,734,819 1,062,220 1,824,493 1,126,351
=========== =========== =========== ===========
See notes to consolidated financial statements.
-4-
<PAGE>
REGENT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
January 31,
----------------------------
1998 1997
----------- -----------
Cash flows from operating activities:
Net (loss) $(1,265,187) $ (316,897)
Adjustments to reconcile net (loss) to
net cash from operating activities:
Depreciation and amortization 57,483 202,083
loss on sale of equipment -- 9,459
Minority interest in net income of
consolidated subsidiary -- (13,863)
Unpaid executive compensation 125,000 75,000
Common stock issued in lieu of
payment of expenses 70,750 --
Disposal of fixed assets 3,737 --
Changes in operating assets and
liabilities net of acquisition 1,176,340 78,526
----------- -----------
Net Cash Provided by
Operating Activities 168,123 34,308
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and
equipment (11,498) (140,719)
Acquisition of business assets -
Net of cash (911,197) --
----------- -----------
Net Cash (Used in) Investing
Activities (922,695) (140,719)
----------- -----------
Cash flows from financing activities:
Proceeds from borrowings 785,112 499,443
Repayments of borrowings (17,500) (437,094)
Proceeds from sale of equipment -- 36,138
----------- -----------
Net Cash Provided by
Financing Activities 767,612 98,487
----------- -----------
Foreign currency translation
adjustment -- 3,789
----------- -----------
Net increase (decrease) in cash 13,040 (4,135)
Cash - beginning of period 76,441 15,592
----------- -----------
Cash - end of period $ 89,481 $ 11,457
=========== ===========
(Continued)
See notes to consolidated financial statements
-5-
<PAGE>
REGENT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
Six Months Ended
January 31,
--------------------------
1998 1997
----------- -----------
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable $ (13,987) $ 102,767
(Increase) in inventories -- (61,055)
Decrease in prepaid expenses and sundry
Receivables 274,321 87,407
(Increase) in deferred acquisition costs -- (94,590)
Increase (decrease) in accounts payable 38,759 (76,036)
Increase (decrease) in accrued expenses 845,550 120,936
(Decrease) in deferred revenue (25,000) (15,172)
Increase in customer deposits -- 14,269
Decrease in other assets 56,697 --
----------- -----------
$ 1,176,340 $ 78,526
=========== ===========
Supplementary information:
Cash paid during the year for:
Interest $ 22,844 $ 72,255
=========== ===========
Income taxes $ -- $ --
=========== ===========
Details of Acquisition:
Fair value of assets $ 594,561
Liabilities 1,672,042
-----------
Net Liabilities Assumed $ 1,077,481
===========
Cash paid $ 963,000
Less cash acquired 51,803
-----------
Net Cash Paid for Acquisition $ 911,197
===========
See notes to consolidated financial statements.
-6-
<PAGE>
REGENT GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization
The consolidated balance sheet as of January 31, 1998, the consolidated
statement of operations for the six months ended January 31, 1998 and 1997, and
the consolidated statement of cash flows for the periods then ended have been
prepared by Regent Group, Inc. and Subsidiary (the "Company" or "Regent") 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 January 31, 1997 financial statements have been
reclassified to conform to January 31, 1998 classifications. The information for
July 31, 1997 was derived from audited financial statements.
2. Loss Per Common and Common Equivalent Share
Loss per common and common equivalent share for the three and six months
ended January 31, 1998 and 1997 was computed using the weighted average number
of common shares outstanding during each period. The dilutive effect of
outstanding options, warrants and common stock equivalents for the three and six
months ended January 31, 1998 and 1997 were not considered as their effect was
antidilutive.
3. Recent Developments
a) On September 12, 1997, the Company acquired eighty (80%) percent of
the common stock of United States Lead Testing and Removal Service,
Inc. ("U.S. Lead") for $2 million. U.S. Lead markets and sells
franchises to provide lead testings, hazard assessment, in-place
management, abatement planning and monitoring to owners of commercial
and residential real estate. U.S. Lead has executed an agreement with
HFS Inc. ("HFS") to become their exclusive preferred vendor for lead
testing services for Century 21, ERA and Coldwell Banker. HFS is a
global consumer services company. Through March 3, 1998, the Company
has advanced U.S. Lead $1,113,000 toward the purchase price. The
balance of $887,000 is payable by the Company upon the successful
completion of financing.
b) The Company has entered into an agreement with BSM Inc. ("BSM")
whereby the Company will issue to BSM 500,000 shares of Regent common
stock in exchange for BSM assigning to the Company BSM's rights, title
and interest in a contract to purchase a fifty (50%) percent interest
in a golf course and residential community development in Thomaston,
Georgia (the "Hickory Land"). In October 1997, Upson Ridge LLC
("Upson"), a Georgia limited liability company, was formed to acquire
and complete the development of the Hickory Land. Each of Edenfield
Enterprises Inc. ("Edenfield") and Regent will have a fifty (50%)
percent interest in Upson. Edenfield will convey the land to Upson and
Regent has agreed to arrange for the financing of Upson. There are not
yet any definitive agreements in connection with obtaining financing
for the Hickory Land and there can be no assurance that such financing
will be obtained. In the event that Regent does not obtain financing
for the Hickory Land the acquisition will not be consummated.
-7-
<PAGE>
REGENT GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. Basis of Presentation
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 January 31, 1998. In addition, losses and negative cash flows
from operations have continued throughout the period subsequent to January 31,
1998.
The Company's viability as a going concern is dependent upon its ability to
obtain needed working capital through additional equity and/or debt financing.
Management is actively seeking additional capital to ensure the continuation of
its operations and for various acquisitions. The Company has partially funded
the U.S. Lead acquisition, however, there is no assurance that additional
capital will be obtained to complete the U.S. Lead transaction or the golf
course community development project. This raises substantial doubt about the
ability of the Company to continue as a going concern.
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.
5. Acquisition
On September 12, 1997, the Company acquired eighty (80%) percent of the
common stock of U.S. Lead for $2 million. The Company incurred approximately
$675,000 in expenses in connection with the acquisition. The acquisition has
been accounted for using the purchase method of accounting and, accordingly, the
purchase price was allocated to the assets purchased and the liabilities assumed
based upon their fair values at the date of acquisition. The fair value of the
assets of U.S. Lead acquired was $594,561 and the liabilities assumed totaled
$1,672,042 resulting in goodwill of approximately $1,700,000, which will be
amortized principally over ten (10) years. The operating results of the acquired
business is included in the consolidated statement of operations from the date
of acquisition.
Pro forma unaudited operating information for the six and three months
ended January 31, 1998 and 1997 of Regent and U.S. Lead assuming the business
combination has occurred at the beginning of the respective year in which U.S.
Lead was acquired as well as at the beginning of the immediate preceding year is
as follows:
Six Months Ended
January 31,
--------------------------
1998 1997
---------------------------
Net sales $ 11,228 $ 1,288,212
Net (loss) $(1,296,231) $(1,167,292)
Net (loss) per share $ (.75) $ (1.09)
-8-
<PAGE>
REGENT GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Debt
Short-term debt is as follows:
January 31, July 31,
1998 1997
---------- ----------
Unsecured note, due on demand,
interest at 12% per annum (1) $ 377,500 $ 131,800
Secured note, due March 28, 1998,
Interest at 6.0% per annum (2) 100,000 --
Unsecured note, due September 30,
1998, interest at 12% per annum (3) 200,000 --
Unsecured note, due on demand,
interest at 12% per annum (4) 100,000 --
Unsecured note, due on demand,
non-interest bearing (5) 347,950 --
Unsecured note, due on demand,
interest at 12% per annum (6) 50,000 --
Unsecured note due January 12,
1999, interest at 8% per annum (7) 175,000 --
---------- ----------
$1,350,450 $ 131,800
========== ==========
(1) The unsecured note is payable to Mrs. Barbara Greenfield ("Mrs.
Greenfield"), wife of Mr. Marvin E. Greenfield ("Mr. Greenfield"), the
Company's President and Chief Executive Officer. In connection with this
note, Mrs. Greenfield received 48,125 shares of Regent common stock as
additional consideration.
(2) The note payable to Republic Bank is collateralized by a certificate of
deposit owned by an affiliate of Mrs. Greenfield.
(3) The unsecured note is payable to a shareholder of the Company. In
connection with this note, the unsecured shareholder received 25,000 shares
of Regent common stock as additional consideration.
(4) The unsecured note is payable to BSM, Inc., a major shareholder of Regent.
(5) The unsecured note is payable to certain officers of the Company's U.S.
Lead subsidiary.
(6) The unsecured note is payable to Mrs. Felicia Rubin ("Mrs. Rubin"),
daughter of Mr. Greenfield. In connection with this note Mrs. Rubin
received 6,250 shares of Regent common stock as additional consideration.
(7) The unsecured note is payable to Plymouth Partners, LP.
-9-
<PAGE>
REGENT GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income". This
Statement requires that changes in the amounts of comprehensive income is not
required. This statement is effective for fiscal years beginning after December
15, 1998. The Company expects that the adoption of this statement will not have
any significant impact on the financial statements of the Company.
-10-
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
On February 21, 1997, the Company consummated the sale of its only
operating subsidiary, Krystal Fountain Water Company Limited. The selling price
was approximately $1,600,000 resulting in a gain of approximately $621,000.
Subsequent to the sale, the Company liquidated substantially all of its
liabilities. The Company continues to pursue other investment opportunities. The
Company recently acquired an eighty (80%) percent interest in one business and
entered into a letter of intent for another business.
In September 1997, Regent acquired eighty (80%) percent of the capital
stock of U.S. Lead for a purchase price of $2,000,000 of which $1,113,000 has
been advanced toward the purchase price and the balance of $887,000 is payable
by the Company upon the successful completion of financing.
In November 1997, Regent entered into a letter of intent to acquire a fifty
(50%) percent interest in Upson Ridge LLC, a Georgia limited liability company,
which owns a 410-acre golf course and residential community development in
Thomaston, Georgia known as Hickory Land. In exchange for acquiring an interest
in Hickory Land, Regent will issue 500,000 shares of the Company's common stock
to BSM, a principal stockholder of Regent. As part of the acquisition, Regent
has agreed to arrange the financing for the Hickory Land. There are not yet any
definitive agreements in connection with obtaining financing for the Hickory
Land and there can be no assurance that such financing will be obtained. In the
event Regent does not obtain financing for the Hickory Land, the acquisition
will not be consummated.
The Company's viability as a going concern is dependent upon its ability to
obtain needed working capital through additional equity and/or debt financing.
The Company has borrowed funds from stockholders of the Company to meet
obligations on the U.S. Lead acquisition. Management is actively seeking
additional capital to ensure the continuation of its operations and for the
various acquisitions. The Company has partially funded the U.S. Lead
acquisition, however, there is no assurance that additional capital will be
obtained to complete the U.S. Lead transaction or the golf course community
development project. This raises substantial doubt about the ability of the
Company to continue as a going concern.
Results of Operations
1997 Compared to 1996
On September 27, 1997, Regent acquired eighty (80%) percent of the common
stock of U.S. Lead. The Company currently operates its business through U.S.
Lead. The consolidated financial statements for 1997 include the accounts of the
Company and its eighty (80%) percent owned subsidiary from the date of
acquisition.
The Company previously operated its business through Krystal. The Company
acquired Krystal in October 1993. In November 1995, Krystal acquired
substantially all the net assets of Water Express. Regent's investment in
Krystal was reduced to fifty (50%) percent as a result of the acquisition. On
February 21, 1997, Regent sold its investment in Krystal. The consolidated
financial statements for 1996 include the accounts of the Company and its
subsidiary through the sale date.
-11-
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition and Results
of Operations
Six Months Ended January 31, 1998 vs. Six Months Ended January 31, 1997
Sales
Sales decreased from $1,052,486 for the six months ended January 31, 1997
to $8,011 for the six months ended January 31, 1998. The Company attributes the
decrease primarily to the sale of its only operating subsidiary in February
1997. U.S. Lead, the Company's recent acquisition, commenced operations in
January 1998 and very few sales have been generated.
Cost of Sales
Cost of sales decreased from $198,909 for the six months ended January 31,
1997 to $4,102 for the six months ended January 31, 1998. The Company attributes
the decrease primarily to the reasons described above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased from $1,098,419 for
the six months ended January 31, 1997 to $1,216,543 for the six months ended
January 31, 1998. The Company attributes the increase primarily to increases in
professional fees and consulting fees in pursuing new acquisitions and increases
in marketing expenses to launch the new program for U.S. Lead in January 1998.
Interest Expense
Interest expense decreased from $85,918 for the six months ended January
31, 1997 to $52,553 for the six months ended January 31, 1998. The Company
attributes the decrease to the reduction of debt the Company was able to
liquidate following the sale of its operating subsidiary in February 1997. The
Company has recently incurred debt to finance the investment in U.S. Lead.
Three Months Ended January 31, 1998 vs. Three Months Ended January 31, 1997
Sales
Sales decreased from $510,816 for the three months ended January 31, 1997
to $4,285 for the three months ended January 31, 1998. The Company attributes
the decrease primarily to the sale of its only operating subsidiary in February
1997. U.S. Lead, the Company's recent acquisition, commenced operations in
January 1998 and very few sales have been generated.
Cost of Sales
Cost of sales decreased from $103,652 for the three months ended January
31, 1997 to $2,402 for the three months ended January 31, 1998. The Company
attributes the decrease primarily to the reasons described above.
-12-
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition and Results
of Operations
Three Months Ended January 31, 1998 vs. Three Months Ended January 31, 1997
(Continued)
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased from $567,451 for
the three months ended January 31, 1997 to $746,972 for the three months ended
January 31, 1998. The Company attributes the increase primarily to increases in
professional fees and consulting fees in pursuing new acquisitions and increases
in marketing expenses to launch the new program for U.S. Lead in January 1998.
Interest Expense
Interest expense decreased from $42,927 for the three months ended January
31, 1997 to $29,709 for the three months ended January 31, 1998. The Company
attributes the decrease to the reduction of debt the Company was able to
liquidate following the sale of its operating subsidiary in February 1997. The
Company has recently incurred debt to finance the investment in U.S. Lead.
This report contains forward-looking statements that involve substantial
risks and uncertainties. The Company's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed under the
"Business", "Management's Discussion and Analysis of Financial Condition and
Results of Operations", and "Risks and Uncertainties" captions in the Company's
Form 10-K for the year ended July 31, 1997.
-13-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 27.1 Financial Data Schedule.
(b) On December 8, 1997 the Registrant filed a Current Report on
Form 8-K/A describing the acquisition of eighty (80%) percent
of the common stock of United States Lead Testing and Removal
Service Inc. ("U.S. Lead") including the consolidated
financial statements as of December 31, 1996 and the ProForma
Balance Sheet as of July 31, 1997 and ProForma Statement
of Operations for the year ended July 31, 1997. The Registrant
paid $2 million in connection with the acquisition. U.S. Lead
markets and sells franchises to provide lead testings, hazard
assessment, in-place management, abatement planning and
monitoring to owners of commercial and residential real estate.
-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.
REGENT GROUP, INC.
----------------------------------------
(Registrant)
Date: March 13, 1998 By: /s/ Marvin E. Greenfield
----------------------------------------
Marvin E. 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 REGENT GROUP
INC. AND SUBSIDIARY FINANCIAL STATEMENTS AT JANUARY 31, 1998 AND THE SIX 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-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 89,481
<SECURITIES> 0
<RECEIVABLES> 33,712
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 432,672
<PP&E> 116,826
<DEPRECIATION> 73,675
<TOTAL-ASSETS> 2,538,716
<CURRENT-LIABILITIES> 2,745,922
<BONDS> 0
0
195,045
<COMMON> 121,693
<OTHER-SE> (523,944)
<TOTAL-LIABILITY-AND-EQUITY> 2,538,716
<SALES> 8,011
<TOTAL-REVENUES> 8,011
<CGS> 4,102
<TOTAL-COSTS> 1,220,645
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,533
<INCOME-PRETAX> (1,265,187)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,265,187)
<EPS-PRIMARY> (.73)
<EPS-DILUTED> 0
</TABLE>
