<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
COMMISSION FILE NUMBER 0-12346
IRONSTONE GROUP, INC.
(Name of Registrant as specified in its charter)
DELAWARE 95-2829956
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
9620 CHESAPEAKE DRIVE, SUITE 103, SAN DIEGO, CA 92123
(Address of principal executive offices, including zip code)
(619) 292-8777
(Registrant's telephone number, including area code)
9665 CHESAPEAKE DRIVE, SUITE 430, SAN DIEGO, CA 92123
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Registrant (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 [X] No[ ]
As of September 30, 1998, 1,487,870 shares of Common Stock, $0.01 par value,
were outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
TOTAL NUMBER OF PAGES: 12 INDEX TO EXHIBITS AT PAGE: N/A
<PAGE> 2
IRONSTONE GROUP, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed consolidated statements of operations for the three and nine months ended
September 30, 1998 and 1997........................................................................... 3
Condensed consolidated balance sheet at September 30, 1998 ............................................ 5
Condensed consolidated statements of cash flows for the nine months ended
September 30, 1998 and 1997........................................................................... 6
Notes to condensed consolidated financial statements................................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............... 10
SIGNATURES................................................................................................... 12
</TABLE>
2
<PAGE> 3
IRONSTONE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1998 1997
----------- -----------
<S> <C> <C>
Revenues:
Consulting fees $ 54,842 $ 524,302
Interest and other income 5,677 9,784
----------- -----------
Total revenues 60,519 534,086
----------- -----------
Costs and expenses:
Salaries and wages, payroll taxes and benefits 110,487 490,396
Depreciation 12,000 20,940
Amortization 26,432 36,298
Bad debt expense 110,849 40,178
Rent expense 44,556 63,594
Professional fees 15,476 49,681
Advertising and promotion -- 3,064
Office expense 1,825 22,274
Referral and split fees 16,177 19,993
Travel and entertainment 1,657 10,536
Research expense 1,081 21,941
Communications 2,415 7,600
Interest expense 3,336 5,878
Other operating expenses 67,388 26,543
Restructuring charges (98,723) --
----------- -----------
Total costs and expenses 314,956 818,916
----------- -----------
Loss before income taxes and minority interest (254,437) (284,830)
Income tax provision -- (1,021)
Minority interest -- 978
----------- -----------
Net loss $ (254,437) $ (284,873)
=========== ===========
Net loss per share - basic and diluted $ (0.17) $ (0.19)
=========== ===========
Average shares outstanding - basic 1,487,870 1,487,870
Average shares outstanding - diluted 1,487,870 1,487,870
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
IRONSTONE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
----------- -----------
<S> <C> <C>
Revenues:
Consulting fees $ 512,688 $ 1,866,107
Interest and other income 25,193 32,961
----------- -----------
Total revenues 537,881 1,899,068
----------- -----------
Costs and expenses:
Salaries and wages, payroll taxes and benefits 543,495 1,399,031
Depreciation 36,192 62,609
Amortization 87,563 92,560
Bad debt expense 392,051 45,721
Rent expense 184,188 245,839
Professional fees 170,603 163,472
Advertising and promotion 2,272 21,471
Office expense 13,090 73,589
Referral and split fees 24,747 71,116
Travel and entertainment 5,435 24,949
Research expense 11,022 57,144
Communications 10,976 26,563
Interest expense 10,581 37,052
Other operating expenses 108,431 80,855
Restructuring charges 239,495 --
----------- -----------
Total costs and expenses 1,840,141 2,401,971
----------- -----------
Loss before income taxes and minority interest (1,302,260) (502,903)
Income tax provision (3,300) (4,321)
Minority interest -- 271
----------- -----------
Net loss $(1,305,560) $ (506,953)
=========== ===========
Net loss per share - basic and diluted $ (0.88) $ (0.34)
=========== ===========
Average shares outstanding - basic 1,487,870 1,487,870
Average shares outstanding - diluted 1,487,870 1,487,870
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
IRONSTONE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Current assets:
Cash $ 561,410
Marketable securities available for sale 1,447,600
Accounts receivable, net of allowance for doubtful accounts
of $569,301 250,072
Prepaid expenses 12,377
------------
Total current assets 2,271,459
------------
Property and equipment - net 25,290
Other assets 1,911
------------
Total assets $ 2,298,660
============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 7,108
Accrued restructuring charges 21,234
Margin loan 154,400
Capitalized lease obligations - current portion 7,460
Deferred revenue 102,000
Other current liabilities 7,184
------------
Total current liabilities 299,386
------------
Capitalized lease obligations - net of current portion 4,169
------------
Shareholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares authorized of
which there are no issued and outstanding shares
Common stock, $0.01 par value, 25,000,000 shares authorized of
which 1,487,870 shares are issued and outstanding 14,879
Additional paid in capital 21,170,385
Accumulated deficit (19,751,582)
Accumulated other comprehensive income 561,423
------------
Total shareholders' equity 1,995,105
------------
Total liabilities and shareholders' equity $ 2,298,660
============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
IRONSTONE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(1,305,560) $ (506,953)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 36,192 62,609
Amortization 87,563 92,560
Undistributed minority interest in consolidated subsidiaries -- (271)
Loss on purchase of minority interest -- 1,245
Net (gain) loss on disposition of intangibles, property and equipment 51,284 (8,685)
Changes in assets and liabilities:
Accounts receivable 930,086 2,465,258
Other current assets 37,342 34,771
Other assets (1,911) (46,434)
Accounts payable (77,426) (110,311)
Accrued compensation (104,920) (473,456)
Accrued restructuring charges 21,234 --
Other current liabilities (119,650) (296,992)
----------- -----------
Net cash provided (used) by operating activities (445,766) 1,213,341
----------- -----------
INVESTING ACTIVITIES:
Purchase of property and equipment -- (25,183)
Proceeds from sale of property and equipment 22,179 16,946
----------- -----------
Net cash provided (used) by investing activities 22,179 (8,237)
----------- -----------
FINANCING ACTIVITIES:
Purchase of minority interest -- (101,433)
Payments on line of credit -- (350,000)
Payments on capitalized lease obligations (16,619) (40,262)
Payments on notes payable (150,000) (264,600)
----------- -----------
Net cash used by financing activities (166,619) (756,295)
----------- -----------
Net increase (decrease) in cash (590,206) 448,809
Cash at beginning of period 1,151,616 529,543
----------- -----------
Cash at end of period $ 561,410 $ 978,352
=========== ===========
Non-cash operating, investing and financing activities:
Write-downs expensed to accrued restructuring charges:
Property and equipment $ 21,234 $ --
Borrowings from capitalized lease obligations $ -- $ 21,377
Notes payable attained from asset purchase $ -- $ 15,000
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE> 7
IRONSTONE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Business Activities
Ironstone Group, Inc. (the "Company"), consolidates the financial statements of
its majority-owned subsidiaries Belt Perry Associates, Inc., an Arizona
corporation ("BPA"), Belt Perry Associates, Inc., a California corporation
("BPC"), Taxnet, Inc., an Arizona corporation ("Taxnet") and DeMoss Corporation,
a California corporation ("DeMoss"). All significant intercompany transactions
have been eliminated in consolidation. The Company's significant business
activities have included reducing, for a fee, ad valorem taxes assessed to
owners of real and personal property, generally in the Arizona and California
markets. During the third quarter of 1998, the Board of Directors continued with
the Company's withdrawal from the real and personal property tax consulting
business, including a restructuring and wind down of the Belt Perry property and
tax services group (Note 4).
Adjustments
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. 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 included and are of a normal recurring nature. The accompanying
condensed consolidated financial statements should be read in conjunction with
the Company's most recent Annual Report and Form 10-KSB for the year ended
December 31, 1997.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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.
Reclassifications
Certain 1997 amounts have been reclassified to conform to the 1998 presentation.
2. EARNINGS PER SHARE - BASIC AND DILUTED
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No. 128"),
effective for financial statements issued after December 15, 1997. This
statement provides simplified standards for the computation and presentation of
earnings per share ("EPS"), making EPS comparable to international standards.
SFAS No. 128 requires dual presentation of "Basic" and "Diluted" EPS by entities
with complex structures, replacing "Primary" and "Fully Diluted" EPS under APB
Opinion No. 15.
Basic EPS excludes dilution from common stock equivalents and is computed by
dividing net income (loss) applicable to common shareholders by the weighted
average number of common shares actually outstanding during the period. Diluted
EPS reflects the potential dilution from common stock equivalents, except where
inclusion of such common stock equivalents would have an antidilutive effect,
similar to Fully Diluted EPS, but uses only the average stock price during the
period as part of the computation.
The weighted average number of shares of common stock for the three month
periods ended September 30, 1998 and 1997 was 1,487,870. The weighted average
dilutive common shares for the three month periods ended September 30, 1998 and
1997 was 1,487,870. Common stock equivalents for the three month periods ended
September 30, 1998 and 1997 were not included in computing the weighted average
dilutive shares because their effects were anti-dilutive.
7
<PAGE> 8
IRONSTONE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
3. COMPREHENSIVE INCOME (LOSS)
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No.
130 requires reporting and displaying comprehensive income (loss) and its
components which, for the Company, includes net income (loss) and unrealized
gains and losses on marketable securities available for sale. The adoption of
SFAS No. 130 had no impact on the Company's results of operations or financial
position. In accordance with SFAS No. 130, the accumulated balance of other
comprehensive income is disclosed as a separate component of shareholders'
equity. Prior year financial statements have been reclassified to conform to the
requirements of SFAS No. 130.
For the three month periods ended September 30, 1998 and 1997, comprehensive
loss consisted of the following:
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Net loss $(254,437) $(284,873)
Other comprehensive income (loss):
Unrealized gain (loss) on
marketable securities
available for sale (427,700) 32,900
--------- ---------
Comprehensive loss $(682,137) $(251,973)
========= =========
</TABLE>
4. RESTRUCTURING
During the third quarter of 1998, the Board of Directors continued with the
Company's withdrawal from the real and personal property tax consulting
business, including a restructuring and wind down of the Belt Perry property and
tax services group. During September 1998, the Company initiated an early lease
termination on its former San Diego office facilities, and in an effort to
reduce its monthly rent expense, signed a one-year lease for a smaller office
space. In addition, management had begun the process to terminate the Company's
401(k) Plan and subsidiary corporations. As of September 30, 1998, the Company's
operations relating to its property tax consulting business had ceased.
During the three month period ended September 30, 1998, the Company recorded a
reversal of restructuring charges in the amount of $98,723. This reversal was
primarily due to management's analysis of the Company's fixed assets as of
September 30, 1998, and the actual write-downs or write-offs of the assets to
their net realizable values. These write-downs or write-offs were previously
recorded as restructuring charges during the second quarter of 1998. The
reversal of restructuring charges included adjustments to employee severance
costs, fixed assets and intangibles as follows:
<TABLE>
<CAPTION>
Description Amount
- ----------- ------
<S> <C>
Severance and related costs $11,399
Write-down of property and equipment 53,809
Write-down of goodwill and intangibles 33,515
-------
Total adjustment - restructuring charges $98,723
=======
</TABLE>
The restructuring process, which resulted in the elimination of all Belt Perry
Associates personnel as of September 30, 1998, is expected to be completed by
the end of 1998.
8
<PAGE> 9
IRONSTONE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
5. SUBSEQUENT EVENTS
During October 1998, the former officer of the Company initiated an Asset
Purchase Agreement (the "Agreement") to acquire from the Company certain
furniture, equipment and intangibles in exchange for a lump sum purchase price
of $10,000 and the assumption of an existing equipment lease. Management does
not believe there will be a gain or loss resulting from the sale. The Agreement
also transfers ownership in the existing trade receivables in exchange for 50%
of all collections, net of expenses, for a period of approximately one year.
Separate from the Agreement, the former officer will assume the lease on the San
Diego office facilities.
On or about the effective date of the Agreement, the former officer's
resignation will take effect, and the concurrent appointment of a new officer by
the Company's Board of Directors will take place.
9
<PAGE> 10
IRONSTONE GROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results Of Operations
Restructuring
During the third quarter of 1998, the Board of Directors continued with the
Company's withdrawal from the real and personal property tax consulting
business, including a restructuring and wind down of the Belt Perry property and
tax services group. During September 1998, the Company initiated an early lease
termination on its former San Diego office facilities, and in an effort to
reduce its monthly rent expense, signed a one-year lease for a smaller office
space. In addition, management had begun the process to terminate the Company's
401(k) Plan and subsidiary corporations. As of September 30, 1998, the Company's
operations relating to its property tax consulting business had ceased.
During the three month period ended September 30, 1998, the Company recorded a
reversal of restructuring charges in the amount of $98,723. This reversal was
primarily due to management's analysis of the Company's fixed assets as of
September 30, 1998, and the actual write-downs or write-offs of the assets to
their net realizable values. These write-downs or write-offs were previously
recorded as restructuring charges during the second quarter of 1998. The
reversal of restructuring charges included adjustments to employee severance
costs, fixed assets and intangibles as follows:
<TABLE>
<CAPTION>
Description Amount
- ----------- ------
<S> <C>
Severance and related costs $11,399
Write-down of property and equipment 53,809
Write-down of goodwill and intangibles 33,515
-------
Total adjustment - restructuring charges $98,723
=======
</TABLE>
The restructuring process, which resulted in the elimination of all Belt Perry
Associates personnel as of September 30, 1998, is expected to be completed by
the end of 1998.
Comparison of 1998 to 1997
Revenues for the three and nine month periods ended September 30, 1998 decreased
$473,567 and $1,361,187 or 88.67% and 71.68%, respectively, as compared to the
same periods in 1997. Such declines are primarily due to a decrease in billings
as a result of the closing of the Company's Arizona, Northern California and
Southern California operations, as part of the Company's overall plan to divest
itself of the property and tax services group.
Costs and expenses for the three and nine month periods ended September 30, 1998
decreased $503,960 and $561,830 or 61.54% and 23.39%, respectively, as compared
to the same periods in 1997. The three month period decrease is comprised
primarily of reductions in salaries and wages of $379,909 or 77.47% and reversal
of restructuring charges of $98,723. The decrease in salaries and wages was due
to reductions in staff that occurred in July 1998 as a result of the Company's
wind down of the Southern California operations. The reversal of restructuring
charges was due to the Company's write-downs and write-offs of certain assets to
their net realizable values. These write-downs and write-offs were previously
recorded as restructuring charges during the second quarter of 1998.
The nine month period decrease is due primarily to the $855,536 or 61.15%
reduction in salaries and wages, partially offset by a $346,330 or 757.49%
increase in bad debt expense. The decrease in salaries and wages is due to staff
reductions that occurred in January and July 1998 as a result of the Company's
wind down of the Southern California operations and closure of the Arizona and
Northern California operations. The increase in bad debts is the result of
additional allowance provisions taken during the second and third quarters of
1998. As a result of the Company's restructuring and wind down, collection and
settlement efforts to resolve delinquent accounts had accelerated, and many
accounts previously considered collectible have been written off in full.
10
<PAGE> 11
IRONSTONE GROUP, INC.
Liquidity And Capital Resources
Net cash used by operating activities for the three and nine month periods ended
September 30, 1998 was $346,775 and $445,766, respectively. Cash decreased
$347,181 and $590,206 for the three and nine month periods ended September 30,
1998, respectively. The third quarter reduction in cash is primarily due to
payment of accrued severances and other termination pay in July and August as a
result of the closure of the Southern California property tax operations. For
the nine month period, the decrease in cash is primarily due to payments of
accrued officer bonuses and final note payments to former shareholders in
addition to the accrued severances and termination pay discussed above.
Due to the Company's $427,700 unrealized loss on marketable securities held for
sale, combined with the $297,651 reduction in accounts receivable, and partially
offset by the $119,727 reduction in accounts payable, the Company's working
capital decreased by $597,748 during the three month period ended September 30,
1998. For the nine month period ended September 30, 1998, working capital
decreased $918,518, primarily due to the $930,086 reduction in accounts
receivable. Management believes that its current level of cash and anticipated
cash flows from existing sublease rental agreements and interest on demand
deposits will be adequate to meet its restructuring and other operating needs
during the remainder of 1998.
The Company may obtain additional equity or working capital through liquidation
of its investment in corporate securities, bank borrowings and public or private
sales of equity securities and exercises of outstanding stock options. There can
be no assurance, however, that such additional financing will be available on
terms favorable to the Company, or at all.
Special Note Regarding Forward-Looking Statements
Certain of the statements in this document that are not historical facts
including, without limitation, statements of future expectations, projections of
financial condition and results of operations, statements of future economic
performance and other forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, are subject to known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to differ materially from
those contemplated in such forward-looking statements. In addition to the
specific matters referred to herein, important factors which may cause actual
results to differ from those contemplated in such forward-looking statements
include (i) the results of the Company's efforts to implement its business
strategy; (ii) actions of the Company's competitors and the Company's ability to
respond to such actions; (iii) changes in governmental regulation, tax rates and
similar matters; and (iv) other risks detailed in the Company's other filings
with the Commission.
Trends and Uncertainties
Termination of Historical Business Lines
By winding down the Belt Perry property and tax services group, the Company has
substantially exited from its traditional lines of business. Management and the
Board of Directors are actively seeking appropriate business combination
opportunities for the Company. In the alternative, management and the Board are
looking for an investment opportunity for the Company to invest some or all of
its remaining liquid assets. In the interim, the Company's cash assets are
invested in corporate securities and demand deposit accounts. If the Company
does not find an operating entity to combine with, and if its assets are not
invested in certain types of securities (primarily government securities), it
may be deemed to be an investment company under the terms of the Investment
Company Act of 1940, as amended.
Year 2000
The Company is working to resolve the potential impact of the Year 2000 issue on
the ability of the Company's computerized information systems to accurately
process information that may be date-sensitive. Any of the Company's programs
that recognize a date using "00" as the year 1900 rather than the year 2000
could result in errors or system failures. The Company has not completed its
assessment, but management currently believes that costs of addressing this
issue will not have a material adverse impact on the Company's financial
position. However, if the Company and third parties upon which it relies are
unable to address this issue in a timely manner, it could result in a material
financial risk to the Company. In order to assure that this does not occur, the
Company plans to devote all resources required to resolve any significant Year
2000 issues in a timely manner.
11
<PAGE> 12
IRONSTONE GROUP, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 10-QSB to be
signed on its behalf by the undersigned, thereunto duly authorized.
IRONSTONE GROUP, INC.
A DELAWARE CORPORATION
Date: November 6, 1998 By: /s/ Robert W. Rembowski
---------------------------------
Robert W. Rembowski
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Robert W. Rembowski Chief Executive Officer, November 6, 1998
- ----------------------- Secretary and Treasurer
Robert W. Rembowski (Principal Executive Officer and
Principal Financial Officer)
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 561,410
<SECURITIES> 1,447,600
<RECEIVABLES> 819,373
<ALLOWANCES> 569,301
<INVENTORY> 0
<CURRENT-ASSETS> 2,271,459
<PP&E> 41,847
<DEPRECIATION> 16,557
<TOTAL-ASSETS> 2,298,660
<CURRENT-LIABILITIES> 299,386
<BONDS> 11,629
0
0
<COMMON> 14,879
<OTHER-SE> 1,980,226
<TOTAL-LIABILITY-AND-EQUITY> 2,298,660
<SALES> 0
<TOTAL-REVENUES> 60,519
<CGS> 0
<TOTAL-COSTS> 314,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 110,849
<INTEREST-EXPENSE> 3,336
<INCOME-PRETAX> (254,437)
<INCOME-TAX> 0
<INCOME-CONTINUING> (254,437)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (254,437)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
