UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORTPURSUANTTOSECTION13 OR15(d)
OFTHESECURITIESANDEXCHANGEACTOF1934
For the Quarter ended March 31, 1996
Commission File No. 0-12116
ComTec International, Inc.
(Name of Small Business Issuer in its charter)
New Mexico 75-2456757
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
10855 E. Bethany Drive, Aurora, CO 80014
(Address of principal executive offices)
(303) 743-7983
(IssuerOs Telephone Number Including Area Code)
Common Stock, $.001 par value
(Title of Class)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for
such shorter period that the registrant was
required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.
Yes __ No X
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents
and reports required to be filed by Sections
12,13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed
by a court.
Yes __ No X
Indicate the number of shares outstanding of each
of the issuerOs classes of common equity, as of
the close of the period covered by this report:
29,814,750Shares of Common Stock ($.001 par value)
TABLE OF CONTENTS
FORM 10-QSB REPORT - FOR QUARTER ENDED MARCH31, 1996
ComTec International, Inc.
PART I
Item 1. Financial Statements 1
Item 2.ManagementOs Discussion and Analysis or Plan of Operation1
PART II
Item 1. Legal Proceedings 3
Item 2. Change in Securities 3
Item 3. Defaults Upon Senior Securities 3
Item 4. Submission of Matters to a vote of Security Holders 3
Item 5. Other Information 4
Item 6. Exhibit and Reports on Form 8-K 5
SIGNATURE PAGE 6
INDEXTO THEFINANCIALSTATEMENTS 6
PART I
ITEM 1. FINANCIAL STATEMENTS See F-1 to F-4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(a) Plan of Operation:
On May, 10, 1995, The Company's strategic business plan changed
from gaming and transportation to wireless telecommunications.
Initially, the CompanyOs emphasis will be certain Specialized Mobile
Radio (SMR) acquisitions currently under contract or in negotiations;
and the secondary focus will be on other communications services and
activities which the Company plans to provide through its
subsidiaries. These services and activities will include Interactive
CD-ROM, Internet and media services; Long Distance Services
(Switching, Prepaid Calling Cards, POS/ATM Transactions); and
Satellite uplinking services. To date, the CompanyOs activities have
been limited to raising initial capital, hiring its initial employees,
negotiating and acquiring its initial SMR systems and channels,
developing its strategic business plan and commencing further
acquisitions of operating Specialized Mobile Radio (OSMRO) systems. As
of March 31, 1996, the Company was in the development stage and had
minimal revenues, none of which was related to itOs current core
business.
The Company has limited capitalization and is dependent on the
proceeds of private and public offerings to continue as a going
concern, implementing its business plan and completing targeted
acquisitions. As of March 31, 1996, the unaudited results of the
Company indicated assets of $2,608,069 and negative working capital of
$1,528,004.
Although the Company will endeavor to finance its working capital
needs through additional debt or equity financing, there is no
assurance that this financing can be obtained on terms acceptable to
the Company. In addition, any debt financing may require the Company
to mortgage, pledge or hypothecate its assets. Furthermore, as of
March 31, 1996, the Company was in default covering certain notes
payable to related parties and short term notes and there is no
guarantee that even if the future debt or equity financing is secured
future defaults can or will be cured.
All during 1995 and to the date of this filing, the Company has
had and continues to have a substantial need for working capital to
cure prior loan defaults, close various acquisitions and for normal
operating expenses associated with the Company continuing as a going
concern. The Company is currently in discussions with one or more
companies for a private and/or public debt and equity financing
package(s).
Subsequent to March 31, 1996, the Company has acquired
management options covering 2,620 (YX), 800 MHz SMR licenses and has
started the construction of of over 1,000 licenses. The Company
estimates that the initial system will be operational in the first
quarter of 1997 and plans to have this system generating significant
revenues by the end of fiscal year ended June 30, 1997.
(b) ManagementOs Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
The Company is a development stage enterprise, and its operations
to date have been limited to startup activities. The CompanyOs
financial statements are therefore not indicative of anticipated
revenues which may be attained or expenditures which may be incurred
by the Company in future periods. The CompanyOs plan to achieve
profitable operations is subject to the validity of its assumptions
and risk factors within the industry and Company.
Quarter Ended September 30, 1995.
Prior to May 10, 1995, the Company's only activity was attempting
to execute the business plans in the areas of gaming and
transportation. These business plans failed during this period.
For the quarter ending March 31, 1996 the Company's incurred
general and administrative expenses of $120,920, a 163% increase from
expenses incurred during 1995. The majority of these costs were
related to the acquisition and operation of John Sandy Production,
Inc. and increased operational costs directly related to the CompanyOs
continued business plan activities in the wireless telecommunication
industry.
On July 26, 1995, the Company acquired John Sandy Productions,
Inc.. John Sandy Productions, Inc.(OJSPO), accordingly, comparing
results of operations from 1994 to 1995 are not indicative of like
operations during these periods.
As of March 31, 1996, $35,000 consisting of a short-term note
due Phillips Energy Corp. and $121,000 (of which as of the date of
this filing is approximately $80,000) due Local Service Corp, are in
dispute via counter-claims against Local Service Corp. and Phillips
Energy (see Part 11 Item 1. LEGALPROCEEDINGS).
At March 31, 1996, the Company records indicated an issued and
outstanding common stock balance of 29,814,750 shares with shareholder
equity of $388,708. As of that date, $420,00 of preferred shares had
been authorized and issued, but are being held pending the outcome of
the CompanyOs counter claims against Local Service Corp.,
International Corporate Development LTD, Premier Financial Services,
Inc., Phillips Energy Corporation, and the individuals: John Watson,
Frank Grey, and Bob Laventhal. (see Part 11 Item 1. LEGALPROCEEDINGS).
Quarter Ended March 31, 1995.
During the quarter ended March 31, 1996, the CompanyOs prior
management incurred general and administrative expenses of $46,461, a
47% decrease from the $87,055 in similar expenses during 1994. The
decrease was principally attributable to prior managementOs
unsuccessful efforts to locate, evaluate, acquire and operate gaming
and real estate projects started in the prior years. As of March 31,
1995, the Company was a development stage entity with virtually no
revenue.
Subsequent Events:
Acquisitions:
DCL Associates, Inc. (ODCLO) is a private company under contract
to assist Comtec in obtaining option agreements covering 2,435 (YX)
SMR channels in 20 states. Pursuant to the Acquisition Agreement this
transaction is valued at approximately $2,000,000. The Company
satisfied itOs closing obligations as of August 6, 1996 defined as the
option closing date in the option agreements with payment of $149,127
in cash. The Company is proceeding with the issuance of the remaining
combination of the CompanyOs common stock and preferred stock as the
remaining closing obligation to finalize this acquisition.
Pending Acquisitions:
Network Teleports, Inc. (ONTIO) is a private corporation and a
proposed majority owned subsidiary of the Company pursuant to a
contract to purchase 61% of the issued and outstanding shares of NTI.
NTI is currently broadcasting television and cable programming along
with other data and transmission services via satellite uplink from
itOs Master Hub located in New Orleans, Louisiana. This hub is
equipped with Vector Earth Stations (VES) which transmit all-digital
signals from various remote locations to the satellite. Pursuant to
the Acquisition Agreement this transaction is valued at $915,000. The
purchase payments are being held in escrow pending final FCC approval
of the transaction and certain other conditions.
Telecosm & Associates L.C. ("Telecosm") is a private Liability
Company under contract with the Company to sell all controlling
interest in certain SMR Management Agreements and Option Contracts
covering approximately 2,119 SMR channels and situated in
approximately 42 states, Puerto Rico and the Virgin Islands. The
Company is currently negotiating final purchase price based on the
CompanyOs due diligence and intends to pay Telecosm for this
transaction in the form of a combination of the CompanyOs common stock
and preferred stock. This transaction is expected to close in the
third quarter of calendar year 1996 pending the outcome of the
CompanyOs due diligence review.
Commercial Communications Inc. (OCCIO) is a private corporation
whose primary business is SMR. CCI is currently governed by the United
States Bankruptcy Courts, and attempting to emerge from Chapter 11.
The Company has an Acquisition Agreement to acquire the assets and
business of CCI in a transaction valued at $500,000. Payment for this
system will be made in the form of a promissory note and a combination
of the CompanyOs common stock and preferred stock. The revenues are
yet to be audited and it is expected that as a result of the
bankruptcy proceedings, CCI may have suffered a percentage of lost
revenues. However, the initial value in this acquisition will be
additional SMR channels (radio spectrum) and an experienced technical
staff. The acquisition of this company is contingent on approval of
any purchase by the United States Bankruptcy Court.
Part II
ITEM 1. LEGAL PROCEEDINGS
On December 21, 1995, the Company was the subject of an ex parte
verified complaint and motion for appointment of a receiver commenced
by Local Service Corporation et al, the former owner of the CompanyOs
commercial building. The complaint was filed in the District Court of
Arapahoe County, Colorado, and sought a decree dissolving the Company,
the appointment of a receiver and an inspection of the CompanyOs books
and records. On January 4, 1996 the court entered an order appointing
Mr. John Watson as receiver as demanded in the plaintiffs complaint.
The plaintiff's claims were based upon alleged illegal and fraudulent
acts on the part of the Company's management in encumbering the
CompanyOs real estate without consideration and corporate waste and
mismanagement. The court found no merit to this suit which requested a
specific receiver be appointed to oversee the Corporation's affairs.
On January 12, 1996, and upon motion brought by the Company, the court
vacated the order appointing a receiver and ordered the receiver not
to interfere with the CompanyOs business.
During the aforementioned proceedings another lawsuit was
discovered dated October 16, 1995 (Case No. 95 CV 1973) and filed
against the Company and its subsidiary, Key Car Finance Company, and
affiliate Keystone Holding Corp. by Local Service Corp.. On April 30,
1996, Arapahoe County District Court Judge dismissed this case for
failure to prosecute.
On March 6, 1996, the Company filed counter claims against Local
Service Corp., International Corporate Development LTD , Premier
Financial Services, Inc., Phillips Energy Corporation, and the
individuals: John Watson, Frank Grey, and Bob Laventhal. The
corporation intends to vigorously defend and seek damages against this
group for their actions during the time they attempted to seize
control of the Corporation.
On April 19, 1996, the Company filed a lawsuit titled Comtec
International, Inc. d/b/a Comtec Holding Corp. v Tim Degarmo, DBI
Design Builders, LLC and All Other Occupants. (Civil Action No. 96
CV166). This litigation is seeking the eviction of the aforementioned
from the CompanyOs commercial building whereby Tim Degarmo and DBI
Design Builders, LLC have become tenants at will. In addition to the
eviction, the Company seeks damages for negligent and incomplete
construction work performed on the Company's commercial office
building in Aurora, Colorado and defamation from remarks made by Tim
Degarmo against the Company. The suit demands reimbursement for work
never performed in the amount of $27,000 and unspecified funds for
damages to the CompanyOs reputation and good standing in the
community. The Company's senior management is of the opinion their
claims and damages have merit and expects the Company will prevail.
The Company was forced to hire another contractor to repair and
complete work performed by DBI Design Builders, LLC.
Except for the foregoing, no material legal proceedings, to which
the Company is a party or to which the property of the Company is
subject, is pending or is known by the Company to be contemplated.
ITEM2. CHANGE IN SECURITIES. NONE
ITEM3. DEFAULTS UPON SENIOR SECURITIES. NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. NONE
ITEM 5. OTHERINFORMATION
(a) CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
DISCLOSURE
Effective July 20,1995, the Board of Directors of the Company
dismissed Hollander, Gilbert & Co.. The report of Hollander, Gilbert &
Co. for the year-end June 30, 1994 contained a modification as to the
CompanyOs ability to continue as a going concern. During the year end
of June 30, 1994, and the subsequent interim period, there was no
disagreement with Hollander, Gilbert & Co. on any manner of accounting
principle or practice, financial statement disclosure or auditing
scope or procedure, which disagreement, if not resolved to the
satisfaction of those accountants, would have caused it to make
reference to the subject matter in connection with its report. The
Company dismissed Hollander, Gilbert & Co. as the Company's
independent accountants due to the Company's relocation and change in
senior management.
Effective July 20, 1995, the Company retained Michael B. Johnson,
Englewood, Colorado as new independent accountant ("Johnson"). During
the Company's two most recent fiscal years, and the interim period
since completion of its last fiscal year, the Company had not
consulted Johnson with respect to the application of accounting
principles to a specified transaction, the type of audit opinion that
might be rendered on the Company's financial statements or any matter
that was the subject of a disagreement or reportable event.
On December 15, 1995, the Company dismissed Michael B. Johnson,
as its independent Certified Public Accountant and retained Causey
Demgen & Moore Inc., of Denver, Colorado as its new independent
Certified Public Accountants. The Company duly reported this change
in accountants to the Securities and Exchange Commission in its Form 8-
K current report dated December 15, 1995.
On August 14, 1996, Causey Demgen & Moore Inc., declined to stand
for reelection for their client-auditor relationship with ComTec
International, Inc., with which the Company's Board of Directors
concurred. This decision was not as a result of any disagreement with
Causey Demgen & Moore Inc. or any manner of accounting principle or
practice, financial statement disclosure or auditing scope or
procedure. The Company duly reported this change in accountants to the
Securities and Exchange Commission in its Form 8-K current report
dated On August 14, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) & (b) Financial Statements and Schedules. See Index to Financial
Statements beginning on page 7.
(c) Exhibits. The following documents are filed herewith or
incorporated herein by reference as Exhibits:
Exhibits
2.0 Acquisition of John Sandy Productions, Inc. dated July 26,
1995. (incorporated by reference to the Company's Form 10-KSB
as of June 30, 1995).
2.1 Acquisition Agreement between the Company and DCLAssociates
dated April 29, 1996. (incorporated by reference to the
Company's Form 10-KSB as of June 30, 1995).
2.2 Letter of Intent between the Company and Telecosm dated May
31, 1996. (incorporated by reference to the Company's Form 10-
KSB as of June 30, 1995).
2.3 Acquisition Agreement between the Company and Commercial
Communications, Inc. dated January 3, 1996. (incorporated by
reference to the Company's Form 10-KSB as of June 30, 1995).
3.0 Articles of Incorporation of the Company. (incorporated by
reference to Exhibit 3.1 to the Company's Form S-1
Registration Statement No. 82-88530 dated December 20, 1983).
3.1 By-laws. (incorporated by reference to Exhibit 3.2 to the
CompanyOs Form S-1 Registration Statement No. 82-88530 dated
December 20, 1983).
4.0 Certificate of Designation of Series A Preferred Shares.
(incorporated by reference to the Company's Form 10-KSB as of
June 30, 1995).
10.01 Form of Employment Agreement between the Company and its
officers. (incorporated by reference to the Company's Form 10-
KSB as of June 30, 1995).
11 Not Applicable.
15 Not Applicable.
18 Not applicable.
19 Not applicable.
22 Published report regarding matters submitted to vote.
(incorporated by reference to the CompanyOs August 10, 1995
Proxy).
23 Not Applicable.
24 Not applicable .
d) The Company filed the following reports on Form 8-K:
August 14, 1996
December 15, 1995
August 25, 1995
May 10, 1995
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report signed on its behalf by the Undersigned, thereunto duly
authorized.
COMTEC INTERNATIONAL, INC.
Date: September 5, 1996 By: /s/ donald g. mack
Donald G. Mack, President,
Chief Executive Officer and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
Signature Title Date
/s/ donald g. mack Director
September 5, 1996
Donald G. Mack
/s/ thomas moscariello Director
September 5, 1996
Thomas Moscariello
/s/ mitchell b. chi Director
September 5, 1996
Mitchell B. Chi
COMTEC INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENTS
Consolidated Financial Statements
Page
Balance Sheets at March 31, 1994 and March 31, 1995 F-1
Statements of Operations at March 31, 1994 and March 31, 1995F-2
Statements of Cash Flows at March 31, 1994 and March 31, 1995F-3
Notes to the Financial Statements F-4
COMTEC INTERNATIONAL
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
6/30/95 3/31/96
(Unaudited)
Current assets
Cash $21,736 $51,219
Restricted Cash - 25,044
Accounts receivable - 68,840
Note receivable 18,610 26,667
Prepaid expenses 5,000 1,610
Total $45,346 $173,380
Property and equipment
Land $424,967 $424,967
Building 1,458,903 1,515,442
Communications equipment 300,000 333,947
Video EquipmenULibrary - 97,000
Automobile 5,150 5,150
Office equipment 9,069 84,067
$2,198,089 $2,460,573
Less accumulated depreciation (28,565) (108,624)
Net property and equipment $2,169,524 $2,351,949
Other assets
Deposits $ - $ 5,240
Management Contracts - 75,000
Tradename 2,500 2,500
Total other assets$ 2,500 82,740
2,217,370 2,608,069
Current liabilities
Accounts payable $74,336 $296,989
Accrued payroll and payroll taxes129,739 172,228
Accrued management fees payable 20,262 57,500
Leases - 34,246
Other accrued expenses 49,874 106,143
Notes payable-related parties 210,473 130,536
Short-term notes payable 203,500 257,048
Deferred income 23,862 23,862
Current portion oflong-term debt 622,572 622,832
Total current liabilities 1,334,618 1,701,384
Long-term debt 347,645 345,257
Minority interest in preferred
stock of subsidiary 172,720 172,720
Series A Converfible Preferred 420,000 420,000
Common stock 1,111,125 3,078,371
Deficit accumulated during
development stag (1,168,738) (3,109,663)
Total stockholders' equity
(deficit) 362,387 388,708
$2,217,370 $2,608,069
See accompanying notes.
F-1
COMTEC INTERNATIONAL
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended Nine Months Ended
March 31, March 31, Since
1995 1996 1995 1996 Inception
(Unaudited)Unaudited) (Unaudited)(Unaudited)(Unaudited)
Revenue
Fees $790 $34,830 $790 $189,411 $189,411
Services - 6,444 - 25,927 25,927
Sales - - - 1,000 1,000
Rental - 11,587 - 55,706 79,741
Interest - - - 2,589 2,589
Other - 5,441 - 28,194 36,767
Total 790 58,302 790 302,827 335,435
Cost of Sales
Contract labor - 4,400 - 23,893 23,893
Production costs - 4,876 - 63,840 63,840
Total - 9,276 - 87,733 87,733
Gross Profit 790 49,026 790 215,094 247,702
Expenses
General &
administrative 46,961 120,920 117,436 1,580,916 2,658,821
Consulting - 1,762 - 15,609 15,609
Officer salaries - 89,794 - 384,559 384,559
Interest - - - 94,876 189,752
Depreciation - 23,086 - 80,059 108,624
Total 46,961 235,562 117,436 2,156,019 3,357,365
Net income (loss) (46,171) (186,536) (116,646) (1,940,925) (3,109,663)
Weighted average common
shares outstanding 11,229,000 22,150,953 11,229,000 22,150,953 22,150,953
Net loss per share (0.00) (0.01) (0.01) (0.09) (0.14)
See accompanying notes.
F-2
COMTEC INTERNATIONAL, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended March 31, Since
1995 1996 Inception
(Unaudited) (Unaudited) (Unaudited)
Operating activities:
Net Loss $(409,118) $(1,940,925) $(3,089,257)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Depreciation expense 16,781 80,059 108,624
Services exchanged for stock - 926,205 1,488,588
Changes in assets and liabilities:
Increase in accounts receivable - (2,809) (2,809)
Decrease in prepaid interest - 11,329 17,329
Increase in accounts payable
and accrued expenses 219,126 327,804 529,424
Increase in deferred income - - 23,062
Total adjustments $235,907 $1,342,588 $2,165,018
Net cash used in
operating activities $(173,211) $(598,337) $(924,239)
Investing activities:
Purchase of property, plant and
equipment and trade name $ - $(140,167) $(142,667)
Restricted cash - (25,044) (25,044)
Decrease in note receivable - 22,952 22,952
Cash paid in acquisition net
of cash purchase - (14,964) 7,206
Other - (2,021) 13,881
Net cash used in
investing activities - (159,244) (123,672)
Financing activities:
Advances from related party $114,259 $ - $184,495
Proceeds from private placement of
common stock - 798,391 808,391
Payments on note payable 51,620 - (61,646)
Proceeds from notes payables - - 151,000
Payments on long-term notes
payable 3,824 (11,327) (13,110)
Proceeds from exercise of warrants - - 30,000
Net cash provided by
financing activities $169,703 $787,064 $1,099,130
Increase in cash $(3,508) $29,483 $ 51,219
Beginning cash balance 4,501 21,736 -
Ending cash balance $993 $51,219 $ 51,215
See accomr)anving notes.
F-3
ComTec International, Inc.
Notes to the Consolidated Finan@ial Statements
Note 1. Accounting Policies.
(a) The summary of the Issuer's significant accounting policies are
incorporated by reference to the Company's
SEC Form 10-KSB as of June 30, 1995.
(b) Intangible assets represent management and options agreements the company
has purchased to develop and
operate 800 MHz SMR radio licenses. SMR licenses are effective for twelve
months from the date of issue, after which they expire. During this twelve
month period, a license must be constructed and placed in operation. Once a
license is constructed, the license term is extended five years with unlimited
five year renewals. Licenses purchased by the Company are recorded at
acquisition cost plus direct expenses associated with obtaining the management
or option agreement. Certain option agreements purchased by the Company have
been granted Extended Implementation Waivers by the Federal Communication
Commission, thus extending the expiration date of a license for construction.
License agreements which expire are expensed in the year of expiration.
License options which are constructed are added to the direct construction
cost and amortized over the life of the communication equipment.
(c) All cash in escrow for pending acquisitions are recorded as Restricted
Cash.
(d) Video Library has been recorded based on the excess purchase price over
net book value of John Sandy
Productions, Inc. and represents approximately 3,000 classic video tapes of
extreme sporting events. This tape library is a revenue producing asset due
to the fact the video footage rights are sold to various television and film
companies for re-broadcast purposes. This video library is amortized and
expensed over a four year period. (see Note 2., "Acquisition of John Sandy
Productions, Inc.")
(e) The accompanying unaudited condensed financial statements reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the results of operations, financial position and cash flows.
The results of the interim period are not necessarily indicative of the
results for the full year.
Note 2. Acquisitions.
On July 26, 1995, the company acquired 100% of the outstanding stock of John
Sandy Productions, Inc. (JSP) in exchange for 400,000 shares of the Company's
common stock valued at $50,000 ($0.25 per share), $20,000 in cash and notes
paybale of $80,000. JSP is a television and film production company in the
Denver, Colorado area. The results of operations as recorded in the books and
records of JSP are maintained on the cash accounting method. JSP has been
consolidated as a whole owned subsidiary of the Company.
The Company acquired various assets and companies for cash, assets and stock
as follows:
As of Since
July 26. 1995 Inception
Assets acquired $ 235,551 $217,201
Liabilities assumed 85,551 1,479,240
Net assets acquired $ 150,000 $691,961
Cash paid $20,000 $ 20,000
Fair market value of Common
Stock issued 50,000 157,247
Fair market value of
Preferred Stock issued - 592,720
Special Distribution - (288,506)
Notes payable 80,000 202,500
$150,000 $691,961
Note 3. Non-cash disclosure of investing and financing activities:
During this nine months ended March 31, 1996, the Company acquired $75,000 of
intangibles for a note payable and satisfied $167,650 on notes payable and
accrued interest with common stock.
F. 4
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<FISCAL-YEAR-END> JUN-30-1996 JUN-30-1996
<PERIOD-END> MAR-31-1996 MAR-31-1996
<CASH> 76,263 76,263
<SECURITIES> 0 0
<RECEIVABLES> 95,507 95,507
<ALLOWANCES> 0 0
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<CURRENT-ASSETS> 173,380 173,380
<PP&E> 2,460,573 2,460,573
<DEPRECIATION> 108,624 108,624
<TOTAL-ASSETS> 2,608,069 2,608,069
<CURRENT-LIABILITIES> 1,701,384 1,701,384
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<INTEREST-EXPENSE> 0 94,876
<INCOME-PRETAX> (186,536) (1,940,925)
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