<PAGE>
UNITED STATES
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 EXCHANGE ACT
For the transition period from ______ to ______. Commission file
number 0-6540.
OCEANIC EXPLORATION COMPANY
(Exact name of small business issuer as specified in its charter)
DELAWARE 84-0591071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5000 South Quebec Street, Suite 450, Denver, CO 80237
(Address of principal executive offices)
(303) 220-8330
(Issuer's Telephone number)
-----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 X NO
----- -----
Shares outstanding at Common $.0625 Par Value
October 31, 1998
9,916,154
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
September 30, 1998 March 31, 1998
------------------ --------------
<S> <C> <C>
Cash $ 44,011 38,601
Receivables:
Oil and gas revenues 39,406 1,680
Affiliates 12,697 5,753
Other -- 1,326
------------ ------------
52,103 8,759
Prepaid expenses 982 1,482
------------ ------------
Total current assets 97,096 48,842
------------ ------------
Oil and gas property interests, full-cost method
of accounting (note 2) 39,000,000 39,000,000
Less accumulated amortization, depreciation
and valuation allowance (38,905,000) (38,810,000)
------------ ------------
95,000 190,000
Other assets 2,240 2,560
------------ ------------
$ 194,336 241,402
------------ ------------
------------ ------------
</TABLE>
(Continued)
2
<PAGE>
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
September 30, 1998 March 31, 1998
------------------ --------------
<S> <C> <C>
Current liabilities:
Notes payable to affiliate (note 3) $ 982,636 842,636
Accounts payable 167,469 210,338
Accounts payable to affiliate 60,000 60,000
United Kingdom taxes payable, including
accrued interest 506,167 486,959
Accrued expenses 138,830 67,353
----------- -----------
Total current liabilities 1,855,102 1,667,286
Deferred income taxes (note 4) 64,735 102,735
----------- -----------
Total liabilities 1,919,837 1,770,021
----------- -----------
Stockholders' deficit:
Preferred stock, $10 par value. Authorized
600,000 shares; none issued -- --
Common stock, $.0625 par value. Authorized
12,000,000 shares; 9,916,154 shares issued and
outstanding 619,759 619,759
Capital in excess of par value 155,696 155,696
Accumulated deficit (2,500,956) (2,304,074)
----------- -----------
Total stockholders' deficit (1,725,501) (1,528,619)
----------- -----------
Contingencies (note 2)
$ 194,336 241,402
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
September 30, September 30,
1998 1997 1998 1997
---------- --------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales - Greece (note 2) $ 124,003 404,660 124,003 246,858
Other 227,455 162,977 116,299 84,487
---------- --------- ------- -------
351,458 567,637 240,302 331,345
---------- --------- ------- -------
Costs and expenses:
Interest and financing costs 49,243 45,804 25,699 22,462
Exploration expenses 4,352 23,286 1,965 19,262
Amortization and depreciation 95,000 128,900 47,500 64,400
General and administrative 388,143 299,455 208,944 147,513
---------- --------- ------- -------
536,738 497,445 284,108 253,637
---------- --------- ------- -------
(Loss) income before income taxes (185,280) 70,192 (43,806) 77,708
Income tax expense (note 4) (11,602) (107,221) (30,602) (70,861)
---------- --------- ------- -------
Net (loss) income $ (196,882) (37,029) (74,408) 6,847
---------- --------- ------- -------
---------- --------- ------- -------
(Loss) income per common share $ (.02) (.01) (.01) .01
---------- --------- ------- -------
---------- --------- ------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
1998 1997
---------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (196,882) (37,029)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation 95,000 128,900
Deferred income tax benefit (38,000) (54,643)
Increase in accounts receivable and due from affiliates (43,344) (40,845)
Decrease (increase) in prepaid expenses and other assets 820 (3,934)
Decrease in accounts payable and accounts payable
to affiliate (42,869) (23,513)
Increase (decrease) in United Kingdom taxes payable,
including accrued interest payable, and accrued expenses 90,685 (4,728)
---------- -------
Net cash used in operating activities (134,590) (35,792)
Cash flows from financing activities:
Advances from (repayments of) notes payable to affiliate 140,000 (59,784)
---------- -------
Net increase (decrease) in cash 5,410 (95,576)
---------- -------
Cash at beginning of period 38,601 201,715
---------- -------
Cash at end of period $ 44,011 106,139
---------- -------
---------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated balance sheet as of March 31, 1998 which has been
derived from audited statements and the unaudited interim consolidated
financial statements included herein have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to those rules and
regulations, although the Registrant believes that the disclosures made are
adequate to make the information presented not misleading. In the opinion of
management, all adjustments consisting of normal reoccurring accruals have
been made which are necessary for the fair presentation of the periods
presented. The accounting policies of the Registrant are set forth in the
financial statements and notes thereto and are included in the Registrant's
latest annual report on Form 10-KSB. It is suggested that these consolidated
financial statements be read in conjunction with that document.
(2) OIL AND GAS SALES - GREECE
Effective January 1, 1993, the operator of the Greek properties
negotiated an agreement with the Greek government which amended the original
license agreement entered into in June 1975 (the "License Agreement"). The
amendment provides for a sliding scale for calculating the operator's
recoverable costs and expenses and for the calculation of the Greek royalty
interest. Denison Mines, Ltd. ("Denison"), the working interest owner having
the contractual obligation to the Registrant for the 15% net profits
interest, (also called "Prinos Interest" in some parts of this Report)
asserted that the calculation of the amounts due to the Registrant should be
based on the amended agreement with the Greek government. The Registrant
disagreed with this interpretation and commenced a legal action in Canada
seeking a declaration by the Ontario Court of Justice (General Division) in
Toronto, Canada (the "Court") that amounts due the Registrant attributable to
its 15% net profits interest be calculated based on the terms of the License
Agreement before this amendment. In December 1996, the Registrant received
notification that the Court had issued a judgment in its favor. The Court
ordered Denison to pay $6,098,290.68 including interest to the Registrant for
the period from January 1, 1993 through December 13, 1996 and to make
payments to the Registrant subsequent to December 13, 1996 also based on the
terms of the original License Agreement. The Court also awarded court costs
to the Registrant which are anticipated to be approximately $107,000 plus
interest. Denison subsequently filed a Notice of Appeal requesting that the
judgment be set aside. Therefore, it appears that the final determination
will likely have to be made by the Appellate Court. While the Registrant
believes it has a reasonable probability of prevailing in its action, the
ultimate
6
<PAGE>
outcome of the matter cannot presently be determined. Accordingly, no amounts
have been recorded in the accompanying consolidated financial statements for
current revenues or damages, if any, that may ultimately be awarded to the
Registrant.
In January 1998, the Registrant was notified by Denison that 1998 may
be the final year of production for the Greek properties. In the final year
of production, Denison is entitled to 100% cost recovery; consequently, the
Registrant will not receive any payments for its net profits interest in the
final year. In anticipation of such, Denison has ceased remitting net profits
interest payments to the Registrant on a monthly basis. In response, the
Registrant has notified Denison that this action is inappropriate prior to
the formal declaration to the Greek government that 1998 is the final year.
Denison has advised the Registrant that it is required to give the Greek
government 3 months notice for their declaration of final year. Denison has
also notified the Registrant that this declaration will not be made before
October 31, 1998 which, if given, would cause the final year period to run
from March 1998 through February 1999 at the earliest. Consequently, Denison
has paid the Registrant for its net profits interest relating to January and
February 1998. Should the consortium drill and successfully develop
additional exploration prospects in the offshore Greece property, or
otherwise extend the productive life of the property, the Registrant would be
entitled to once again receive its 15% net profits interest on a monthly
basis.
(3) NOTES PAYABLE TO AFFILIATE
Notes payable to affiliate at March 31, 1998 and September 30, 1998
represent borrowings under a $2,000,000 line of credit established in favor
of the Registrant by NWO Resources, Inc. ("NWO"), the parent company of
International Hydrocarbons, the Registrant's majority stockholder. The NWO
line of credit provides for cumulative draws of up to $2,000,000 with
interest payable monthly on the outstanding balance at the greater of the
U.S. bank prime lending rate or 1-3/4% above the 30-day LIBOR. The line of
credit is secured by the Registrant's 15% net profits interest in the
offshore Greece oil and gas property and all proceeds from the pending
litigation. Prior to the end of fiscal year 1995, the Registrant's credit
line was exhausted and the Registrant had no resources to make monthly
interest payments on the advances under the line of credit.
In September 1995, the Registrant entered into a Modification
Agreement with NWO (the "Modification Agreement") concerning the line of
credit. The Modification Agreement provided that NWO would forbear collection
of principal and interest on the line of credit until December 31, 1996. In
addition, the annual interest rate was adjusted to 8.25%. In exchange, the
Registrant was required to pursue funding from the sale of additional shares
of its common stock, which offering was subsequently completed.
In December 1996, an Extension Agreement was executed extending the
period of time during which NWO would forbear collection of principal and
interest until March 31, 1997. In March 1997, another Extension Agreement was
executed extending the forbearance period until March 31, 1998. This
agreement allows the Registrant to retain 50% of all net profits interest
payments from Denison, with the remaining amount to be paid to NWO. In
February 1998, a third extension agreement was
7
<PAGE>
executed extending the forbearance period until March 31, 1999. This
agreement allows the Registrant to draw an additional $350,000 for general
working capital purposes and to defer all interest payments until maturity.
As of June 30, 1998, the outstanding loan balance was $982,636. Even
if payments were to resume under the Prinos Interest as calculated under the
terms of the amended License Agreement, the Registrant does not believe that
at current production and price levels, the Prinos Interest will generate
funds sufficient to repay the obligations owed to NWO by March 31, 1999.
(4) INCOME TAXES
Income tax benefit (expense) consists of the following:
<TABLE>
<CAPTION>
Six Months Ended
September 30,
1998 1997
-------- --------
<S> <C> <C>
Current:
Foreign - Greece (49,602) (161,864)
Deferred:
Foreign - Greece 38,000 54,643
-------- --------
Total income tax benefit (expense) $(11,602) (107,221)
-------- --------
-------- --------
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Registrant's principal source of revenue has been
from its Prinos Interest. The Registrant also receives revenues from sales of
seismic data gathered in its oil and gas exploration and development
activities. That revenue is sporadic and is not sufficient to fund the
Registrant's ongoing operations. There have been no sales of seismic data
during the six-month period ended September 30, 1998 or the year ended
March 31, 1998.
The Registrant currently receives approximately $460,000 per year in
connection with services it provides to Cordillera Corporation and San Miguel
Valley Corporation pursuant to management agreements providing for
reimbursement of costs for actual time and expenses incurred in activities
conducted on behalf of those entities. The amounts received under the
management agreements are a reimbursement for employee salaries and other
operating expenses.
8
<PAGE>
Unless funds are collected as a result of the litigation with Denison
or the revenue stream is resumed under the Prinos Interest as calculated
under the original License Agreement, the Registrant will be required to
obtain additional capital to fund continuing operations beyond March 1999 and
to pay off the NWO loan and accrued interest when due on March 31, 1999. Due
to the uncertainties regarding the outcome of the litigation and the
Registrant's ability to obtain additional financing to fund its future
operations and repay the amounts due to NWO, in the event the judgment is
overturned on appeal, there is substantial doubt about the ability of the
Registrant to continue as a going concern. Accordingly, the Registrant's
auditors have issued an opinion on the Registrant's financial statements for
the year ended March 31, 1998 that includes an explanatory paragraph
discussing the uncertainty regarding the Registrant's ability to continue as
a going concern. The financial statements do not contain any adjustments that
may be necessary if the Registrant is unable to continue as a going concern.
When payments for the net profits interest were suspended in 1994,
the Registrant funded its operations through draws against the line of credit
established with NWO. Prior to the end of fiscal year 1995, the Registrant's
credit line was exhausted. During the first half of fiscal year 1996, the
Registrant had no resources to make monthly interest payments on the advances
under the line of credit.
On September 19, 1995, the Registrant entered into the Modification
Agreement with NWO. The Modification Agreement, secured by the Registrant's
Prinos Interest and all proceeds from the Registrant's lawsuit against
Denison, provided for limited funding of litigation expenses and temporary
relief from any collection actions by NWO. The Modification Agreement also
allowed the Registrant to retain up to $200,000 of any proceeds received for
its net profits interest for general working capital purposes.
In February 1998, the Registrant executed an Extension Agreement to
the Modification Agreement whereby NWO agreed to forbear any collection
proceedings on the line of credit until March 31, 1999. In addition, this
agreement allows the Registrant to draw an additional $350,000 in principal
for general working capital purposes and to defer further principal and
interest payments until maturity. Although these funds should be sufficient
to fund the litigation and limited operations through at least March 31,
1999, the Registrant will be required to obtain additional capital to fund
continuing operations beyond March 1999 and pay off the NWO loan and accrued
interest.
As of September 30, 1998, the outstanding loan balance was $982,636.
Even if payments were to resume under the Prinos Interest as calculated under
the terms of the amended License Agreement, the Registrant does not believe
that at current production and price levels, the Prinos Interest will
generate funds sufficient to repay the obligations owed to NWO by March 31,
1999.
The Registrant's net profits interest in the offshore Greece property
is currently the subject of litigation. In June 1994, the Registrant
commenced legal action against Denison who has the contractual obligation to
pay the net profits interest. The Registrant was seeking a declaration by the
Court that amounts due the Registrant attributable to its interest be
calculated based on the terms of the License Agreement prior to a 1993
amendment agreed to by the consortium and the Greek
9
<PAGE>
government. In September 1996, the lawsuit went to trial. In December 1996,
the Registrant received notification that the Court had rendered a judgment
in the Registrant's favor. The defendant subsequently filed a Notice of
Appeal requesting that the judgment be set aside. Therefore, it appears that
the final determination will likely be made by the Appellate Court. While the
Registrant believes there is a reasonable probability of prevailing in the
litigation, the ultimate outcome of the lawsuit cannot be determined at this
time.
Even if a final determination in the Registrant's favor is obtained,
of which there is no assurance, there is no guarantee that the Registrant
would be able to collect that judgment and, if able to collect, when the
judgment would be actually collected. Previously, it appeared, based on
Denison's public filings, that the financial stability of Denison was
questionable and that Denison continued to operate at the sufferance of its
secured creditors. Based upon more recent public filings, however, it appears
that Denison's debt restructuring approved in 1995 may have been successful
in preserving Denison as a going concern. This restructuring may also
increase the likelihood that Denison would have assets available for
satisfaction of a judgment in favor of the Registrant. However, the
Registrant does not have sufficient information to determine whether any
assets of Denison are unencumbered and available for satisfaction of a final
determination in favor of the Registrant.
If the final determination is not favorable, the Registrant will
still be entitled to its Prinos Interest. However, even if the net profits
interest payments resume, it is uncertain if the payments made under the
Prinos Interest as calculated under the terms of the amended License
Agreement at current production and price levels will be sufficient to repay
the obligations to NWO. The Registrant may be forced to liquidate its assets,
and in such case, little if any assets would be available for distribution to
shareholders.
In January 1998, Denison notified the Registrant that based upon
current price and production levels, it anticipates that 1998 may be the
final year of production for the Prinos and Prinos North Fields. In the final
year of production, Denison is entitled to 100% cost recovery; consequently,
the Registrant will not receive any payments for its net profits interest. In
anticipation of such, Denison ceased remitting net profits interest payments
to the Registrant on a monthly basis. In response, the Registrant has
notified the working interest owner that this action is inappropriate prior
to the formal declaration to the Greek government of 1998 being the final
year. Denison has advised the Registrant that it is required to give the
Greek government 3 months notice for their declaration of final year. Denison
has also notified the Registrant that this declaration will not be made
before October 31, 1998 which, if given, would cause the final year period to
run from March 1998 through February 1999 at the earliest. Consequently,
Denison has paid the Registrant for its net profits interest relating to
January and February 1998. Should the consortium drill and successfully
develop the new exploration prospects in the offshore Greece property or
otherwise extend the life of the property, the Registrant would be entitled
to once again receive its 15% net profits interest on a monthly basis.
If the litigation with Denison is resolved in the Registrant's favor
and payments are resumed under the Prinos Interest as calculated under the
License Agreement prior to the 1993 Amendment,
10
<PAGE>
that revenue should be sufficient to repay the NWO loan and fund on-going
operations and limited new exploration activities. There is no assurance as
to how long the Prinos property will continue to produce oil and gas and,
accordingly, if the Registrant can expect to receive any future revenue from
its Prinos Interest.
YEAR 2000 READINESS
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. As a result,
any of the Registrant's computer programs that have date-sensitive software
may recognize a date using "00" and the year 1900 rather than the year 2000.
This could result in system failures or miscalculations causing disruptions
of operations of the Registrant.
Since 1996, the Registrant has replaced all of its computer hardware
and software with that which is Year 2000 compliant. The cost associated with
these upgrades was not material.
Failure of third parties upon whom the Registrant's business relies
to timely remediate their Year 2000 Issues could adversely affect the
Registrant's operations. However, the major third parties with whom the
Registrant deals have indicated that they are addressing the Year 2000 Issue
and intend to have the matter resolved before December 1999.
The Registrant has not, to date, implemented a Year 2000 Contingency
Plan. However, the Registrant is prepared to develop and implement a
contingency plan should the status of any of the above change.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June 1994, the Registrant commenced legal action against Denison
seeking a declaration by the Court that amounts due the Registrant
attributable to its net profits interest in certain oil and gas producing
areas offshore Greece be calculated based on the terms of the License
Agreement prior to a 1993 amendment agreed to by the consortium and the Greek
government. On December 13, 1996, the Registrant received notification that
the Ontario Court of Justice (General Division) in Toronto, Canada, had
issued a judgment in its favor. Specifically, the Court found that Denison is
obligated to pay the Registrant its 15% net profits interest in accordance
with the terms of the License Agreement prior to the 1993 amendment. First,
the Court ordered Denison to pay $6,098,290.68 including interest to the
Registrant for the period January 1, 1993 through December 13, 1996. Second,
the Court ordered Denison to make payments to the Registrant subsequent to
December 13, 1996, also calculated based on the terms of the original License
Agreement. Lastly, the Court awarded court costs to the Registrant which are
anticipated to be approximately $107,000 plus interest. Subsequent to
receiving the judgment from the Court, Denison filed a Notice of Appeal with
11
<PAGE>
the Court in which it requested that the judgment be set aside for errors in
the judge's findings. The Registrant disagrees that there were errors made.
Therefore, it appears that the final determination will likely have to be
made by the Appellate Court. While the Registrant believes there is a
reasonable probability of prevailing in the litigation, the ultimate outcome
of the lawsuit cannot be determined at this time. Accordingly, no amounts
have been recorded in the accompanying financial statements for current
revenues or damages, if any, that may ultimately be awarded to the Registrant.
See the Registrant's Form 10-KSB for the fiscal year ended March 31,
1998, for a more detailed discussion of these legal proceedings.
ITEM 2. CHANGE IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed herewith are listed below and if not located in
another previously filed registration statement or report, are attached to
this Report at the pages set out below. The "Exhibit Number" below refers to
the Exhibit Table in Item 601 of Regulation S-B. Those reports previously
filed with the Securities and Exchange Commission as required by Item 601 of
Regulation S-B are incorporated herein by reference, in accordance with the
provisions of Rule 12b-32, to the reports or registration statements
identified below.
Exhibit Number Name of Exhibit Location
- -------------- --------------- --------
None
(b) No reports on Form 8-K were filed during the quarter for which
this Report is filed.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OCEANIC EXPLORATION COMPANY
Date: November 13, 1998 /s/ Charles N. Haas
------------------------ -----------------------
Charles N. Haas
President
Date: November 13, 1998 /s/ Lori A. Brundage
------------------------ -----------------------
Lori A. Brundage
Treasurer and Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 44,011
<SECURITIES> 0
<RECEIVABLES> 52,103
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 97,096
<PP&E> 39,000,000
<DEPRECIATION> (38,905,000)
<TOTAL-ASSETS> 194,336
<CURRENT-LIABILITIES> 1,855,102
<BONDS> 0
0
0
<COMMON> 619,759
<OTHER-SE> 155,696
<TOTAL-LIABILITY-AND-EQUITY> 194,336
<SALES> 0
<TOTAL-REVENUES> 351,458
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 487,495
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,243
<INCOME-PRETAX> (185,280)
<INCOME-TAX> (11,602)
<INCOME-CONTINUING> (196,882)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (196,882)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
