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 Quarter Ended March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 0-15224
ADVANCE DISPLAY TECHNOLOGIES, INC.
----------------------------------
(Exact name of small business issuer as
specified in its charter)
COLORADO 84-0969445
---------------------- -----------------------
(State of incorporation) (IRS Employer ID number)
1251 South Huron Street, Unit C, Denver, Colorado 80223
-------------------------------------------------------
(Address of principle executive offices) (Zip Code)
(303) 733-5339
----------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 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 May 1, 1998, 25,176,432 shares of Common Stock, $.001 par value per share
were outstanding.
Transitional Small Business Disclosure Format (check one):
YES NO X
----- -----
<PAGE>
ADVANCE DISPLAY TECHNOLOGIES, INC.
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets (unaudited) -
March 31, 1998 and June 30,1997 ................................. 3
Consolidated Statements of Operations (unaudited) -
Three months and nine months ended March 31, 1998
and March 31, 1997 and for the period from
March 15, 1995, inception, to March 31, 1998 .....................4
Consolidated Statements of Cash Flows (unaudited) -
Three months and nine months ended March 31, 1998
and March 31, 1997 and for the period from
March 15, 1995, inception, to March 31, 1998 ...................5-6
Notes to Consolidated Financial Statements (unaudited) .............7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition..................8-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..................................................12
Item 2. Changes in Securities..............................................12
Item 3. Defaults on Senior Securities......................................12
Item 4. Submission of Matters to a Vote of
Security Holders..........................................12
Item 5. Other Information..................................................12
Item 6. Exhibits and Reports on Form 8-K...................................12
Signatures.....................................................13
2
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<TABLE>
<CAPTION>
ADVANCE DISPLAY TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, June 30,
1998 1997
----------- -----------
ASSETS
------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 96,960 $ 235,731
Inventory 105,497 51,819
Other current assets 22,607 10,191
----------- -----------
Total current assets 225,064 297,741
PROPERTY AND EQUIPMENT 142,934 77,674
Less: Accumulated depreciation (29,120) (2,260)
----------- -----------
Net property and equipment 113,814 75,414
----------- -----------
INTANGIBLE ASSETS, net of accumulated
amortization of $106,032 and
$42,750, respectively 471,023 529,615
----------- -----------
TOTAL ASSETS $ 809,901 $ 902,770
=========== ===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 511,608 $ 558,140
Convertible notes payable to shareholders -- 500,000
Other accrued liabilities 122,180 111,494
----------- -----------
Total current liabilities 633,788 1,169,634
CONVERTIBLE, REDEEMABLE PROMISSORY NOTES TO SHAREHOLDERS 873,725 --
SHAREHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 100,000,000
shares authorized, 1,843,900 shares issued
and outstanding (liquidation preference of
$2,765,850) 1,844 1,844
Common stock, $.001 par value, 100,000,000 shares
authorized, 25,176,432 and 21,343,923 shares
issued and outstanding, respectively 25,176 21,344
Additional paid-in capital 2,999,670 2,453,503
Deficit accumulated during the development
stage (3,724,302) (2,743,555)
----------- -----------
Total shareholders' deficit (697,612) (266,864)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'DEFICIT $ 809,901 $ 902,770
=========== ===========
(See accompanying notes to unaudited consolidated financial statements)
3
</TABLE>
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<TABLE>
<CAPTION>
ADVANCE DISPLAY TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
March 15, 1995
(Inception)
Three Months Ended Nine Months Ended Through
March 31, March 31, March 31,
------------------------------ ----------------------------- ------------
1998 1997 1998 1997 1998
------------ ------------ ------------ ----------- ------------
REVENUE:
<S> <C> <C> <C> <C> <C>
Consulting $ -- $ -- $ 30,000 $ -- $ 30,000
Interest Income - related party -- 31,566 -- 84,528 162,761
------------ ------------ ------------ ------------ ------------
Total Revenue -- 31,566 30,000 84,528 192,761
COSTS AND EXPENSES:
Cost of goods -- -- 11,427 -- 11,427
General and administrative 218,035 314 741,015 2,240 880,370
Research and development 85,398 -- 211,923 -- 2,756,863
Interest expense - related party 18,926 44,153 46,383 114,201 268,404
------------ ------------ ------------ ------------ ------------
Total costs and expenses $ 322,359 $ 44,467 $ 1,010,748 $ 116,441 $ 3,917,064
------------ ------------ ------------ ------------ ------------
NET LOSS $ (322,359) $ (12,901) $ (980,748) $ (31,913) $ (3,724,303)
============ ============ ============ ============ ============
BASIC AND DILUTED NET LOSS
PER COMMON SHARE $ (.01) $ (.02) $ (.04) $ (.04)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 25,176,432 784,236 23,781,938 784,236
============ ============ ============ ============
(See accompanying notes to unaudited consolidated financial statements)
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADVANCE DISPLAY TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
March 15, 1995
(Inception)
Three Months Ended Nine Months Ended Through
March 31, March 31, March 31,
---------------------------- ---------------------------- -----------
1998 1997 1998 1997 1998
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Net Loss $ (322,359) $ (12,901) $ (980,748) $ (31,913) $(3,724,303)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Acquired research and development
expense -- -- -- -- 2,536,494
Depreciation and amortization 31,454 -- 86,750 -- 136,599
(Increase)decrease in:
Inventory 468 -- (53,678) -- (99,449)
Interest receivable -- (24,844) -- (63,682) (141,863)
Other current assets 6,044 -- (12,416) -- (12,416)
(Decrease) increase in:
Accrued interest payable to
shareholders 18,926 37,431 44,755 93,354 247,879
Accounts payable (9,834) -- (46,532) -- 65,766
Other accrued liabilities (58,401) -- (10,344) -- (41,009)
----------- ----------- ----------- ----------- -----------
Net cash used in operating (333,702) (314) (972,213) (2,241) (1,032,302)
activities ----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (408) -- (75,260) -- (90,359)
Dispositions of property and
equipment -- -- 8,702 -- 8,702
Advances to affiliates -- -- -- (54,473) (932,925)
Purchase of notes receivable and
security interest -- -- -- -- (225,000)
Cash received in acquisition -- -- -- -- 303,812
----------- ----------- ----------- ----------- -----------
Net cash used in
investing activities (408) -- (66,558) (54,473) (935,770)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions -- -- -- -- 103,127
Proceeds from notes payable
to shareholders -- -- 160,000 -- 160,000
Proceeds from convertible notes
payable to shareholders 300,000 -- 740,000 5,000 1,502,400
Proceeds from line-of-credit -- -- -- -- 299,505
----------- ----------- ----------- ----------- -----------
Net cash provided by
financing activities 300,000 -- 900,000 5,000 2,065,032
----------- ----------- ----------- ----------- -----------
Increase (decrease) in cash and
cash equivalents (34,110) (314) (138,771) (51,714) 96,960
Cash & cash equivalents at
beginning of period 131,070 2,955 235,731 54,355 --
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end
of period $ 96,960 $ 2,641 $ 96,960 $ 2,641 $ 96,960
=========== =========== =========== =========== ===========
5
<PAGE>
ADVANCE DISPLAY TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
March 15, 1995
(Inception)
Three Months Ended Nine Months Ended Through
March 31 March 31, March 31,
------------------------------ ----------------------------- ----------
1998 1997 1998 1997 1998
------------- ------------- ------------ ------------- ----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ -- $ -- $ 746 $ 7,122 $ 26,070
============= ============= ============ ============= ==========
Taxes $ -- $ -- $ -- $ -- $ --
============= ============= ============ ============= ==========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common Stock for acquisition
of Display Group, LLC and Display
Optics, Ltd. and conversion of
Convertible debt $ -- $ -- $ -- $ -- $2,199,026
============= ============= ============ ============= ==========
Conversion of 10% Convertible,
Redeemable Promissory Notes into
shares of the Company's Common
Stock at the rate of $0.1315 per
share or 4,182,509 shares $ -- $ -- $ 550,000 $ -- $ 550,000
============= ============= ============ ============= ==========
Conversion of short term notes and
accrued interest into Convertible,
Redeemable Promissory Notes $ -- $ -- $ 183,575 $ -- $ 183,575
============= ============= ============ ============= ==========
(See accompanying notes to unaudited consolidated financial statements)
6
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<PAGE>
ADVANCE DISPLAY TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1.
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with the instructions to Form 10-QSB and do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The results of operations
for any interim period are not necessarily indicative of results for the entire
fiscal year. These statements should be read in conjunction with the financial
statements and related notes included in Form 10-KSB for Advance Display
Technologies, Inc. ("ADTI" or "the Company")for the year ended June 30, 1997, as
the notes to these interim financial statements omit certain information
required for complete financial statements.
Note 2.
Financial statements for the periods through May 31, 1997 have been
restated - See Management's Discussion and Analysis of Results of Operations and
Financial Condition.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Special Note Regarding Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include, without limitation, statements regarding the
Company's anticipated marketing and production, need for working capital, future
revenues and results of operations. Factors that could cause actual results to
differ materially include, among others, the ability of the Company to: obtain
sufficient capital, further develop the manufacturing process for its product,
manufacture its product at a cost that would result in profitable sales, sell a
sufficient number of screens at a sufficient price to result in positive
operating margins, implement a marketing plan, attract and retain qualified
management and other personnel, and generally to successfully execute a business
plan that will take the Company from a development stage entity to a profitable
operating company. Many of these factors are outside the control of the Company.
Investors are cautioned not to put undue reliance on forward-looking statements.
Except as otherwise required by rules of the Securities and Exchange Commission,
the Company disclaims any intent or obligation to update publicly these forward-
looking statements, whether as a result of new information, future events or
otherwise.
General
In December 1993, Advance Display Technologies, Inc. ("ADTI" or "the
Company") and individual investors organized a limited partnership, Display
Optics, Ltd. (the "Partnership" or "DOL"), to obtain capital and to continue
development of the fiber optic video technology and other related display screen
technology. The Company acted as a general partner and the Partnership was
managed by Display Group, LLC. Display Group was formed by the limited partners
of the Partnership and other individuals and entities to manage and partially
fund operations of the Partnership. Display Group had no equity interest in DOL
as all interests of Display Group in DOL were in the form of convertible debt.
The Company conducted substantially all of its business through the
Partnership until the completion of an exchange effective May 21,1997 (see
below). Based on an analysis of the Partnership Agreement and generally accepted
accounting principles, a research and development arrangement existed between
the Partnership and the Company which required ADTI to record the expenses
incurred by the Partnership as a liability.
Effective May 21, 1997, the Company entered into an exchange agreement (the
"Exchange") with Display Group, DOL and the owners of Display Group and DOL (the
"Investors"). Under the terms of the Exchange and previously existing
agreements, all member interests in Display Group, partnership interests in DOL,
convertible notes totaling $1,799,026, and Series B Preferred Common Stock held
by the Investors were exchanged for 17,509,868 shares of ADTI Common Stock and
1,843,900 shares of Series C Preferred Stock issued to the Investors. The
Exchange resulted in Display Group and DOL becoming wholly-owned subsidiaries of
ADTI whereby the operations of Display Group and DOL were consolidated with
those of the Company. The Exchange resulted in the Investors acquiring in the
aggregate a direct interest in Common Stock equal to approximately eighty-two
percent (82%) of the Company's issued and outstanding Common Stock.
8
<PAGE>
The Exchange was accounted for using the purchase method of accounting. As
the former members of Display Group acquired a majority of the Company's Common
Stock, for financial statement reporting purposes, the Exchange was treated as a
reverse acquisition whereby Display Group was considered the acquiring entity.
Therefore, the financial statements for periods through May 31, 1997 have been
restated to reflect only the results of operations of Display Group. Subsequent
to May 31, 1997, the financial statements reflect the combined operations of the
Company, DOL and Display Group. Effective December 31, 1997, DOL was liquidated.
Display Group is a wholly-owned subsidiary with no operating activity except for
the ongoing pursuit of a legal claim.
Results of Operations
During the quarter ended March 31, 1998, the Company continued development
efforts on a fiber optic large display screen system, the related manufacturing
process and a marketing study and plan overview. The Company had no sales to
report for this period. Future sales are contingent on the Company's ability to
improve and further develop the product and manufacturing process and complete
and successfully execute a detailed marketing plan.
For the fiscal quarter and nine months ended March 31, 1998, the Company
reported net losses of ($322,359) and ($980,748), respectively, as compared to
($12,901) and ($31,913) for the same periods of the prior fiscal year. The
increases in fiscal 1998 from fiscal 1997 are primarily due to the restatement
of the financial statements reporting only Display Group activity through May
31, 1997 and the inclusion of operational activity of the combined entities for
the first nine months of the current fiscal year.
The Company reported total revenue of $0 and $30,000 for the fiscal quarter
and nine months ended March 31, 1998. Revenue from the nine months ended March
31, 1998, consisted entirely of consulting fees pursuant to an agreement with
Toshiba Lighting and Technology Corporation ("TLT") effective July 1, 1997. The
agreement called for the Company to provide market research information for
consideration of $5,000 per month. This agreement expired on December 31, 1997.
The Company reported total revenue of $31,566 and $84,528 for the fiscal quarter
and nine months ended March 31, 1997, respectively, which consisted entirely of
interest income from loans made by Display Group to the Partnership. These loans
were converted to equity of the Company effective May 21, 1997 pursuant to the
Exchange described above. Therefore, there was no related party interest income
reported for the fiscal quarter and nine months ended March 31, 1998. There were
no sales of the Company's products to report for the quarter or nine month
period ended March 31, 1998.
The Company reported general and administrative ("G&A")expenses of $218,035
and $741,015, respectively for the quarter and nine months ended March 31, 1998,
respectively, and $314 and $2,240 for the quarter and nine months ended March
31, 1997, respectively. The Company also reported research and development
("R&D") expenses of $85,398 and $211,923 for the quarter and nine months ended
March 31, 1998, respectively. There were no research and development expenses
reported for the quarter and nine months ended March 31, 1997. These increases
in the current fiscal periods from amounts reported for the same periods of the
prior fiscal year were primarily due to the restatement of the financial
statements reporting only Display Group activity through May 31, 1997 and the
inclusion of operational activity of the combined entities for the first nine
months of the current fiscal year. G&A expenses for the fiscal quarter and nine
months ended March 31, 1998, respectively, included: 1) depreciation and
9
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amortization of approximately $30,000 and $83,000; 2) promotional and travel
expenses of approximately $5,000 and $34,000; 3) general office expense of
approximately $31,000 and $94,000; 4) employee salaries and expenses of
approximately $72,000 and $270,000; and 5) professional and consulting fees of
approximately $80,000 and $260,000 (primarily due to legal fees incurred in
connection with the Exchange transaction and ongoing litigation, and accounting
fees in connection with the audit of the Company's financial statements for the
fiscal year ended June 30, 1997 and the audit of financial statements of DOL and
Display Group in connection with the Exchange).
Interest expense decreased from $44,153 and $114,201 for the fiscal quarter
and nine months ended March 31, 1997, respectively, to $18,926 and $46,383 for
the same periods of the current fiscal year, respectively. This decrease was
primarily due to a reduction in debt due to the conversion of notes into equity
per the Exchange.
Liquidity and Capital Resources
Due to significant costs associated with development and marketing of the
Company's products and the lack of material sales to date, the Company has
experienced a continuing need for financing since the 1980's. This need became
particularly acute beginning in 1989, following protracted litigation over the
Company's technology. The Company's operations were essentially dormant from
approximately 1990 to 1993. In fiscal 1994, ADTI formed the Partnership to
obtain capital to continue development of its technology. (See General, above.)
The Company and its subsidiaries have been totally dependent on financing
from outside sources to fund operations for more than four years. At March 31,
1998, the Company reported negative net worth of $697,612 and negative working
capital of $408,724. The Company will require additional capital for
administrative expenses, continued development of the product and manufacturing
process, marketing costs and other costs. Management believes that the Company's
continued existence is dependent upon its ability to: 1) improve and further
develop the product and the related manufacturing process; 2) successfully
market the product; 3) obtain additional funding through outside sources; and 4)
achieve and maintain profitable operations. Although management is attempting to
achieve these objectives, there can be no assurance that the Company will be
able to obtain sufficient additional capital or manufacture or sell its products
on terms and conditions satisfactory to the Company.
Cash flow from financing activities for the fiscal quarter and nine months
ended March 31, 1998 consisted entirely of loans to the Company from two
shareholders totaling $0 and $160,000 respectively, and the issuance of
convertible, redeemable promissory notes totaling $300,000 and $740,000,
respectively. Proceeds from financing activities during the nine months ended
March 31, 1998 were primarily used for manufacturing a 7'x9' screen, ongoing
product and manufacturing process development, operating expenses and
investments in capital equipment.
On February 4, 1998, the Company completed an additional private placement
offered to qualified investors. The private placement provided for the issuance
of a minimum of $300,000 and a maximum of $650,000 of 10% Convertible,
Redeemable Promissory Notes (the "Notes") issuable in increments of $10,000. The
Notes are due October 15, 2000 and are convertible, at the option of the
noteholder, into shares of the Company's Common Stock at the rate of $0.1615 per
10
<PAGE>
share. The Company has the right to call these Notes after one year and the
noteholders have 30 days in which to convert if these Notes are called by the
Company. The Company may elect to pay interest on any of these Notes converted
in cash or by issuance of additional shares of the Company's Common Stock. On
February 4, 1998, the Company sold $300,000 of these Convertible, Redeemable
Promissory Notes to two existing shareholders.
ADTI reported a working capital deficit position at March 31, 1998. Current
liabilities exceeded current assets by $408,724. At March 31, 1998, current
liabilities consisted entirely of trade payables and accrued expenses which were
incurred due to litigation costs, costs of the Exchange, costs associated with
the various private offerings and operating costs.
The Company's working capital deficit position improved at March 31, 1998
from June 30, 1997 by approximately $463,000 due to the conversion of short-term
convertible debt on October 14, 1997 and the subsequent issuance of new
convertible debt with terms in excess of one year as discussed above.
The Company's efforts will continue to be focused on further development of
a fiber optic large display screen system and the related manufacturing process.
During the quarter ended March 31, 1998 the Company completed a marketing study
and marketing plan overview. The Company plans to complete a detailed marketing
plan as development of the product and related manufacturing process progresses.
In addition, the Company will continue efforts on raising additional capital
through private placements or other sources. There can be no assurances that the
Company will be able to acquire the capital needed or be successful in achieving
any of these objectives.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
As of the date of this report, no assessment has been made as to the
effects of the Year 2000 Issue on the Company. Therefore, the Company is unable
to determine whether the Year 2000 Issue will materially affect the Company's
operating ability, future financial results, or cause reported financial
information not to be necessarily indicative of future operating results or
future financial condition.
The Company intends to initiate an assessment of the potential impact of
the Year 2000 Issue on the Company's business in the future.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
On February 4, 1998, the Company sold additional securities pursuant to a
private placement in transactions exempt from the registration requirements of
the 1933 Act. The Company sold 10% Convertible, Redeemable Promissory Notes in
the aggregate principal amount of $300,000, to accredited investors pursuant to
the provisions of Regulation D, Rule 506 of the 1933 Act. The Company received
all cash from this offering. The notes issued pursuant to the offering will be
due October 15, 2000 and are convertible, at the option of the noteholder, into
shares of the Company's Common Stock at the rate of $0.1615 per share. The
Company has the right to call these notes after approximately one year from the
date of issuance and the noteholders will have 30 days in which to convert if
these notes are called by the Company. The Company may elect to pay interest on
any of these notes converted in cash or by issuance of additional shares of the
Company's Common Stock.
ITEM 3. DEFAULTS ON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None.
12
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.
ADVANCE DISPLAY TECHNOLOGIES, INC.
(Registrant)
Date: May 7, 1998 /S/ Kenneth P. Warner
----------- ---------------------
Kenneth P. Warner
President and Chief Executive Officer
(Chief Executive and Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 96,960
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 105,497
<CURRENT-ASSETS> 225,064
<PP&E> 142,934
<DEPRECIATION> 29,120
<TOTAL-ASSETS> 809,901
<CURRENT-LIABILITIES> 633,788
<BONDS> 0
0
1,844
<COMMON> 25,176
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 809,901
<SALES> 0
<TOTAL-REVENUES> 30,000
<CGS> 0
<TOTAL-COSTS> 1,010,748
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46,383
<INCOME-PRETAX> (980,748)
<INCOME-TAX> 0
<INCOME-CONTINUING> (980,748)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (980,748)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
