SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31 1997
Commission File Number 2-98684-NY
NEW SKY COMMUNICATIONS, INC.
----------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 16-1229730
-------- ----------
State of Incorporation Identification Number
16 East Main Street
Suite 720
Rochester, New York 14614
-------------------------
Address of principal and executive offices
(716) 454-5490
--------------
Registrant's telephone number
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: None
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS REGISTERED ON
- ------------------- -------------
Common Stock National Daily Quotation
Listing Service
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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
--- ---
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1997.............................. $ 1,427,000.00
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of December 31, 1997............................... 190,736,923
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Articles of Incorporation By-Laws
<PAGE>
PART 1
ITEM 1 - BUSINESS
-----------------
New Sky Communications, Incorporated (the "Company") develops and produces
theatrical motion pictures and home video cassettes.
In 1997, the Company entered into a joint venture agreement with Syracuse
Productions, LLC to Co-Produce a feature film entitled "FREAK TALKS ABOUT SEX"
(originally "SYRACUSE MUSE"). The Company is a special limited partner in the
financing limited partnership for the film and is entitled to one-third of the
profits from the sale of the film after the investors receive their investment
plus a twenty percent (20%) return on their investment. The Company may not
disclose the budget or cost of the film for proprietary reasons, but the film
qualifies as a "low-budget" film. Principal photography of the film was
completed in 1997 and at year-end the film was being edited and mixed. The Joint
Venture Agreement has been previously filed as an Exhibit in an earlier 10Q for
the Company. To procure the Company's position as Co-Producer of the film, it
issued 20,000,000 common shares of stock in the Company, with restrictive
legend, to Charles M. LaLoggia in 1997. Mr. LaLoggia is the former President and
Chairman of the Company. Mr. LaLoggia was the original Executive Producer of the
film and is a significant investor in the financing limited partnership. The
Company has capitalized the market value cost of the issuance of the stock,
$100,000, under "Film Inventory" on the Balance Sheet. The Company received a
Producer's fee of $20,000 from the budget of the film in 1997.
The Company is also participating in the development of other film properties
with the principals of Syracuse Productions, LLC.
In fiscal 1997, the Company's first feature film "LADY IN WHITE" continued its
release on video cassette and in foreign markets. All of the funds received by
the Company in 1997 from the film, approximately $5,946, were recognized as
income in 1997. The Company carries its direct film costs as an asset on the
Balance Sheet under "Film Inventory". In 1991, the Company accelerated its
amortization of the costs of the film to the rate of $600,000 per year to arrive
at a target of $500,000 in Film Inventory for the film by 1993. in 1997 the
Company amortized another $100,000 of the film's costs', leaving $200,000 in
Film Inventory for the film,
The Company continued to develop and seek financing for another film project, a
comedy, tentatively entitled "RESPECT YOUR GODFATHER"- At year-end the
accumulated development cost of the film was capitalized at $26,772.
Page 1
<PAGE>
The Company continued to develop and seek financing for its feature film,
tentatively entitled "THE GIANT", in 1997. At year-end the accumulated
development cost was written down to $750,000.
In 1989 the Company invested $250,000 in a film entitled "GRAVE SECRETS",
production of which was completed in 1989. Foreign and video sales of the film
commenced in late 1989 and continued throughout 1997. The company receives a
priority repayment of its investment and has the personal guarantee of the
producer of the film. The Company anticipates receiving the return of its
investment, but does not anticipate realizing any profit on the film. During
1997, the Company received no proceeds from the Film's producer, keeping the
Company's investment to $108,610 at year-end.
The Company also issued 10,000,000 common shares of the Company, with
restrictive legend, to Carl R. Reynolds, the President and Chairman to
compensate him for failing to receive regular compensation for over three years.
The Company also issued 3,000,000 shares of common stock to Colleen Tiffany for
financial public relations services to be rendered to the Company. Ms. Tiffany
is associated with the President, Carl R. Reynolds, in a financial public
relations company, Logan Consulting Group, Inc. However, the shares were issued
to Ms. Tiffany personally and Mr. Reynolds will receive no benefit or share in
the proceeds of the sale of any stock by Ms. Tiffany. The Company also issued
4,000,000 common shares of the Company to Starr Securities, Inc. for investment
banking services to be rendered to the Company. Both issuances of shares were
registered under an S-8 registration with the S.E.C. and are, therefore,
immediately free trading. The agreements with Ms. Tiffany and Starr Securities
were attached as Exhibits in 10Q's filed by the Company during 1997.
This 10K filing was not timely made as the Company's accountant was unable to
complete an audit of its books and records on time.
The Company has filed corporate income tax returns, federal and New York State,
for the years ended December 31, 1997, 1996 and 1995, but has not filed for
years ending December 31, 1992, 1993 and 1994. It has not paid any tax due for
any of these years. Although the Company believes there is no federal tax
liability for those years, due to its continuing losses, there is tax liability
to the State of New York. The Company has not paid those taxes for lack of
funds. The Company reports the expected tax liability as an "Accrued Expense".
The Company also wrote down development costs in other film projects it has been
attempting to develop for a number of years, including "SOMEWHERE IS CALLING"
($15,000), "ARREVIDERCI VENICE" ($30,771) and "CHEAP TRICKS" ($1,000,00).
Page 2
<PAGE>
ITEM 2 - PROPERTIES
-------------------
The company currently rents no office space.
ITEM 3 - LEGAL PROCEEDINGS
--------------------------
The Company was unable to pay the final several months of rent on the premises
it leased at One West Main Street and the landlord has taken a judgment against
the Company in the Supreme Court of the State of New York on February 24, 1993
in the amount of $16,383.
ITEM 4 - SUBMISSION OF MATTERS
------------------------------
TO A VOTE OF SECURITY HOLDERS
-----------------------------
The Company lacked sufficient funds to hold a shareholders' meeting in 1997.
Therefore, no matters were submitted to the shareholders for a vote.
PART II
ITEM 5 - MARKET FOR THE COMPANY'S COMMON STOCK
----------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------
Effective October 25, 1989 the Company's stock was deleted from NASDAQ listing.
Since that date, the Company's stock trading has been reported on the National
Daily Quotation Listing Service, or "pink sheets" or "bulletin board". Since
there is no readily ascertainable high or low quotes for each quarters none are
reported here,
The approximate number of shareholders of common stock is 4,500 as of December
31, 1997.
The Company has never paid a dividend on its common stock.
Page 3
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------
The following table summarizes selected financial information of New Sky
Communications, Inc. for each of the five years ended December 31, 1997, 1996,
1995, 1994 god 1993. This table should be read in conjunction with other
financial information of New Sky Communications, Inc., including "Management's
Discussion and Analysis" and financial statements included elsewhere herein.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------- -------------------- -------------------- --------------------- --------------
1997 1996 1995 1994 1993
------------------- -------------------- -------------------- --------------------- --------------
<S> <C> <C> <C> <C> <C>
Net Sales $25,946 $13,729 $16,860 $334 $19,275
Income (loss) from continuing
Operations (454,562) (157,416) (138,734) (47,367) (846,795)
Income (loss) from continuing
Operations per share (A) NIL NIL NIL NIL NIL
Cash Dividends NONE NONE NONE NONE NONE
Net working capital (147,582) (142,225) (125,265) (106,631) (94,264)
Total assets 1,251,116 1,508,415 1,647,821 1,767,821 1,802,821
Long-term debt 0 0 0 0 0
<FN>
Note A: Amounts are not presented as such amounts were less than $.01 per share.
</FN>
</TABLE>
Page 4
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS
---------------------------------------------
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
-------------------------------------------------
During the Year, the Company received continuing foreign distribution royalties
from The Samuel Goldwyn Company for "LADY IN WHITE" in the amount of $5,946.
During 1997, the Company received no funds from Planet Productions, Inc. from
receipts on the film "GRAVE SECRETS".
The Company received a Producer's fee of $20,000 from the budget of the film
"FREAK TALKS ABOUT SEX" during 1997.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
(a) The following documents are filed as part of this report:
1.FINANCIAL STATEMENTS:
---------------------
Statements of Income - Year ended December 31, 1994, December 31,
1995, December 31, 1996 and December 31, 1997.
Statement of Stockholders Equity - December 31, 1994, December
31, 1995, December 31, 1996 and December 31, 1997.
Statement of Cash Flows - Years ended December 31, 1994, December
31, 1995, December 31, 1996 and December 31, 1997.
Notes to Financial Statements
Balance Sheet - December 31, 1994, December 31, 1995, December
31, 1996 and December 31, 1997.
Page 5
<PAGE>
Michael F. Cronin
Certified Public Accountant
12 Blandford Lane
Fairport New York 14450
Shareholders
New Sky Communications. Inc.
Rochester, Now York
I have audited the accompanying balance sheet of New Sky Communications, Inc. as
of December 31, 1997, 1996, 1995 and 1994 and the related statements of income,
stockholders! equity and cash flows for the years and then ended. The financial
statements are the responsibility of the Company's management. My responsibility
Is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are of material misstatement.
An audit includes examining. on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. I believe that
my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of New Sky Communications, Inc. as of
December 31, 1997, 1996, 1995 and 1994 and the results of Its operations and
cash flows for the fiscal years then ended in conformity with generally accepted
accounting principles.
April 17,1998
/s/ Michael F. Cronin
Michael F. Cronin
Certified Public Accountant
Page 6
<PAGE>
<TABLE>
<CAPTION>
NEW SKY COMMUNICATIONS, INC.
BALANCE SHEETS
ASSETS
------
DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- ----------------- ----------------- -----------------
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash and Cash Equivalents $ 56 $ 1,150 $ 0 $ 0
Accounts Receivable Trade 0 0 0 0
Prepaid Expenses 0 0 0 0
----------- ----------- ----------- -----------
Total Current Assets $ 56 $ 1,150 0 0
Property & Equipment, Net of Accumulated
Depreciation and Amortization (Note A) 1,250,660 1,506,865 1,591,865 1,711,865
Other Assets (Note B) 400 400 55,956 55,956
Total Assets $ 1,251,116 $ 1,508,415 $ 1,647,821 $ 1,767,821
=========== =========== =========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
-----------
CURRENT LIABILITIES:
Accounts Payable $ 106,554 $ 94,291 $ 88,781 $ 75,047
Other Current Liabilities 41,084 49,084 36,584 31,584
----------- ----------- ----------- -----------
Total Current Liabilities 147,638 143,375 125,365 106,631
Stockholders' Equity
Common Stock 5,951,402 5,756,402 5,756,402 5,756,402
Accumulated Deficit (4,847,924) (4,391,362) (4,233,946) (4,095,212)
----------- ----------- ----------- -----------
Total Stockholder's Equity 1,103,478 1,365,040 1,522,456 1,661,190
Total Liabilities & Stockholders' Equity $ 1,251,116 $ 1,508,415 $ 1,647,821 $ 1,767,821
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
Page 7
<PAGE>
<TABLE>
<CAPTION>
NEW SKY COMMUNICATIONS, INC.
INCOME STATEMENTS
FISCAL YEARS ENDED
------------------
DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net Sales $ 25,946 $ 13,729 $ 16,860 $ 334
Costs & Expenses Applicable
to Sales & Revenue (Note A) 428,482 85,000 120,000 0
--------- --------- --------- --------
Gross Profit (Loss) (400,536) (71,271) (103,140) 334
Selling, General &
Administrative Expenses 54,026 28,089 30,594 47,701
--------- --------- --------- --------
Income From Operations (454,562) (99,360) (133,734) (47,367)
Other Expense-Write Down
Carrying Value of Investments 0 55,556 0 0
--------- --------- --------- --------
Income (Loss) Before Income Taxes (454,562) (154,916) (133,734) (47,367)
Income Taxes (Note A) 2,000 2,500 5,000 0
--------- --------- --------- --------
Net Income (Loss) $(456,562) $(157,416) $(138,734) $(47,367)
========= ========= ========= ========
Per Share Amounts NIL NIL NIL NIL
</TABLE>
See Notes to Financial Statements
Page 8
<PAGE>
<TABLE>
<CAPTION>
NEW SKY COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED
------------------
DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- ----------------- ----------------- -----------------
OPERATING ACTIVITIES:
- ---------------------
<S> <C> <C> <C> <C>
Net Income (Loss) $(456,562) $(157,416) $(138,734) $(47,367)
Adjustments to Reconcile Net
Income (Loss) to Cash
Provided (consumed) by
Operating Activities:
Non-Cash Valuation Adjustment 0 55,556 0 0
Non-Cash Operating Expenses 25,000 0 0 0
Changes in Operating Assets
and Liabilities:
(Increase) Decrease in
Accounts & Notes Receivable 0 0 0 0
Amortization of Film
Inventory Costs 426,205 85,000 120,000 0
Increase (Decrease) in
Accounts Payable & Accrued
Expenses 4,263 8,010 18,734 (12,367)
--------- --------- --------- --------
Net Cash Provided (Consumed)
by Operating Activities (1,094) (8,850) 0 (35,000)
INVESTING ACTIVITIES:
--------
Reimbursement Received on
Investment in Film Inventory 0 5,000 0 35,000
--------- --------- --------- --------
0
Net Cash Used in Investing
Activities 5,000 0 35,000
FINANCING ACTIVITIES:
--------
Proceeds of Loan 0 10,000 0 0
--------- --------- --------- --------
0
Net Cash Provided (Used) by
Financing Activities 10,000 0 0
Net Change in Cash (1,094) 1,150 0 0
Cash & Cash Equivalents at
the Beginning of Period 1,150 0 0
--------- --------- --------- --------
Cash & Cash Equivalents at
the End of Period $ 56 $ 1,150 $ 0 $ 0
========= ========= ========= ========
</TABLE>
See Notes to Financial Statements.
Page 9
<PAGE>
<TABLE>
<CAPTION>
NEW SKY COMMUNICATIONS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
ACCUMULATED
COMMON STOCK DEFICIT
-------------------------------------------------------- -----------
Number of Shares Par Value Capital in Excess
of Par Value
---------------- ---------- -----------------
<S> <C> <C> <C> <C>
December 31, 1992 142,736,923 $14,274 $5,742,128 $(3,201,050)
Net Loss December 31, 1993 (846,795)
----------- ------- ---------- -----------
December 31, 1993 142,736,923 14,274 5,742,128 (4,047,845)
Net Loss December 31, 1994 (47,367)
----------- ------- ---------- -----------
December 31, 1994 142,736,923 14,274 5,742,128 (4,095,212)
Net Loss December 31, 1995 (138,734)
----------- ------- ---------- -----------
December 31, 1995 142,736,923 14,274 5,742,128 (4,233,946)
Net Loss December 31, 1996 (157,416)
----------- ------- ---------- -----------
December 31, 1996 142,736,923 14,274 5,742,128 (4,391,362)
Shares issued For Services 48,000,000 4,800 190,200
Net Loss December 31, 1997 (456,562)
----------- ------- ---------- -----------
Balance December 31, 1997 190,736,923 $19,074 $5,932,328 $(4,847,924)
=========== ======= ========== ===========
</TABLE>
See Notes To Financial Statements.
Page 10
<PAGE>
NEW SKY COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
A. Summary of Significant Accounting Policies:
1. REVENUE AND EXPENSE RECOGNITION: Revenue is recognized when earned
rather than when received. Expenses are charged to operations as
incurred.
2. PROPERTY & EQUIPMENT are recorded on the basis of cost. Depreciation
is computed using the straight-line method over the estimated useful
lives of the assets. Expenditures for renewals and betterment's are
capitalized. Expenditures for repairs and maintenance are charged to
operations as incurred. Gain or loss upon sale or retirement due to
obsolescence is reflected in the operating results in the period the
event takes place. Film production costs are capitalized as film cost
inventory and have been amortized using the
individual-film-forecast-computation method over the licensing period.
Film inventory consists of the following:
DEC. 31,1997 DEC. 31,1996 DEC. 31,1995 DEC. 31,1994
------------ ------------ ------------ -------------
Films Released $ 308,611 $ 408,611 $ 524,214 $ 644,214
Films in Process 915,277 1,029,712 1,029,712 1,029,712
Story Rights & Scenarios 26,772 68,542 37,939 37,939
---------- ---------- ---------- ----------
Total Film Inventory $1,250,660 $l,506,865 $1,591,885 $1,711,865
========== ========== ========== ==========
B. Other Assets.
Other Assets consist of real estate mortgages held for investment and
unamortized organization costs. In 1996 management revised its estimate of the
recoverability of its investments resulting In a one time charge to earnings
of $ 55,556.
C. Income Taxes.
The Corporation has $ 4,735,663 in net operating loss carryovers available to
reduce future income taxes. These carryovers may be utilized through the year
2012. Generally Accepted Accounting Principles require the recognition of
deferred tax assets resulting from the future reduction in taxes as this net
operating loss is applied against future taxable income. Management has
elected not to recognize this asset due to its estimate of the uncertainty of
the realization of its future financial benefit.
Page 11
<PAGE>
ITEM 9 - DISAGREEMENTS ON ACCOUNTING
------------------------------------
AND FINANCIAL DISCLOSURE
------------------------
None.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
--------- -----------------------------------------------
The names of the Directors and Executive officers of the Company are as follows:
NAME AGE POSITION
---- --- --------
Carl R. Reynolds 50 Chairman of the Board
100 Caversham Woods President
Pittsford, NY 14534
History of Officers and Directors:
CARL R. REYNOLDS: Chairman of the Board, President and Director of the Company.
Mr. Reynolds is an attorney and an accountant. He is a Director of FNB Rochester
Corp. and First National Bank of Rochester, Inc. He has been a Director and
Officer of the Company since inception.
All Directors of the Company will hold office until the next annual meeting of
shareholders and until their successors have been duly elected and qualified.
The executive officers of the Company are elected by the Board of Directors and
bold office at the will of the Board. The Company has not held an annual meeting
since 1989 due to lack of funds to hold such a meeting,
The Company presently has no Executive Committee or Audit Committee.
Page 12
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION
--------------------------------
The executives of the Company received Compensation in 1997 in the following
amounts:
NAME CAPACITY CASH COMPENSATION
---- -------- -----------------
Carl R. Reynolds President, Director $ 18,900.00
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN
---------------------------------------
BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------
The following table sets forth the number and percentage of shares of Common
Stock beneficially owned by the directors and principal shareholders (those
owning more than 5% of the Company's outstanding Common Stock) of the Company
and any by all officers and directors as a group as of December 31, 1997.
COMMON % COMMON
SHARES SHARES
NAME OWNED OWNED
---- ----- -----
Carl R. Reynolds 11,000,000 5.7%
Charles M. LaLoggia 22,050,000 11.5%
All Officers & Directors
& Principal Shareholders
as a Group 33,050,000 17.2%
ITEM 13 - CERTAIN RELATIONSHIPS TRANSACTIONS
--------------------------------------------
See ITEM 1 - BUSINESS.
ITEM 14- EXHIBITS, FINANCIAL STATEMENT
--------------------------------------
SCHEDULES AND REPORTS ON FORM 8-K
---------------------------------
(a) The following documents are filed as part of this report:
PAGE(S)
-------
1. Financial Statement Schedules: For the years
ended December 31, 1994, December 31, 1995,
December 31, 1996 and December 31 1997 in
accordance with Rule 5.04 of regulation S-X. 6-11
Page 13
<PAGE>
All other schedules are omitted because they are not applicable
or required Information is shown in financial statements or
notes thereto.
2. EXHIBITS
--------
1. Articles of Organization, as amended (incorporated by
reference to exhibit 3.1 to the Company's Registration
Statements No. 2-98684-NY on Form S-18).
2. By-laws, as amended (incorporated by reference to exhibit 3.2
to the Company's Registration Statement No. 2-98684-NY on
Form S-18).
3. Agreement dated July 31, 1997 with Starr Securities, Inc.
(incorporated by reference from Company's Form 1OQ for
September 30, 1997).
4. Agreement dated November 7, 1996 with Charles M. LaLoggia
(incorporated by reference from Company's Form 1OQ for March
31, 1997).
5. Agreement dated July 2, 1996 with Frank LaLoggia
(incorporated by reference from Company's Form 1OQ for June
30, 1996).
3. FINANCIAL STATEMENT SCHEDULES - The required schedules are filed
herewith and incorporated by reference.
4. FORM 8-K - Form 8-K with Agreements dated April 18, 1997 with Charles
M. LaLoggia, dated May 12, 1997 with Syracuse Productions, LLC, and dated June
16, 1997 with Colleen Tiffany was filed on June 16, 1997 with the S.E.C. and is
incorporated herein by reference.
Page 14
<PAGE>
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 to be signed on its
behalf by the undersigned, thereunto duly authorized.
NEW SKY COMMUNICATIONS, INC.
(Registrant)
By: /s/ Carl R. Reynolds
--------------------------------
April 28, 1998 President
- ------------------------------ --------------------------------
(Date) (Signature and Title)
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 an don the date indicated.
/s/ Carl R. Reynolds
- ---------------------------------
Director
- ---------------------------------
(Signature and Title)
April 28, 1998
- ---------------------------------
(Date)
Page 15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000771999
<NAME> NEW SKY COMMUNICATIONS, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 56
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 56
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,251,116
<CURRENT-LIABILITIES> 147,638
<BONDS> 0
<COMMON> 19,074
0
0
<OTHER-SE> 1,084,404
<TOTAL-LIABILITY-AND-EQUITY> 1,251,116
<SALES> 25,946
<TOTAL-REVENUES> 25,946
<CGS> 426,482
<TOTAL-COSTS> 54,026
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (454,456)
<INCOME-TAX> 2,000
<INCOME-CONTINUING> (456,562)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (456,562)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
