SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
-------- --------
Commission File No. 2-98747-D
OXFORD CAPITAL CORP.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 87-0421454
- -------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4245 North Central Expressway, Suite 300, Dallas, Texas 75205
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 520-0100
-------------------------
(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 No X
As of January 15, 1999, 10,334,668 shares of Common Stock of the issuer
were outstanding.
<PAGE>
OXFORD CAPITAL CORP.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1998
and June 30, 1998.............................................. 3
Consolidated Statements of Operations - For the three
months ended September 30, 1998 and 1997........................ 5
Consolidated Statements of Cash Flows - For the three months
ended September 30, 1998 and 1997 .............................. 6
Notes to Consolidated Financial Statements...................... 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 10
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities................................. 14
Item 6. Exhibits and Reports on Form 8-K................................ 14
SIGNATURES............................................................... 15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OXFORD CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 1998 June 30, 1998
------------------ -------------
Assets
Current assets:
Cash $ 554,334 $ 47,488
Accrued payroll receivable 1,542,810 2,313,668
Accounts receivable, net 466,904 610,476
Prepaid expenses and other assets 302,571 64,194
Net assets of discontinued operations and
assets held for disposition 32,325 32,325
--------- ---------
Total current assets 2,898,944 3,068,151
--------- ---------
Furniture, fixtures and equipment, net 420,102 427,119
--------- ---------
Other assets:
Goodwill, net 4,982,377 5,122,589
Covenant not to compete, net 16,991 31,991
Receivable from related party 51,888 124,388
--------- ---------
Total other assets 5,051,256 5,278,968
--------- ---------
Total assets $ 8,370,302 $ 8,774,238
========= =========
See Notes to Financial Statements
3
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Cont'd)
September 30, 1998 June 30, 1998
------------------ -------------
Liabilities and Shareholders' Equity
Current liabilities
Bank overdraft $ 91,996 $ 201,497
Accrued payroll payable 1,526,482 2,246,288
Accounts payable - trade 488,939 232,099
Accrued expenses 2,955,629 1,867,419
Payroll taxes payable 4,248,349 4,922,187
Payable to related parties 816,513 733,311
Current portion of capital lease 5,362 5,150
Current portion of long-term debt 68,921 23,215
Notes payable 4,637,113 4,696,836
---------- ----------
Total current liabilities 14,839,304 14,928,002
---------- ----------
Long-term debt
Capital lease 11,131 12,343
Other obligation 459,076 463,739
---------- ----------
Total liabilities 15,309,511 15,404,084
---------- ----------
Shareholders' Equity
Preferred stock 0 0
Common stock 10,335 10,335
Additional paid-in capital 1,393,204 1,393,204
Retained deficit (8,342,748) (8,033,385)
---------- ----------
Total shareholders' equity (6,939,209) (6,629,846)
---------- ----------
Total liabilities and shareholders' equity $ 8,370,302 $ 8,774,238
========== ==========
See Notes to Financial Statements
4
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months
Ended September 30,
-----------------------
1998 1997
---- ----
Revenues
Management fees $ 90,000 $ 279,767
Employee leasing revenues 26,182,482 7,941,810
---------- ---------
Total revenues 26,272,482 8,221,577
Cost of revenues 24,952,471 7,690,836
---------- ---------
Gross profit 1,320,011 530,741
General and administrative 932,212 709,222
Sales and marketing 323,086 107,450
---------- ---------
64,713 (285,931)
Amortization 155,222 36,614
Depreciation 39,622 11,043
IRS penalties and interest 75,000 158,536
Interest 104,232 31,032
---------- ---------
Loss from continuing operations (309,363) (523,156)
Income tax expense 0 0
---------- ---------
Net loss from continuing operations (309,363) (523,156)
Loss from discontinued operations 0 (173,017)
---------- ---------
Net loss $ (309,363) $ (696,173)
========== =========
Weighted average shares outstanding 10,334,668 33,064,284
========== =========
Basic loss per share $ (0.03) $ (0.02)
========== =========
See Notes to Financial Statements
5
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended September 30,
--------------------------------
1998 1997
---------------- --------------
Cash Flow From Operating Activities:
Net Loss $ (309,363) $ (696,173)
Adjustments to reconcile net loss with net
cash provided by (used in) operating activities
Depreciation and amortization 194,844 47,657
Inventory write-down - 53,495
(Increase) decrease in:
Accrued payroll receivable 770,858 415,860
Accounts receivable 143,572 (657,509)
Accounts receivable - related party 72,500 34,667
Prepaid expenses (238,377) (60,197)
Increase (decrease) in:
Accounts payable - trade 256,840 55,294
Accrued payroll (719,806) 16,205
Accrued expenses 1,088,210 260,530
Payroll taxes payable (673,838) 276,086
Payable to related parties 83,202 234,952
--------- ---------
Net cash provided by operating activities 668,641 (19,132)
--------- ---------
Cash Flows From Investing Activities:
Purchases of furniture and equipment (32,616) (19,804)
Increase in deferred acquisition costs - (20,000)
Decrease in accounts receivable - Crest - 13,917
--------- ---------
Net cash (used in) investing activities (32,616) (25,887)
--------- ---------
Cash Flows From Financing Activities:
Increase (decrease) in bank overdraft (109,501) (73,226)
Reduction of debt (19,678) (12,599)
--------- ---------
Net cash (used in) investing activities (129,179) (85,825)
--------- ---------
Increase in cash 506,846 (130,844)
Beginning cash 47,488 437,410
--------- ---------
Ending cash $ 554,334 $ 306,566
========= =========
See Notes to Financial Statements
6
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Cont'd)
Three Months Ended September 30,
--------------------------------
1998 1997
------------- --------------
Supplemental disclosures of cash flow
information
Interest paid $ 11,459 $ 12,425
========== =========
Income tax paid $ 0 $ 0
========== =========
Non cash investing and financing activities
Purchase of goodwill by issuance
of short-term and long-term debt $ 0 $4,460,102
========== =========
Purchase of furniture and equipment by
issuance of long-term debt $ 0 $ 127,379
========== =========
See Notes to Financial Statements
7
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. INTERIM PRESENTATION
The accompanying interim consolidated financial statements are prepared in
accordance with generally accepted accounting principles for interim
financial information and with instructions for Form 10-QSB and Rule 10-01
of Regulation S-X. The June 30, 1998 balance sheet data was derived from
audited financial statements included in Form 10-KSB dated June 30, 1998.
The interim financial statements and notes thereto do not include all
information required by generally accepted accounting principles for
complete financial statements and should be read in conjunction with the
financial statements included in Form 10-KSB for the period ended June 30,
1998. The interim financial statements reflect all adjustments of a normal
recurring nature which are, in the opinion of management, necessary for a
fair presentation of the financial position, results of operations and of
cash flows for the interim periods presented.
2. PRO FORMA INFORMATION
During fiscal 1998, Oxford expanded its employee leasing operations through
the acquisitions of (1) PRC Enterprises, Inc. ("PRC")effective September 1,
1997, (2) Crest Outsourcing, Inc. ("Crest") effective October 1, 1997, and
(3) Webster Leasing, Inc. ("Webster") effective December 1, 1997, and
through a management arrangement with United Staffing Corporation ("USC").
In addition to the aforementioned acquisitions during fiscal 1997,
management discontinued the operations of Safety and Fatigue Consultants
International, Inc. ("SFCI") and SFCI's 60% owned subsidiary, The Institute
of Sleep and Neuroscience, Inc. ("ISN"), effective as of December 31, 1997.
Expenses incurred by SFCI and ISN are included in the statement of
operations for the three month period September 30, 1997 as a loss from
discontinued operations.
The following unaudited pro forma financial information gives effect to the
combined historical results of operations of the Company, PRC, Crest and
Webster for the three months ended September 30, 1997, and assumes that the
acquisitions had been effective as of the beginning of such period. The pro
forma information is not indicative of the actual results which would have
occurred had the acquisitions been consummated at the beginning of such
period, or of future operations of the Company. The pro forma financial
information is based on the purchase method of accounting and reflects
adjustments to eliminate non-recurring expenses, to amortize the excess
purchase price over the underlying value of net assets and to reflect
additional interest expense.
Revenue $ 26,250,519
Net Loss $ (586,204)
Loss Per Share $ (0.02)
8
<PAGE>
OXFORD CAPITAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Cont'd)
3. COMMITMENTS AND CONTINGENCIES
On February 25, 1998, suit was filed by the Company in the U.S. District
Court for the Northern District of Texas in a case styled, Oxford Capital
Corp. v. United States, (Docket No. 3-98CV0501-AH). In that suit, the
Company sought injunctive relief from an alleged wrongful levy against the
Company by the Internal Revenue Service ("IRS") relating to alleged payroll
tax obligations of the Company's subsidiary, Rx Staffing Corporation. The
IRS had, prior to the filing of the suit, levied bank accounts of Oxford
Capital Corp. alleging that it was the nominee, alter ego, agent and/or
holder of a beneficial interest of Rx Staffing. The alleged payroll tax
deficiency of Rx Staffing is in excess of $4 million.
The court issued a temporary restraining order on March 9, 1998, which was
then superceded after hearing, by the court's denial of a temporary
injunction on March 19, 1998. After a trial on the merits on August 7,
1998, the court denied the Company a permanent injunction and found that
the levy was appropriate. The Company filed a notice of appeal on October
5, 1998, and is appealing the judgment to the Fifth Circuit Court of
Appeals.
In February of 1998, suit was filed against the Company=s subsidiaries, Rx
Staffing, PRC, and Webster, in the District Court of Dallas County, Texas,
191st Judicial District, in a case styled, Liberty Mutual Fire Insurance
Co. v. Rx Staffing Corporation, et al. (Cause No. DV 98-1321). In that
suit, the plaintiff is seeking $1.9 million based on claims for unpaid
workers' compensation and employers' liability insurance premiums.
Management believes that the Company has good defenses and offsets against
the claim and is vigorously contesting the matter.
In addition to the foregoing, the Company is subject to threatened and
pending litigation and disputes arising in the normal course of business.
Other than the foregoing, management believes that any such threatened or
pending actions will not materially affect the Company.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain Factors Pertaining to Forward Looking Statements
The statements contained herein which are not historical facts are
forward-looking statements that involve various risks and uncertainties. All
phases of the Company's operations are subject to a number of uncertainties,
risks and other influences. Therefore, the actual results of the future events
described in such forward-looking statements in this Form 10-QSB could differ
materially from those stated in such forward-looking statements. Among the
factors which could cause the actual results to differ materially are the risks
and uncertainties described both in this Form 10-QSB and the uncertainties set
forth from time to time in the Company's other public reports, filings and
public statements. Many of these factors are beyond the control of the Company,
any of which, or a combination of which, could materially affect the results of
the Company's operations and whether the forward-looking statements made by the
Company ultimately prove to be accurate.
Results of Operations
Three months ended September 30, 1998 compared to three months ended September
30, 1997
The following table sets forth, for the period=s indicated, certain
selected income statement data expressed as a percentage of revenues. The
following discussion should be read in conjunction with the Company=s annual
report on Form 10-KSB for the year ended June 30, 1998, as well as the unaudited
consolidated financial statements and notes thereto included in this quarterly
report on Form 10-QSB.
Three Months Ended September 30,
--------------------------------
1997 1998
-------- --------
Employee leasing revenue................. 99.7% 96.6%
Management fees.......................... 0.3 3.4
------- -------
Total revenues........................... 100.0 100.0
Direct cost.............................. 95.0 93.5
------- -------
Gross profit............................. 5.0 6.5
General and administrative expense....... 3.6 8.6
Sales and marketing expense.............. 1.2 1.3
------- -------
Other expenses (net)..................... (1.4) (2.9)
Loss from discontinued operations........ (0.0) (2.1)
------- -------
Net loss................................. (1.2) (8.5)
======= =======
10
<PAGE>
Revenues. Total revenues for the three months ended September 30, 1998 were
$26.3 million compared to $8.2 million for the three months ended September 30,
1997, an increase of $18.1 million, or 219.6%. Employee leasing revenues
increased by 229.7% from $7.9 million in the three months ended September 30,
1997 to $26.2 million in three months ended September 30, 1998. Management fees
decreased from $0.3 million in the three months ended September 30, 1997 to $0.1
million for three months ended September 30, 1998.
The increase in total revenues and employee leasing revenues was
attributable to the acquisition of PRC, Crest and Webster, which accounted for
an aggregate of $24.9 million of employee leasing revenues during the fiscal
1999 period compared to $3.0 million of employee leasing revenues of PRC for one
month only included in the fiscal 1998 period. Partially offsetting the increase
in employee leasing revenues attributable to acquisitions was a $3.6 million
decrease in employee leasing revenues during the fiscal 1999 period of Rx
Staffing which was attributable to the termination (because of excessive workers
compensation losses and a high incident of State unemployment claims), during
fiscal 1998 period of one client which accounted for approximately 25% of Rx
Staffing=s business in the fiscal 1998 period. The lower management fee total
for the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997, is attributable to the performance of management
services for Crest in the year ago period only, prior to the closing of its
purchase by the Company effective October 1, 1997.
The average number of worksite employees paid per month during the three
months ended September 30, 1998 period was 4,620 as compared to 1,603 during the
three months ended September 30, 1997, while monthly revenue per worksite
employee was $1,869 during the fiscal 1999 period as compared to $1,651 during
the fiscal 1998 period.
On a pro forma basis, assuming the acquisitions of PRC, Crest and Webster
as of July 1, 1997, total revenues for the three months ended September 30, 1997
amounted to $26.3 million. Actual revenues for the current period were unchanged
versus the fiscal 1998 period pro forma revenue, principally reflecting the net
increase in PRC employee leasing revenue of $4.2 million, offset by a decrease
in Rx Staffing and Crest employee leasing revenue of $3.6 million and $0.4
million, respectively.
Gross Profit. Gross profit amounted to $1.3 million for the three months
ended September 30, 1998 compared to $0.5 million for the three months ended
September 30, 1997, an increase of $0.8 million, or 148.7%. The increase in
gross profit was primarily attributable to the acquisition of PRC, Crest and
Webster during fiscal 1998, partially offset by a $0.3 million decrease
resulting from the aforementioned decline in Rx Staffing revenues. Gross margin
was 5.0% of revenues during the fiscal 1998 period compared to 6.4% during the
fiscal 1997 period. The decrease in gross margin during fiscal 1998 was
principally attributable to the lower gross margin of 4.7% generated by PRC.
Monthly gross mark-up per worksite employee averaged $94 during the three
months ended September 30, 1998, as compared to $110 during the three months
ended September 30, 1997.
11
<PAGE>
General and Administrative Expense. General and administrative expenses
("G&A") totaled $0.9 million for the three months ended September 30, 1998,
compared to $0.7 million for the three months ended September 30, 1997, an
increase of $0.2 million, or 31.4%. The increase in G&A was principally
attributable to the acquisitions of PRC, Crest and Webster and associated costs
of supporting such operations, offset by a decrease in certain unusual and
non-recurring expenses incurred in the year ago period. As a percentage of
revenues, G&A decreased from 7.4% to 5.0%, attributable to efficiencies
associated with operating on a larger scale.
Sales and Marketing Expense. Sales and marketing expenses amounted to $0.3
million for the three months ended September 30, 1998, compared to $0.1 million
for the three months ended September 30, 1997, an increase of $0.2 million, or
200.7%. The increase in sales and marketing expense was attributable to the
acquisition of PRC, Crest and Webster and associated costs of supporting such
operations. As a percentage of revenues, sales and marketing expense decreased
by an insignificant amount, from 1.3% to 1.2%.
Other Expense (Net). Other expenses were $0.4 million for the three months
ended September 30, 1998, compared to $0.2 million for the three months ended
September 30, 1997. The increase is principally attributable to higher
amortization expense ($0.1 million) for goodwill and interest expense ($0.1
million) for debt arising in connection with the aforementioned acquisitions,
offset by lower IRS penalties and interest charges.
Loss from Discontinued Operations. The Company recorded a loss from
discontinued operations of $0.2 million for the three months ended September 30,
1997. The loss from discontinued operations relates to the termination, during
fiscal 1998, of the operations of SFCI.
Net Loss. The Company reported a net loss of $0.3 million for the three
months ended September 30, 1998, compared to $0.7 million for the three months
ended September 30, 1997.
On a pro forma basis, assuming the acquisitions of PRC, Crest and Webster
as of July 1, 1997, the net loss during the fiscal 1998 period amounted to $0.6
million. The $0.3 million reduction in the actual net loss for the three month
period ended September 30, 1998 compared to the pro forma net loss is
principally attributable to the Company's efforts to terminate client contracts
that do not meet its profitability criteria, offset by greater levels of certain
expenses incurred in the 1998 period, such as professional fees and IRS
penalties and interest.
Seasonality, Inflation and Quarterly Fluctuations
Historically, the Company's earnings pattern has included losses in the
first calendar quarter (the Company's third quarter ended March 31), followed by
improved profitability in subsequent quarters throughout the calendar year. This
pattern is due to the effects of employment-related taxes which are based on
each employee's cumulative earnings up to specified wage levels, causing
employment-related taxes to be highest in the first quarter and then decline
over the course of the year. Since the Company's revenues related to an
individual employee are generally earned and collected at a relatively constant
rate throughout each year, payment of such employment-related tax obligations
has a substantial impact on the Company's financial condition and results of
operations during the first six months of each calendar year. Other factors that
affect direct costs could mitigate or enhance this trend.
12
<PAGE>
Liquidity and Capital Resources
The Company had cash of $554,334 and a deficit in working capital of
$11,905,898 at September 30, 1998, compared to a cash balance of $47,488 and
working capital deficit of $11,735,463 at June 30, 1998. The increase in the
cash balance at September 30, 1998, compared to September 30, 1997, is the
result of the timing of payment of certain accrued liabilities such as workers=
compensation premiums. The increase in the Company's working capital deficit is
principally attributable to the loss incurred during the period and increases in
accounts payable and accrued expenses and decreases in annual payroll receivable
and accounts receivable-clients, offset by decreases in accrued payroll payable
and payroll taxes payable.
Cash flows provided by (used in) operating activities were $668,642 for the
three months ended September 30, 1998 as compared to ($19,132) for the
corresponding period of the prior year. This change resulted from decreases in
net loss, accrued payroll receivable and accounts receivable-clients and
increases in accounts payable and accrued expenses, offset by an increase in
prepaid expenses and decreases in accrued payroll payable and payroll taxes
payable.
Cash used in investing activities totaled $32,617 for the three months
ended September 30, 1998 as compared to $25,887 for the three months ended
September 30, 1997. The change resulted principally from increased purchases of
furniture and equipment during the current period.
Cash used in financing activities was $129,179 for the three months ended
September 30, 1998 compared to $85,826 for the three months ended September 30,
1997. Cash used in financing activities during each period consisted primarily
of a decrease in the Company's bank overdraft position.
At September 30, 1998, the Company's principal obligations, other than
those relating to meeting its ongoing working capital needs, consisted of (1) a
non-interest bearing note payable in connection with the Company's acquisition
of Rx Staffing, (2) a note payable in connection with the acquisition of PRC,
and (3) a note payable in connection with the acquisition of Crest.
At September 30, 1998, the discounted balance of the note payable with
regard to the Rx Staffing acquisition was $460,000 and the balance of the note
payable with regard to the Crest acquisition was $137,112. As of January 15,
1999, the Company was in default under the terms of the notes payable relating
to the acquisitions of both PRC and Crest. Notice of intent to foreclose the PRC
note has been given and negotiations are presently ongoing with respect to
curing the default.
Additionally, at September 30, 1998, the Company continued to be involved
in legal proceedings with the IRS in connection with the IRS's efforts to
collect approximately $5 million of delinquent payroll taxes and related
penalties and interest which it contends are owed by Oxford Capital. In the
event the Company is unsuccessful in its efforts to settle the alleged payroll
tax deficiencies, the Company does not have the financial resources to pay the
amounts allegedly owing and support its ongoing operations.
13
<PAGE>
If the Company is unable to substantially improve operating results, secure
additional financing, negotiate more favorable payment terms with its creditors
or sell assets on favorable terms, the Company may be unable to continue its
present operations. The Company is presently negotiating with the IRS and the
former shareholders of PRC to secure more favorable terms with respect to
payment of amounts owed to such creditors. Absent an agreement in that regard,
the former shareholders of PRC may foreclose on their security interest and the
Company would lose its ownership interest in PRC and the IRS may levy against
assets of the Company to satisfy delinquent payroll tax obligations.
PART II - OTHER INFORMATION
Item 3. Default Upon Senior Securities
A note payable in the amount of $4,500,000 issued as consideration in
connection with the acquisition of PRC was in default as of January 15, 1999.
The event of default was the Company's failure to make the initial annual
principal and interest payment of approximately $480,000 due September 30, 1998.
The note is collateralized by shares of PRC stock, bears interest at 8%,
requires annual payments of principal and interest in an amount equal to the
greater of $450,000 or 30% of the gross profits of PRC, and requires payment of
unpaid principal and interest in September 2000. Notice has been given by the
holders of their intent to foreclose. Negotiations are presently ongoing with
respect to curing the default on the note.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
14
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
OXFORD CAPITAL CORP.
Date: February 5 ,1999 By: /s/ Robert Cheney
---------------------------
Robert Cheney, Chairman and
Principal Executive Officer
Date: February 5,1999 By: /s/ Jerry Stovall
----------------------------
Jerry Stovall, Treasurer and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 554,334
<SECURITIES> 0
<RECEIVABLES> 2,009,714
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,898,944
<PP&E> 420,102
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,370,302
<CURRENT-LIABILITIES> 14,839,304
<BONDS> 0
0
0
<COMMON> 10,335
<OTHER-SE> (6,949,544)
<TOTAL-LIABILITY-AND-EQUITY> 8,370,302
<SALES> 26,182,482
<TOTAL-REVENUES> 26,272,482
<CGS> 24,952,471
<TOTAL-COSTS> 24,952,471
<OTHER-EXPENSES> 1,255,298
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,232
<INCOME-PRETAX> (309,363)
<INCOME-TAX> 0
<INCOME-CONTINUING> (309,363)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (309,363)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
