LITTMAN & KROOKS, P.C.
120 WEST 45TH STREET
NEW YORK, NY 10036
(212)768-4646
August 12, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Dear Sirs:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of New Retail Concepts, Inc. (the
"Company") is the Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended June 30, 1995.
This filing is being effected by direct transmission to the
Commission's EDGAR system.
Very truly yours,
/s/ Cynthia Wong
Cynthia Wong
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, 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 June 30, 1995
or
Transition report pursuant to Section 13 or 15(d) of the Exchange Act
For the transition period from ____________________ to ________________
Commission file Number 0-17805
NEW RETAIL CONCEPTS, INC.
--------------------------------------------------------------------------------
(Exact name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3275369
------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) identification No.)
2975 Westchester Avenue, Purchase, New York 10577
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(914)694-8888
--------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
(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 of 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
-------- --------
APPLICABLE ONLY TO CORPORATE ISSUER
Shares of Common Stock outstanding at August 14, 1995: 6,171,039 (does not
include 1,001,454 treasury shares held by Company at August 14, 1995).
Traditional Small Business Disclosure Format (check one):
YES X NO
-------- --------
Page 1
<PAGE>
NEW RETAIL CONCEPTS, INC.
INDEX TO FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1995
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Balance Sheet at June 30, 1995 (unaudited) 3-4
Condensed Statements of Operations for the
Three Months Ended June 30, 1995 and 1994 (unaudited) 5
Condensed Statements of Cash Flows for the Three
Months Ended June 30, 1995 and 1994 (unaudited) 6
Notes to Interim Financial Statements 7-10
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-12
PART II - Other Information 13
SIGNATURES 14
Page 2
<PAGE>
NEW RETAIL CONCEPTS, INC.
CONDENSED BALANCE SHEET
JUNE 30, 1995
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 127,367
Accounts receivable - net of allowance for
doubtful accounts of $19,500 163,073
Due from Candie's, Inc. 33,467
Prepaid income taxes 6,140
Loan Receivable - officer 158,709
Other current assets 1,000
----------
Total current assets 489,756
FIXED ASSETS - AT COST:
Furniture and equipment 151,964
Less accumulated depreciation 151,964
----------
0
Notes receivable - Candie's, Inc. 600,000
Investment in Candie's, Inc. 1,358,133
----------
1,958,133
OTHER ASSETS 4,029
----------
$2,451,918
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
Page 3
<PAGE>
NEW RETAIL CONCEPTS, INC.
CONDENSED BALANCE SHEET
JUNE 30, 1995
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable - current $ 550,000
Current maturities of long-term obligation 380
Accounts payable - trade 350,319
Accrued expenses and other current
liabilities 320,141
-----------
Total current liabilities 1,220,840
DEFERRED INCOME TAXES 100,000
STOCKHOLDERS' EQUITY:
Preferred stock - par value $.01; authorized,
1,000,000 shares, no shares issued
Common stock - par value $.01; authorized,
25,000,000 shares; issued 7,172,493 shares 71,725
Additional paid-in capital 3,683,644
Accumulated deficit (2,383,426)
-----------
1,371,943
Less:
Common stock in treasury at cost;
423,454 shares 240,865
-----------
1,131,078
-----------
$ 2,451,918
===========
THE ACCOMPANYING STATEMENTS ARE AN INTEGRAL PART OF THESE STATEMENTS
Page 4
<PAGE>
NEW RETAIL CONCEPTS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
------------------------------
1995 1994
----------- -----------
Revenues:
License and marketing fees $ 152,577 $ 324,210
----------- -----------
Costs and expenses:
Design, selling, general
and administrative 203,473 198,149
Interest expense 6,875 7,941
----------- -----------
Total costs and expenses 210,348 206,090
----------- -----------
Operating income (loss) (57,771) 118,120
----------- -----------
Other income (expense):
Equity in (losses) gains of
affiliate (6,536) 29,779
Other, net 13,771 44,979
----------- -----------
7,235 74,758
----------- -----------
(Loss) income before provision
for income taxes (50,536) 192,878
Provision for income taxes 1,951 12,246
----------- -----------
Net (loss) income $ (52,487) $ 180,632
=========== ===========
Net (loss) income per share of
common stock $(0.01) $0.03
======= =====
Weighted average number of
shares outstanding 6,762,548 6,873,568
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS
Page 5
<PAGE>
<TABLE>
<CAPTION>
NEW RETAIL CONCEPTS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
---------------------------------
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (52,487) $ 180,632
--------- ---------
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization 0 312
Equity in (gains) losses of affiliate 6,536 (29,779)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 75,845 32,073
(Increase) decrease in due from Candie's, Inc. (3,467) 0
(Increase) decrease in prepaid income taxes (2,151) 0
(Increase) decrease in other current assets 8,729 (25,375)
(Increase) decrease in other assets 0 41,375
Increase (decrease) in income taxes payable 0 (15,324)
Increase (decrease) in accounts payable 30,500 (7,790)
Increase (decrease) in accrued expenses and
other current liabilities 49,480 (113,334)
Increase (decrease) in due to Candie's, Inc. 0 (124.525)
--------- ---------
165,472 (242,367)
Net cash provided by (used in) operating activities 112,985 (61,735)
--------- ---------
Cash flows from investing activities:
Increase in loan receivable - officer (97,250) (66,250)
Payments received on notes receivable 0 162,556
--------- ---------
Net cash (used in) provided by investing activities (97,250) 96,306
--------- ---------
Cash flows from financing activities:
Repayment of long-term debt,
including current maturities (3,862) (3,419)
Purchase of treasury stock (8,018) (18,612)
--------- ---------
Net cash used in financing
activities (11,880) (22,031)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 3,855 12,540
Cash and cash equivalents at beginning of period 123,512 183,634
--------- ---------
Cash and cash equivalents at end of period $ 127,367 $ 196,174
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
</TABLE>
Page 6
<PAGE>
NEW RETAIL CONCEPTS, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1994
NOTE A - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
New Retail Concepts, Inc. ("NRC" or the "Company"), is engaged in the
marketing and licensing of apparel and footwear trademarks owned, licensed or
sublicensed by the Company.
During Fiscal 1992, NRC acquired El Greco, Inc. ("El Greco"), which
owned the CANDIE'S and CRAYONS trademarks, and through El Greco, licensed those
trademarks. El Greco was merged into NRC, effective March 3, 1993. As a result
of the merger all assets and liabilities of El Greco were assumed by NRC.
In January 1993, the Company sold its NO EXCUSES trademark but retained
certain royalty and sublicensing rights with respect to the NO EXCUSES
trademark. In March 1993, El Greco transferred various trademarks, including the
CANDIE'S trademark, to Candie's, Inc. ("Candie's"). As part of the consideration
for the transfer of the NO EXCUSES and CANDIE'S trademarks, the Company received
minority equity interests in both acquiring companies.
As of the end of the fiscal quarter ended June 30, 1995, the Company
retains certain sublicensing rights with respect to NO EXCUSES and continues to
own the CRAYONS trademark. In addition, the Company has no full-time employees
and three part-time employees who are the Chairman of the Board and President,
the Chief Financial Officer of the Company, and a bookkeeper/officer Manager,
respectively.
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying financial statements follows:
1. Fixed Assets
Furniture and equipment are recorded at cost. Depreciation for
furniture and equipment is provided by the straight-line method over the
estimated useful lives of the assets (five years).
2. Investment in Candie's, Inc.
At June 30, 1995, the Company owned 1,227,696 shares of restricted
common stock of Candie's, Inc. ("Candie's") a publicly-traded corporation,
carried at $1,358,133 (see Note C), which is recorded on the equity method of
accounting. Included in the carrying amount is approximately $800,000 of
goodwill (net of amortization) which is being amortized over a ten-year period.
3. Revenue Recognition
The Company recognizes revenue over the term of its licensing
agreements.
4. Earnings (Loss) Per Share
Earnings (loss) per share is based on the weighted average number of
shares outstanding during the period, adjusted for the dilutive effect of common
stock equivalents when applicable.
Page 7
<PAGE>
5. Recently Adopted Accounting Standards
Effective at the beginning of fiscal 1994, the Company adopted
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"). As permitted under SFAS No. 109, prior years' financial
statements have not been restated. The effect of this change did not have a
significant impact on the Company's financial statements and has therefore been
reflected as a reduction of current income tax expense rather than as a
cumulative effect of an accounting change in the accompanying financial
statements.
Pursuant to SFAS No. 109, deferred income taxes are recognized for
temporary differences between financial statement and income tax bases of assets
and liabilities and loss carryforwards and tax credit carryforwards for which
income tax benefits are expected to be realized in future years. A valuation
allowance is to be established to reduce deferred tax assets if it is more
likely than not that all, or some portion, of such deferred tax assets will not
be realized. The effect on deferred taxes of a change in tax rates is recognized
in income in the period that includes the enactment date.
6. Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Company considers all
highly liquid debt instruments purchased with original maturities of three
months or less to be cash equivalents.
7. Reclassifications
Certain amounts in prior years' financial statements have been
reclassified to conform with classifications used in the current year.
NOTE B - BASIS FOR PRESENTATION
The Company has an interest in Candie's, Inc. carried at $1,358,133
which reported significant losses for the year ended January 31, 1995, and the
auditors' report of Candie's, Inc. expressed an opinion with an explanatory
paragraph relating to Candie's, Inc. ability to continue as a going concern and
the ultimate outcome of several lawsuits.
Management of the Company believes that it has successfully
restructured the Company's operations from a manufacturer of women's and
children's jeanswear and shoes to a licensor, concentrating solely on the
marketing and licensing of its trademark, CRAYONS, and on the marketing and
licensing of its remaining rights to the trademark NO EXCUSES, which was sold
during Fiscal 1993. Management believes the cost savings resulting from the
restructuring of the Company's operations and the sale or transfer of various
trademarks will enable the Company to continue to meet its obligations.
NOTE C - TRANSFER OF TRADEMARKS
On March 3, 1993, El Greco transferred its CANDIE'S, ACTION CLUB,
FULLMOON and SUGAR BABIES trademarks and its right, title and interest in
certain identified license agreements with respect to the trademarks to
Candie's.
In consideration for the transfer, Candie's (i) issued to El Greco
900,000 shares of restricted common stock valued at $2,250,000 on March 3, 1993
by the Company, based on a valuation prepared by an independent investment
Page 8
<PAGE>
banker, (ii) issued to El Greco a subordinated note in the principal amount of
$325,000, plus interest payable in quarterly installments at the prime interest
rate (as defined in the note), and (iii) paid El Greco's expenses, including
attorney's fees, relating to the sale, in the sum of $75,000. The subordinated
note, which was payable by Candie's no later than two years from the closing,
was converted into 240,740 shares of Candie's common stock as of May 16, 1994.
In addition, the Company entered into a Services Allocation Agreement with
Candie's, pursuant to which Candie's has provided NRC with financial, marketing,
sales and other business services for which NRC has been charged an allocated
portion of Candie's expenses, including employee's salaries associated with such
services. The service allocation charge for the three months ended June 30, 1995
was approximately $19,033.
On January 7, 1993, the Company sold its No Excuses trademark and
certain identified license agreements with respect to the trademark ("Assets")
to No Excuses Sportswear, Ltd. ("Buyer"). The purchase price for the sale of the
Assets was $2,500,000 payable as follows: $750,000 in cash, $1,050,000
($1,002,535 net of imputed interest) payable in monthly installments commencing
February 1993 and continuing through July 1994; and $700,000 payable by the
issuance of 10% of the common stock of Buyer. Furthermore, the Buyer agreed to
pay to the Company: (i) on July 5, 1994 an amount equal to $350,000 multiplied
by the prime rate in effect on July 1, 1994 and; (ii) on January 5, 1995 an
amount equal to $350,000 multiplied by the prime rate in effect on January 3,
1995. The payment due on July 5, 1994 per (i) above was paid during July, 1994.
Thereafter, the Company had the option to require the Buyer to redeem 50% of the
Buyer's shares for the price of $350,000 together with a 20% bonus (i.e.,
$70,000). Finally, the Company had the option, exercisable after January 5,
1996, of requiring the Buyer to redeem any or all of the remaining shares of the
Buyer for the original allocated value or pro-rata portion thereof. In October
1994, the Company sold its investment in the Buyer for $550,000 in cash. The
Company realized a loss on the disposal of its investment of $150,000.
As additional consideration for the sale of the Assets, the Buyer
agreed to pay the Company fifty percent of all "Net Shared Income" in
perpetuity. Net Shared Income means all income received by Buyer or its
affiliates in connection with "Covered Uses" of the trademark. Covered Uses
include use of the trademark: (i) with non-apparel products throughout the
world; (ii) men's and boys' apparel throughout the world; (iii) women's and
girls' outerwear throughout the world; (iv) women's and girls' products, other
than outerwear, outside the United States and; (v) women's and girls' apparel
covered by an Existing NRC License after the termination of such License
Agreement, if terminated on account of Buyer's rejection of products proposed by
the licensee under the License Agreement. There has been no Net Shared Income
reported or paid by the Buyer to the Company to date.
NOTE D - NOTES RECEIVABLE-CANDIE'S, INC.
On February 1, 1995, the Company and Candie's entered into an agreement,
pursuant to which the Company loaned to Candie's $400,000. The loan is evidenced
by a senior subordinated secured note bearing interest at the prime rate, and is
due on September 30, 1995.
The Company also loaned Candie's $200,000, the proceeds of which were used
by Candie's as an advance for the license of a fashion trademark with an
unaffiliated third party. The loan is evidenced by a senior subordinated secured
note, bearing interest at the prime rate, and is due on February 1, 1996.
Candie's has agreed to prepay the note to the extent of 50% of gross profits
received by Candie's from the use of the Trademark with third parties on an
agency or commission basis.
Page 9
<PAGE>
In addition, the Company agreed to make available to Candie's, through June
30, 1995, an additional $200,000 if Candie's is required to advance additional
cash collateral to a senior lender. Any advances to the senior lender would be
evidenced by a senior subordinated secured note bearing interest at the prime
rate. This line of credit expired on June 30, 1995 without funding by the
Company.
In addition, Candie's issued to the Company warrants to purchase up to
700,000 shares of its common stock, of which 500,000 shares vested immediately
and 200,000 shares vested in June 1995 when the loan was extended through
September 30, 1995, exercisable at an initial price of $1.2375 per share of
Common Stock, which price equals 110% of the closing bid price of the Common
Stock on the NASDAQ National Market System on January 31, 1995. The shares of
Common Stock underlying the warrants have been granted certain "Piggy-back"
registration rights by Candie's.
To secure the loans, Candie's granted to the Company a security interest in
all of the assets of Candie's, Bright Star Footwear, Inc., a wholly-owned
subsidiary of Candie's, and Intercontinental Trading Group, Ltd., a
majority-owned subsidiary of Candie's, subject to a first lien on such assets in
favor of a senior lender and/or one or more commercial or institutional lenders
to be identified, who may provide Candie's with up to an aggregate of $7,500,000
principal amount of secured senior financing. The Company entered into an
intercreditor and subordination agreement with Candie's senior lender and issued
a corporate limited recourse guarantee and waiver in their favor in the amount
of $400,000 (the "Guarantee"), whereby the sole and exclusive recourse of the
Guarantee is the $400,000 Loan. As additional security for the Notes, the
Company's Chairman of the Board and President issued a personal guarantee in
favor of the Company.
NOTE E - MAJOR LICENSEES (CUSTOMERS)
Three major licensees (customers) accounted for 56.6%, 29.5% and 13.8%,
respectively, of total revenues for the three months ended June 30, 1995. Three
major licensees accounted for 50.4%, 12.5%, and 10.1%, respectively, of total
revenues for the three month period ended June 30, 1994.
NOTE F
The Condensed Financial Statements included herein are unaudited and
include all adjustments which are in the opinion of management, necessary for a
fair presentation of the results of operations of the interim period pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures in such
financial statements are adequate to make the information presented not
misleading. These condensed consolidated financial statements should be read in
conjunction with the Company's Financial Statements and the notes thereto
included in the Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1995.
Page 10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended June 30, 1995 and 1994
Total revenues for the three months ended June 30, 1995 were $152,577
as compared to $324,210 for the corresponding period ended June 30, 1994. This
decrease is primarily attributable to the termination of several of the
Company's license agreements and decreased shipments of the Company's footwear
licensee.
The net loss for the three months ended June 30, 1995 was ($52,487)
or($.01) per share of Common Stock, as compared to net income of $180,632 or
$.03 per share of Common Stock, for the three months ended June 30, 1994. This
decrease in net income is principally due to the decrease of the Company's
licensing revenues as discussed above.
Design, selling, general and administrative expenses increased from
$198,149 for the three months ended June 30, 1994 to $203,473 for the three
months ended June 30, 1995. This increase was attributable to increased selling
and marketing expenses to support the Company's existing licensees.
Interest expense for the three months ended June 30, 1995 was $6,875 as
compared to $7,941 for the three months ended June 30, 1994.
Liquidity and Capital Resources
At June 30, 1995 the Company's working capital deficit was $731,084 as
compared to $677,115 at March 31, 1995. This increase in the working capital
deficit arose primarily as a result of the net loss during the three months
ended June 30, 1995.
Management believes that it has successfully restructured the Company's
operations starting in Fiscal 1992 from a manufacturer of women's and children's
jeanswear and shoes to a licensor, concentrating solely on the marketing and
licensing of its trademark, CRAYONS, and on the marketing and licensing of its
remaining rights in the trademark NO EXCUSES, which was sold during Fiscal 1993.
Management believes that as a result of this restructuring, the Company reduced
its operating expenses and capital requirements substantially, which, in turn,
management believes, may increase net income and reduce the Company's working
capital deficit.
The Company satisfies its present working capital and other financial
needs from royalties earned on its licensing agreements. Management of the
Company believes that the Company will generate sufficient cash flow from (i)
licensing fees as the sublicensor of the NO EXCUSES trademark and (ii) payments
under the notes receivable from Candie's to meet its obligations for the next
twelve months. Management of the Company believes, however, that additional
financing may be necessary for the Company to satisfy its future working capital
and other financial needs, especially in the event the Company acquires rights
to additional brands or trademarks. There can be no assurance that the Company
will be able to secure such financing or, that if such financing is available,
that the terms of such additional financing will be favorable to the Company.
Page 11
<PAGE>
The Company believes that the Additional Consideration to be received
from Buyer in connection with the NO EXCUSES transaction (see Note C of Notes to
Interim Consolidated Financial Statements), and any proceeds from the sale of
the Buyer's common stock and/or Candie's, Inc. common stock received by the
Company in such transactions, may provide the Company with additional funds from
which it can satisfy its working capital and other financial needs and possibly
decrease its working capital deficit. No assurance can be given that such funds
will be realized.
During the three months ended June 30, 1995, the Company repurchased an
aggregate of 75,000 shares of common stock at an aggregate purchase price of
$8,018. Of such shares, 40,000 were purchased in the over-the-counter market and
35,000 were repurchased from a former employee of the Company. Also, subsequent
to the three months ended June 30, 1995, the Company has repurchased an
additional 578,000 shares at an aggregate purchase price of $125,644 in the
over-the-counter market. Of such shares, 83,000 were purchased in the
over-the-counter market and 495,000 were repurchased from a former executive
officer and director of the Company.
Page 12
<PAGE>
NEW RETAIL CONCEPTS, INC.
PART II - OTHER INFORMATION
Item 3- Legal Proceedings
On December 10, 1993, the Company filed suit against Hallmark Cards,
Incorporated, Binney and Smith, Inc. and Payless Shoesource, Inc. in the United
States District Court for the Southern District of New York for trademark
infringement of the Company's footwear trademark CRAYONS in connection with the
marketing and sale of footwear under the CRAYOLA mark by defendants. On August
3, 1995, the action was settled by all parties in an agreement setting forth the
rights of the relevant parties to use their respective trademarks, and setting
forth any limitations thereon. The settlement agreement included mutual releases
and the action was discontinued with prejudice. We will not be reporting on this
matter in future years.
Page 13
<PAGE>
NEW RETAIL CONCEPTS, INC.
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.
NEW RETAIL CONCEPTS, INC.
DATED: August 14, 1995 BY: \S\ NEIL COLE
----------------------------
Neil Cole
President
Chairman
Chief Executive Officer
Chief Accounting Officer
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM FORM 10-QSB AT JUNE 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<CASH> 127,367
<SECURITIES> 0
<RECEIVABLES> 163,073
<ALLOWANCES> 19,500
<INVENTORY> 0
<CURRENT-ASSETS> 489,756
<PP&E> 151,964
<DEPRECIATION> 151,964
<TOTAL-ASSETS> 2,451,918
<CURRENT-LIABILITIES> 1,220,840
<BONDS> 0
<COMMON> 71,725
0
0
<OTHER-SE> 1,059,353
<TOTAL-LIABILITY-AND-EQUITY> 2,451,918
<SALES> 152,577
<TOTAL-REVENUES> 152,577
<CGS> 0
<TOTAL-COSTS> 203,473
<OTHER-EXPENSES> (7,235)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,875
<INCOME-PRETAX> (50,536)
<INCOME-TAX> 1,951
<INCOME-CONTINUING> (52,487)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (52,487)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
