SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended June 30, 1999
----------------------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ________ to ________
Commission File Number 0-15379
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POWER-CELL, INC.
----------------
(Name of Small Business Issuer in Its Charter)
Colorado 84-1029701
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
660 Preston Forest Center, Box 200, Dallas, TX 75230
---------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
214/373-1887
------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, par value $.0001
------------------------------ ----------------------
Securities registered under Section 12(g) of the Exchange Act:
none
----
(Title of Class)
Power-Cell 10KSB.wpdCheck 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 filing requirements for the past 90 days.
Yes x No
--- ---
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]
State issuer's revenues for its most recent fiscal year. $-0-
The aggregate market value of the voting stock held by non-affiliates as of
September 3, 1999, was $2,749,450.00. As of September 3, 1999, there were
6,419,540 shares of Common Stock, $.0001 par value, outstanding.
<PAGE>
TABLE OF CONTENTS
Page
PART I 1
Item 1. Description of Business.......................................... 1
Item 2. Description of Property.......................................... 3
Item 3. Legal Proceedings................................................ 3
Item 4. Submission of Matters to a Vote of Security Holders.............. 3
PART II .................................................................. 4
Item 5. Market for Common Equity and Related Stockholder Matters......... 4
Item 6. Management's Discussion and Analysis or Plan of Operation........ 5
Item 7. Financial Statements............................................. 7
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure............................................. 8
PART III ................................................................. 8
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act................ 8
Item 10. Executive Compensation........................................... 9
Item 11. Security Ownership of Certain Beneficial Owners and Management... 9
Item 12. Certain Relationships and Related Transactions................... 11
Item 13. Exhibits, List and Reports on Form 8-K........................... 12
Signatures....................................................... 13
Index to Financial Statements.................................... F-1
Index to Exhibits................................................ E-1
<PAGE>
PART I
Item 1. Description of Business.
The Company was incorporated on April 26, 1986 under the laws of the
State of Colorado. The Company conducted its initial public offering in December
1986. From its inception until May 1987, the Company evaluated various business
opportunities. In May 1987, the Company and Balzac Investments, Inc. ("Balzac")
entered into a Merger Agreement. At the time, Balzac owned the rights to a
battery charger product which consisted of a reserve battery encased in hard
form plastic that was designed to be carried in a car and used to charge a
"dead" automotive battery (the "Product"). The merger was completed in February
1988 and, as a result of the merger, the Company obtained the rights to
manufacture, market and distribute the Product and all related technology in the
United States and its territories. The former shareholders of Balzac retained
the international rights to the Product. On December 27, 1988, the United States
Patent and Trademark Office issued a United States' Letter Patent to the Company
relating to certain features of the Product. The Product has also been approved
for patent protection in at least five (5) foreign countries.
On October 9, 1992, the Company formed a limited partnership with
Reserve Battery, Inc., the general partner, and certain additional parties, by
entering into an Agreement of Limited Partnership. The limited partnership
formed by such parties, the name of which is Reserve Battery Cell, L.P. (the
"Limited Partnership"), was formed for the purpose of developing, manufacturing,
marketing and selling the Product. The Company's limited partnership interest in
the Limited Partnership is currently 7.28%. In connection with forming the
Limited Partnership, the Company entered into a License with the Limited
Partnership pursuant to which it licensed its intellectual property rights in
the Product to the Limited Partnership in return for royalties on sales of the
Product.
In the spring of 1997, the Company was informed that all activities
and operations of the Limited Partnership had ceased due to the lack of funding.
As a result, at such time, for all practical purposes the operations of the
Company ceased. The Company currently has virtually no assets or ongoing
operations and has not engaged in any business activities since 1997. The
Company has spent no funds on research and development activities during the
last two fiscal years. From 1997 through the present, other than satisfying its
periodic reporting obligations under the Exchange Act, the Company has been
virtually inactive. Therefore, the Company believes it is still in the
development stage. The Company currently has no full time or part time
employees.
After reviewing the Company's prospects, management believed that it
would be possible to develop a strategy for the Company to enter into a business
combination with a privately held company as a reasonable alternative for such
company to the more traditional initial public offering, or "IPO", and would
provide the shareholders of the Company a reasonable opportunity to recover some
value on their investment. The Company also considered raising capital by means
of a public or private debt or equity offering in order to continue operations.
However, such alternatives did not appear feasible on the basis that the Company
has virtually no assets or revenues.
1
<PAGE>
On March 9, 1999, the Company entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement") with Park Pharmacy Corporation, a
privately-held Texas corporation ("Park"), and Joe B. Park, Thomas R. Baker and
David W. Frauhiger, the shareholders of Park (collectively, the "Selling
Shareholders"), which provides for, among other things, the acquisition (the
"Reverse Acquisition") by the Company of all of the issued and outstanding
shares of capital stock of Park in exchange for the issuance by the Company of
shares of a newly authorized and designated series of Preferred Stock, par value
$.0001 per share, of the Company (the "Series A Preferred Stock"). Upon the
Closing (the "Closing") of the Reverse Acquisition: (i) Park will become a
wholly-owned subsidiary of the Company, (ii) the Selling Shareholders will
control approximately 80% of the votes entitled to be cast at any meeting of the
Company's shareholders, and (iii) the Selling Shareholders' designees shall
constitute five out of the six members on the Company's Board of Directors.
Therefore, the Selling Shareholders will have effective control of the Company
after the Reverse Acquisition.
In connection with the transactions contemplated by the Stock
Purchase Agreement, the Board of Directors has approved Articles of Amendment to
the Articles of Incorporation of the Company which will change the corporate
name of the Company to "Park Pharmacy Corporation" and will create a new class
of Preferred Stock of the Company and increase the number of authorized shares
of capital stock.
Pursuant to the terms of the Stock Purchase Agreement, the Closing of
the Reverse Acquisition is conditioned upon, among other things, the approval of
the Stock Purchase Agreement and the authorization and designation of the Series
A Preferred Stock by a majority of the outstanding shares of Common Stock, par
value $.0001 per share, of the Company (the "Company Common Stock"). In
addition, pursuant to the Colorado Business Corporation Act and the Bylaws of
the Company, the amendments to the Articles of Incorporation must be approved by
a majority of the outstanding shares of Company Common Stock. A special meeting
of the shareholders to be held on October 12, 1999 (the "Special Meeting") has
been called by the Company, at which meeting the shareholders will vote on the
Stock Purchase Agreement and transactions contemplated thereby, as well as the
amendments to the Articles of Incorporation.
Park was incorporated on June 10, 1998, under the laws of the state
of Texas and is in the development stage. Park's plan of operation for the next
twelve months is to close the transaction with the Company, acquire Rx-Pro.Com,
Inc., a Texas corporation that currently operates two on-line pharmacy Web
sites, and to acquire independent non-Internet retail pharmacies, including
pharmacies with associated home health care facilities.
(The transactions contemplated by the Stock Purchase Agreement are
described in greater detail in the Company's Definitive Proxy Statement filed
with the Securities and Exchange Commission on September 7, 1999.)
Item 2. Description of Property.
2
<PAGE>
Item 2. Description of Property.
The Company has a nominal amount of office space, which is located at
the residence of James C. Rambin. Mr. Rambin provides such space on an informal
basis and free of charge. There are no other offices or properties of the
Company.
Item 3. Legal Proceedings.
Neither the Company nor its property is presently subject to any
material litigation nor, to the Company's knowledge, is any material litigation
threatened against the Company or its properties.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
3
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market Information
The Company Common Stock is currently traded on the over-the-counter
bulletin board market under the symbol "POCE." The table sets forth, for the
periods indicated, the reported high and low bid prices of the Company Common
Stock for each quarter within the last two fiscal years. The source of the high
and low bid prices is Rocky Mountain Securities, based in Denver, Colorado. The
quotations reflect inter-dealer prices, without retail mark-up, mark-down, or
commission, and may not represent actual transactions.
HIGH LOW
----- -----
Fiscal Year 1998:
1st Quarter $ .38 $ .094
2nd Quarter 2.12 1.00
3rd Quarter .88 .25
4th Quarter .63 .22
HIGH LOW
----- ------
Fiscal Year 1999:
1st Quarter $ .38 $ .16
2nd Quarter .38 .06
3rd Quarter 3.06 .13
4th Quarter 3.63 1.13
Shareholders
According to the records of the Company's transfer agent, as of
September 3, 1999, there were 828 holders of record of the Company Common Stock.
4
<PAGE>
Dividends and Distributions
The Company has never paid cash dividends on its Common Stock and
does not intend to do so in the foreseeable future. It is anticipated that
earnings, if any, will be retained to finance the Company's growth. Future
payments of cash dividends, if any, will be determined by the Board of Directors
of the Company based upon circumstances then existing, including contractual
restrictions, financial condition, capital requirements and business outlook of
the Company.
Item 6. Management's Discussion and Analysis or Plan of Operation.
General
The Company has not engaged in any material operations since the
spring of 1997 and has had virtually no revenues from operations during the last
two fiscal years. The Company believes that it is an attractive business partner
for an entity seeking a strategic combination with a publicly-held company.
Company management and the Board of Directors believe that such a combination
will serve the interests of the Company's shareholders better than a liquidation
of the Company. If the Stock Purchase Agreement and the Articles of Amendment
are approved, it is the Board of Directors' intention to complete the Reverse
Acquisition and assist Park in its operations and implementing its plan of
operation. (See the discussion set forth in Item 1 "Description of the Business"
incorporated herein by reference.) (The transactions contemplated by the Stock
Purchase Agreement are described in greater detail in the Company's Definitive
Proxy statement filed with the Securities and Exchange Commission on September
7, 1999.)
In the event the transactions contemplated by the Stock Purchase
Agreement are not consummated, the Company's plan of operation is to pursue an
alternative business combination with another entity that may benefit the
Company and its shareholders. Foreseeable cash requirements relating to
maintenance of the Company in good standing and expenses associated with
receiving and investigating a potential business combination will be met by
personal funds advanced from Mr. Rambin. Because the Company has no revenues or
cash resources, management anticipates that to achieve any such combination, the
Company plans to issue shares of Company Common Stock as the sole consideration
for such combination. However, the consummation of any such combination may
require the Company to obtain debt or equity financing. The Company has no
current plan to obtain additional financing and no assurance can be given that
such financing will be available to enter into a particular business
combination.
Year 2000
The Company currently has virtually no active business operations.
The issues associated with computing difficulties that may affect existing
computer systems as a result of programming code malfunctions in distinguishing
21st century dates from 20th century dates are known as the "Year 2000" issue.
The Year 2000 issue is a pervasive problem affecting many information technology
systems and embedded technologies in all industries. The Company has determined
that the consequences of its Year 2000 issues will not have a material effect on
the Company's business, results of operations, or financial condition.
5
<PAGE>
The Company does not currently have any significant information
technology ("IT") systems, including computer hardware systems or software.
The Company's assessment of the Year 2000 issue does not necessitate
a review of non-information technology ("non-IT" systems) (systems that contain
embedded technology in process control equipment containing microprocessors or
other similar circuitry), because the Company has no internal equipment and
facilities.
The Company's current plans, as previously discussed, involve
implementing Park's plan of operations, which consist of the pursuit of new
investment opportunities. Due diligence with any potential acquisition candidate
will include a review of any Year 2000 exposure. Since the Company has not yet
consummated a business acquisition, the Company is unable to estimate Year 2000
compliance costs that may arise from such business acquisition opportunities.
6
<PAGE>
Item 7. Financial Statements.
See "Index to Financial Statements" included on page F-1 for the
information required under this Item 7.
7
<PAGE>
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 9.Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section16(a) of the Exchange Act.
The current directors of the Company and their ages are James C.
Rambin, 76, H. Don Gill, 63, and E. Brewer Newton, 62. Mr. Rambin has served on
the Company's Board of Directors from January 1987 through the present. Messrs.
Gill and Newton have served on the Company's Board of Directors from December
1997 through the present. On or prior to the Closing, the Board of Directors
will increase the number of seats on the Board from three (3) to six (6).
Pursuant to the terms of the Stock Purchase Agreement, the current directors of
the Company will resign at the Closing of the Reverse Acquisition. The vacancies
created by such resignations will be filled by Messrs. Joe B. Park, Thomas R.
Baker, Jack R. Munn, R.Ph., John A. Blomgren, R.Ph. and Ms. Gwendolyn Park, each
of whom will serve as directors of the Company until the next annual meeting of
the Company's shareholders or until their earlier deaths, resignations or
removal. As an additional matter, the parties to the Stock Purchase Agreement
and Mr. Rambin have agreed that Mr. Rambin will be appointed as an advisory
director to the Board after the Closing.
In the event the shareholders do not approve the Stock Purchase
Agreement and related transactions at the Special Meeting, and the Closing does
not occur, Messrs. Rambin, Gill and Newton shall serve as directors until the
next annual or special meeting of the Company's shareholders at which the
election of directors is submitted to a shareholders' vote, or until their
earlier deaths, resignations or removal.
Mr. Rambin's business experience during the past five years consists
of serving as a director and officer of the Company. Prior to his association
with the Company, Mr. Rambin was engaged in corporate finance activities with a
private investment banking firm, where he specialized in mergers and
acquisitions. Mr. Gill's business experience during the last five years consists
of owning, managing and brokering commercial real estate located in the Dallas
and Corpus Christi, Texas, areas under the assumed name "The Howard Group."
Prior to his retirement from the banking industry in 1983, Mr. Gill served as a
Federal Reserve Bank Examiner, vice president of four different banks, Chief
Executive Officer and Director of Liberty National Bank, Lovington, New Mexico,
and President and Chairman of the Board of Plains State Bank, Plains, Texas,
from 1974 through 1980, and served on the boards of various other banks. Mr.
Newton's business experience during the past five years has consisted of owning
and operating: (i) "Rinky-Tinks," a sandwich shop and ice cream parlor located
in Granbury, Texas, from February 1995 through July 1999, and (ii) Air Pollution
Solution, a marketing company operating in the greater Granbury, Texas, area,
representing Alpine Industries of Greenville, Tennessee, whose products are air
and water purification systems to be used in the home, from July 1999 through
the present.
8
<PAGE>
Messrs. Rambin and Newton are the only officers of the Company.
Mr. Rambin currently serves as the President and Chief Executive Officer of the
Company, having held such positions from January 1987 through the present. Mr.
Newton serves as the Secretary of the Company, and has served as such from
December 1997 through the present.
Item 10. Executive Compensation.
During the fiscal year ended June 30, 1999, no officer or director of
the Company received any compensation for their services as such. In fiscal
1998, Mr. Rambin requested a bonus of approximately $607,000 for services
rendered as President of the Company. The Board of Directors approved such
request on the condition that such bonus would be payable by the Company only if
Mr. Rambin was able to successfully negotiate the payment of the bonus, or a
portion thereof, in the context of a business combination with another company,
including, without limitation, by way of an acquisition of the Company or a
merger with the Company.
The parties to the Stock Purchase Agreement and Mr. Rambin have made
certain agreements with respect to the contingent bonus granted by the Company
to Mr. Rambin in fiscal 1998. In connection with the transactions contemplated
by the Stock Purchase Agreement, the parties have agreed that Mr. Rambin's
contingent bonus will be satisfied in full by the issuance of 50,000 shares of
newly authorized and designated Series A Preferred Stock after the Closing by
the Company. (The transactions contemplated by the Stock Purchase Agreement are
described in greater detail in the Company's Definitive Proxy Statement filed
with the Securities and Exchange Commission on September 7, 1999.)
9
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of September 3, 1999, the
beneficial ownership of Company Common Stock of (i) each director and executive
officer of the Company, and (ii) the only other persons who were known to the
Company to be the beneficial owners of more than five percent (5%) of the total
number of issued and outstanding shares of Company Common Stock.
<TABLE>
Number of Shares Percentage of
Beneficially Outstanding
Name and Addresses Owned Shares
--------------------------------- ---------------- --------------
<S> <C> <C>
H. Don Gill (1) 56,055 0.9%
4224 Ocean Drive
Corpus Christi, TX 78411
S. A. Hellerstein 1,089,235 17.09%
Trustee for the Farkas Trusts (2)
1139 Delaware Street
Denver, CO 80204
Windy City, Inc. (3) 363,078 5.6%
8300 Boone Boulevard
Suite 780
Vienna, VA 22182
Janet M. Dickson (5) 1,452,313 22.6%
Trustee of the Marich Family Trust
9th Street, No. 101
Greeley, CO 80631
James C. Rambin (4) 1,452,313 22.6%
4032 Bandera Drive
Plano, TX 75074
Brewer Newton (6) 7,000 0.1%
4311 Resort Drive
Granbury, TX 76048
</TABLE>
1. Mr. Gill currently is a member of the Board of Directors of the
Company.
2. The Farkas Trusts are a group of trusts of which the
beneficiaries include family members of Howard L. Farkas, a
former director of the Company. Mr. Farkas disclaims beneficial
ownership of the shares owned by the Farkas Trusts.
3. Windy City, Inc. is a corporation composed of certain interests
of family members of Burton W. Kanter, a former director of the
Company. Mr. Kanter disclaims beneficial ownership of shares
owned by Windy City, Inc.
10
<PAGE>
4. Mr. Rambin currently serves as the President and Chief Executive
Officer of the Company and is a member of the Board of Directors.
Includes 1,452,313 shares of Company Common Stock held by the
Rambin Family Trust over which Mr. Rambin has voting power as
trustee of the Trust. The beneficiaries of the Rambin Family
Trust are Ronald E. Rambin, J. Steven Rambin and Michael C.
Rambin, all of whom are sons of James C. Rambin.
5. The Marich Family Trust is a trust the beneficiaries of which are
family members of Rudy Marich, a former officer and director of
the Company.
6. Mr. Newton serves as the Secretary of the Company and is a member
of the Board of Directors.
On March 9, 1999, the Company entered into a Stock Purchase Agreement
with Park and the Selling Shareholders, which provides for, among other things,
the acquisition by the Company of all of the issued and outstanding shares of
capital stock of Park in exchange for the issuance by the Company of shares of
newly authorized and designated Series A Preferred Stock. Upon the Closing of
the Reverse Acquisition: (i) Park will become a wholly-owned subsidiary of the
Company, (ii) the Selling Shareholders will control approximately 80% of the
votes entitled to be cast at any meeting of the Company's shareholders, and
(iii) the Selling Shareholders' designees shall constitute five out of the six
members on the Company's Board of Directors. Therefore, the Selling Shareholders
will have effective control of the Company after the Reverse Acquisition. (The
transactions contemplated by the Stock Purchase Agreement are described in
greater detail in the Company's Definitive Proxy Statement filed with the
Securities and Exchange Commission on September 7, 1999.)
Item 12. Certain Relationships and Related Transactions.
Each of the Marich Family Trust (the "Marich Trust") and the Rambin
Family Trust (the "Rambin Trust") currently beneficially own 1,452,313 shares of
Company Common Stock, respectively. Each of the Marich Trust's and the Rambin
Trust's beneficial ownership of Company Common Stock represents approximately
23% of the total number of issued and outstanding shares of Company Common Stock
as of September 3, 1999, respectively. James C. Rambin, the President, Chief
Executive Officer, and member of the Board of Directors, of the Company, is the
trustee of the Rambin Trust. Pursuant to the terms of the Stock Purchase
Agreement, at the Closing of the Reverse Acquisition, each of the Marich Trust
and the Rambin Trust shall exchange 1,000,000 shares of Company Common Stock for
100,000 shares of Series A Preferred Stock.
Furthermore, although not set forth in written agreements, the Company,
Park and Mr. Rambin have oral agreements in connection with the Reverse
Acquisition concerning the following matters. First, the parties have agreed
that Mr. Rambin shall serve as an advisory director on the Company's Board of
Directors after the Closing. Second, the parties have agreed that Mr. Rambin
will serve as a consultant to the Company on a retainer basis after the Closing.
The specific terms of such consulting arrangement will be determined by the
parties after the Closing and will be subject to approval by the Company's Board
of Directors.
11
<PAGE>
Third, the parties have made certain agreements with respect to a
contingent bonus granted by the Company to Mr. Rambin. During the Company's 1998
fiscal year, Mr. Rambin requested a bonus of approximately $607,000 for services
rendered as President of the Company. The Board of Directors approved such a
request on the condition that such bonus would be payable by the Company only if
Mr. Rambin were able to successfully negotiate the payment of the bonus or a
portion thereof, in the context of a business combination with another Company,
including, without limitation, by way of an acquisition of the Company or a
merger with the Company. In connection with the transactions contemplated by the
Stock Purchase Agreement, the parties have agreed that Mr. Rambin's contingent
bonus will be satisfied in full by the issuance of 50,000 shares of Series A
Preferred Stock after the Closing by the Company. (The transactions contemplated
by the Stock Purchase Agreement are described in greater detail in the Company's
Definitive Proxy Statement filed with the Securities and Exchange Commission on
September 7, 1999.)
Item 13. Exhibits, List and Reports on Form 8-K.
(a) 1. Financial Statements. Reference is made to the Index on page F-1 for a
list of all Financial Statements filed as part of this Report.
(a) 2. Exhibits. Reference is made to the Exhibit Index on page E-1 for a list
of all exhibits filed as part of this Report.
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company
during the three months ended June 30, 1999.
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Company
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
POWER-CELL, INC.
(Registrant)
By: /s/ James C. Rambin
----------------------------
James C. Rambin, President
and Chief Executive Officer
Date: September 28, 1999
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ James C. Rambin
-----------------------------
James C. Rambin, President
and Chief Executive Officer,
Director
Date: September 28, 1999
By: /s/ Brewer Newton
-----------------------------
Brewer Newton, Director
Date: September 28, 1999
13
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Financial Statements Page
Independent Auditor's Report F-2
Balance Sheet at June 30, 1999 F-3
Statements of Operations for fiscal years 1999, 1998
and for the period from January 21, 1987, to June 30, 1999 F-4
Statements of Shareholders' Equity for the period from January 21, F-5
1987, through June 30, 1999
Statements of Cash Flows for fiscal years 1999, 1998 and for the F-7
period from January 21, 1987, through June 30, 1999
Notes to Financial Statements F-8
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Power-Cell, Inc.
Dallas, Texas
We have audited the accompanying balance sheet of Power-Cell, Inc. (a
development stage enterprise) as of June 30, 1999, and the related statements of
operations, shareholders' equity (deficit) and cash flows for each of the two
years in the period ended June 30, 1999 and the period from July 1, 1989 through
June 30, 1999, which is not separately presented. The period from incorporation
(January 21, 1987) through June 30, 1989, which is not separately presented, was
audited and reported on by other auditors. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Power-Cell, Inc. (a development
stage enterprise) as of June 30, 1999, and the results of its operations and its
cash flows for each of the two years in the period ended June 30, 1999, and the
period from July 1, 1989 through June 30, 1999, which is not separately
presented, in conformity with generally accepted accounting principles.
We have also audited the combination of the accompanying statements of
operations and cash flows for the period from January 21, 1987 (date of
incorporation) to June 30, 1989 into the period from January 21, 1987 to June
30, 1999. In our opinion, such statements have been properly combined.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A, the Company's
significant operating losses and limited financial resources raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note A. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
HEIN + ASSOCIATES LLP
Dallas, Texas
August 13, 1999
F-2
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
BALANCE SHEET
June 30, 1999
ASSETS $ -
- ------ ===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
- -------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 30,748
Payable to officer (Note H) 30,000
-----------
COMMITMENTS AND CONTINGENCIES (Notes D, F, G and H)
SHAREHOLDERS' DEFICIT:
Common stock, $.0001 par value, 750,000,000 shares
authorized; 6,419,540 shares issued and outstanding 642
Additional paid-in capital 1,571,596
Deficit accumulated in the development stage (1,632,986)
-----------
Total shareholders' deficit (60,748)
-----------
Total liabilities and shareholders' deficit $ -
===========
See accompanying notes to financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
POWER-CELL, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
For the period
from January 21,
Years Ended June 30, 1987 (Date of
-------------------------- Incorporation) to
1999 1998 June 30, 1999
--------- ----------- ----------------
<S> <C>
REVENUE -
Interest and other income $ -- $ -- $ 176,724
EXPENSES:
Product development -- -- 225,478
General and administrative 36,602 16,651 1,539,739
Interest -- -- 32,706
Impairment of investment -- 11,787 11,787
----------- ----------- ------------
36,602 28,438 1,809,710
----------- ----------- ------------
NET LOSS $ (36,602) $ (28,438) $ (1,632,986)
=========== =========== ============
NET LOSS PER SHARE (Basic and Diluted) $ * $ *
=========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,419,540 6,216,875
=========== ===========
</TABLE>
* Less than $ (.01)
See accompanying notes to financial statements.
F-4
<PAGE>
<TABLE>
POWER-CELL, INC.
(A Development Stage Enterprise)
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
For the Period From January 21, 1987 (Date of Incorporation)
through June 30, 1999
Deficit
Common Stock Accumulated
Common Stock Subscribed Additional in the
-------------------------- ------------------------- Paid-in Development
Shares Amount Shares Amount Capital Stage
---------- ---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of stock on January 21, 1987 4,356,942 $ 436 - - $ 564 $ -
Net loss - - - - - (255,419)
---------- ---------- ---------- ---------- ------------ ----------
BALANCE, June 30, 1987 4,356,942 436 - - 564 (255,419)
Issuance of stock for legal services
on February 17, 1988 163,385 16 - - 1,234 -
Stock recorded upon reverse
acquisition of Magellan 925,850 93 - - 285,427 -
Exercise of warrants 560,698 56 - - 1,195,194 -
Net loss - - - - - (271,610)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1988 6,006,875 601 - - 1,482,419 (527,029)
Net loss - - - - - (273,357)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1989 6,006,875 601 - - 1,482,419 (800,386)
Net loss - - - - - (310,335)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1990 6,006,875 601 - - 1,482,419 (1,110,721)
Net loss - - - - - (199,455)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1991 6,006,875 601 - - 1,482,419 (1,310,176)
Net loss - - - - - (87,993)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1992 6,006,875 601 - - 1,482,419 (1,398,169)
Net loss - - - - - (64,367)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE, June 30, 1993 6,006,875 601 - - 1,482,419 (1,462,536)
</TABLE>
-Continued-
F-5
<PAGE>
<TABLE>
<CAPTION>
POWER-CELL, INC.
(A Development Stage Enterprise)
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT), Continued
For the Period From January 21, 1987 (Date of Incorporation)
through June 30, 1999
Deficit
Common Stock Accumulated
Common Stock Subscribed Additional in the
------------------------ ------------------------- Paid-in Development
Shares Amount Shares Amount Capital Stage
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Subscription of common stock
on June 30, 1994 -- -- 100,000 25,000 (2,500) --
Net loss -- -- -- -- -- (31,876)
----------- ----------- ----------- ----------- ----------- ----------
BALANCE, June 30, 1994 6,006,875 601 100,000 25,000 1,479,919 (1,494,412)
Issuance of stock subscribed on
July 14, 1994 100,000 10 (100,000) (25,000) 24,990 --
Issuance of stock on July 14, 1994
for commission on June 30,
1994 stock offering 10,000 1 -- -- 2,499 --
Issuance of stock on July 14, 1994 100,000 10 -- -- 24,990 --
Cost of stock issuance-legal fees
and commissions -- -- -- -- (3,500) --
Net loss -- -- -- -- -- (23,194)
----------- ----------- ----------- ----------- ----------- ----------
BALANCE, June 30, 1995 6,216,875 622 -- -- 1,528,898 (1,517,606)
Issuance of stock options for
legal fees -- -- -- -- 12,985 --
Net loss -- -- -- -- -- (29,001)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, June 30, 1996 6,216,875 622 -- -- 1,541,883 (1,546,607)
Issuance of stock options for legal
fees -- -- -- -- 11,109 --
Net loss -- -- -- -- -- (21,339)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, June 30, 1997 6,216,875 622 -- -- 1,552,992 (1,567,946)
----------- ----------- ----------- ----------- ----------- -----------
Issuance of stock to president of
Company for expenses paid 202,665 20 -- -- 15,919 --
Net loss -- -- -- -- -- (28,438)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, June 30, 1998 6,419,540 $ 642 $ -- $ -- $ 1,568,911 $(1,596,384)
Expenses paid by president of
Company -- -- -- -- 2,685 --
Net loss -- -- -- -- -- (36,602)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, June 30, 1999 6,419,540 $ 642 $ -- $ -- $ 1,571,596 $(1,632,986)
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
POWER-CELL, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the Period
from January 21,
1987 (date of
Years Ended June 30, incorporation) to
1999 1998 June 30, 1999
----------- ----------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (36,602) $ (28,438) $(1,632,986)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation -- -- 24,644
Loss on theft of equipment -- -- 741
Issuance of stock options for services -- -- 24,094
Impairment of investment -- 11,787 11,787
Expenses paid by president 2,685 15,939 18,624
Changes in operating assets and liabilities:
Other assets -- -- (16,400)
Payable to officer 30,000 -- 30,000
Accounts payable and accrued expenses 2,800 887 30,748
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (1,117) 175 (1,508,748)
----------- ----------- -----------
INVESTING ACTIVITIES:
Investment in limited partnership -- -- (31,787)
Purchase of office equipment -- -- (8,985)
----------- ----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES -- -- (40,772)
----------- ----------- -----------
FINANCING ACTIVITIES:
Advance received -- -- 20,000
Proceeds from issuance of common stock and
exercise of warrants -- -- 1,533,020
Cost of stock issuance -- -- (3,500)
----------- ----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES -- -- 1,549,520
----------- ----------- -----------
INCREASE (DECREASE) IN CASH (1,117) 175 --
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,117 942 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ -- $ 1,117 $ --
=========== =========== ===========
SUPPLEMENTAL INFORMATION - cash paid
during the period for interest $ -- $ -- $ 32,706
=========== =========== ===========
</TABLE>
NONCASH TRANSACTIONS - Common stock was issued for services and for the
acquisition of Magellan (Note B) in fiscal year 1988.
F-7
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
-------------
Magellan Corporation (Magellan) was incorporated in Colorado on April 28,
1986 for the purpose of raising capital to seek and participate in business
opportunities. Effective February 19, 1988, Magellan completed a merger with
Balzac Investments, Inc. (Balzac) (see Note B), which was incorporated
January 21, 1987, and the resulting entity adopted the name Power Cell, Inc.
(the Company). The Company has had no revenues from operations and is
considered to be in the development stage. The Company has certain rights to
a battery charger product (see Notes D and G).
Loss per Common Share
---------------------
Basic loss per common share is based upon the weighted average number of
common shares outstanding. Diluted loss per share also considers common
stock equivalents in the determination of weighted average shares, unless
the common stock equivalents would be antidilutive. Warrants prior to
exercise are not considered in the computation as their effect would be
antidilutive.
Office Equipment
----------------
Office equipment is recorded at cost. Depreciation is calculated using the
straight-line method over the estimated useful life of the assets. As of
June 30, 1994, the equipment had been fully depreciated.
Organization Costs
------------------
Costs incurred in connection with the organization of Balzac ($16,400) were
capitalized and amortized over five years using the straight-line method.
Cash Equivalents
----------------
For purposes of reporting cash flows, the Company considers demand deposits,
money market accounts and certificates of deposits with an original maturity
of three months or less to be cash equivalents.
Investment in Partnership
-------------------------
The Company has an approximate 7.35% limited partner interest in a
partnership and the investment is carried at cost, net of an allowance for
impairment.
Income Taxes
------------
The Company accounts for deferred income taxes on a liability method,
whereby deferred income taxes are provided for temporary differences between
financial statements and income tax reporting amounts.
Comprehensive Income (Loss)
--------------------------
Comprehensive income is defined as all changes in stockholders' equity,
exclusive of transactions with owners, such as capital investments.
Comprehensive income or loss includes net income or loss, changes in
certain assets and liabilities that are reported directly in equity such as
translation adjustments on investments in foreign subsidiaries, and certain
changes in minimum pension liabilities. The Company's comprehensive loss
was equal to its net loss for the years ended June 30, 1999 and 1998.
F-8
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
Long-Lived Assets
-----------------
In the event that facts and circumstances indicate that the cost of assets
or other assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future undiscounted
cash flows associated with the asset would be compared to the asset's
carrying amount to determine if a write-down to market value or discounted
cash flow value is required.
Continuation as a Going Concern
-------------------------------
The accompanying financial statements and related footnotes have been
prepared assuming the Company will continue as a going concern. The Company
is in the development stage and has incurred significant losses since
inception and has limited financial resources. These factors raise
substantial doubt about the Company's ability to continue as a going
concern. The Company will need to raise capital and/or eventually achieve
profitable operations in order for it to continue as a going concern. The
Company entered into a limited partnership agreement in October 1992 that
management believed would potentially result in successful manufacturing and
marketing of the Company's product and the eventual creation of a royalty
stream to the Company and potential earnings from the Company's interest in
the partnership (see note G). However, all marketing and operations
activities of the partnership have ceased. As described in Note I, in March
1999 the Company entered into an agreement to merge with another company
which management believes will allow the Company to continue as a going
concern.
NOTE B - MERGER
Effective February 19, 1988, Magellan exchanged shares of its common stock
for all of the issued and outstanding common shares of Balzac. The shares
issued represented approximately 83% of the outstanding shares of Magellan
after the merger, and officers and directors of Balzac became the officers
and directors of Magellan. Accordingly, for financial reporting purposes,
Balzac is deemed to have acquired Magellan. The transaction was accounted
for using the purchase method of accounting and was recorded based upon the
value of Magellan's identifiable net assets, net of offering costs. The
accompanying financial statements, during the period prior to the merger,
reflect the historical accounts of Balzac. Magellan's operations are
included in the accompanying financial statements commencing February 19,
1988. Balzac's equity section has been restated from the date of
incorporation to reflect the number of shares which would have been
outstanding under Magellan's $.0001 par value capital structure.
The merger agreement also entitles Balzac's shareholders of record prior to
the merger to a 10% royalty on gross sales of the battery charger product.
NOTE C - SHAREHOLDERS' EQUITY
On December 6, 1986, Magellan received the net proceeds from the sale of
400,000 units (each unit consisting of one share of Magellan's common stock
and one Class A warrant) at $.01 per unit. Each Class A warrant entitled the
holder to purchase at a price of $.02, one share of common stock and one
Class B warrant. Each Class B warrant entitled the holder to purchase, at a
price of $.03, one share of common stock and one Class C warrant. Each Class
C warrant entitled the holder to purchase, at a price of $.04, one share of
common stock and one Class D warrant. Each Class D warrant entitled the
holder to purchase one share of common stock for $.05 per share.
F-9
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
On April 13, 1988, the Company called all Class A, B, C and D warrants for
redemption. Certain warrants were exercised and the Company received
approximately $1,284,000 net of escrow fees and the cost of redeeming the
remaining warrants. Other costs of approximately $88,000 related to the
registration of the warrants have been offset against the proceeds and
charged to additional paid in capital. All outstanding Class A, B, C and D
warrants were redeemed on May 16, 1988.
During fiscal 1995, the Company issued 20,000,000 shares of common stock for
$50,000, $25,000 of which had been subscribed as of June 30, 1994.
Commissions and other expenses related to the stock issuances of 1,000,000
shares of stock and $3,500 of cash were paid.
The Company's board of directors approved a 100 for 1 reverse stock split on
October 25, 1994, which was effective for shareholders of record on November
21, 1994. All shareholders' equity information in the accompanying financial
statements has been restated to reflect the reverse split as if it had
occurred at inception.
During fiscal 1997, the Company granted options to purchase up to 200,000
shares of its common stock for $100 in lieu of legal services valued at
approximately $24,000. The options expire August 31, 2000. The portion of
the services attributable to fiscal years 1997 and 1996 amounted to $11,109
and $12,985, respectively, and were charged to operations in the
accompanying statements of operations.
During fiscal 1998, the Company's board of directors approved the issuance
of 202,665 shares to the president of the Company in repayment of $15,939 of
costs the president paid on the Company's behalf. The majority of the costs
were in connection with a special shareholders' meeting.
NOTE D - ACQUISITION OF BATTERY CHARGER PRODUCT
On January 22, 1987, Balzac entered into an agreement to purchase the
product, Power Cell, and all related technology from the developers. Power
Cell is the trade name of a reserve battery device intended to be stored
until needed and immediately brought to full working capacity by activation.
Balzac paid $150,000 cash (including a total of $52,995 to a director and a
former officer of the Company) for the product and the technology. In
addition, Balzac agreed to make royalty payments to the former owners equal
to $.10 per unit for the first 11.2 million units sold and $.05 per unit for
the next 18 million units sold up to $2,000,000. The two individuals
referred to above are entitled to 45.2% of this royalty. The Company assumed
this royalty obligation pursuant to the merger.
The purchase price was funded by a note payable to a director of the
Company. The principal and accrued interest (total of $176,984) was paid in
July 1988.
NOTE E - INCOME TAXES
The components of the Company's deferred tax accounts are as follows:
F-10
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
June 30,
1998
Deferred tax asset - net operating loss carryforward $ 430,000
Deferred tax asset valuation allowance (430,000)
------------
Net deferred tax asset $ --
============
For federal income tax purposes at June 30, 1999, the Company had a net
operating loss carryover of approximately $1,270,000. If not utilized, the
net operating loss will begin expiring in 2002 through 2019.
NOTE F - RELATED PARTY TRANSACTIONS
During 1988, the Company used Corporate Stock Transfer, Inc. (CST) as its
transfer agent. An officer, director and shareholder of CST was also a
director of the Company in 1988. Total payments to CST by the Company (and
Magellan prior to the merger) through June 30, 1988 were approximately
$13,000. The Company discontinued using CST in 1989. Effective February 19,
1988, the Company entered into a consulting agreement with International
Marketing Visions, Inc. (IMV), which required monthly payments of $1,000 for
a term of thirty months. This agreement expired during fiscal year ended
June 30, 1991 and was not renewed. A family member of a former director of
the Company is a principal shareholder of IMV.
The Company does not have international rights to its battery charger
product. However, the Company is obligated to pay for expenses incurred in
filing foreign patent applications for the product on behalf of certain
directors of the Company and other individuals who hold the international
rights. These amounts are to be repaid out of the 10% royalty discussed in
Note B. The total paid by the Company pursuant to this obligation for the
period from January 21, 1987 (date of incorporation) to June 30, 1998 was
$72,057. These amounts were paid primarily prior to fiscal year 1993, and
the general partner has since assumed the obligation.
NOTE G - LIMITED PARTNERSHIP
In October 1992, the Company entered into a limited partnership agreement
with several other limited partners (including directors and/or significant
shareholders of the Company) and a sole general partner to provide for the
initial testing, and potentially, the management, funding, manufacturing and
marketing of the Power Cell reserve battery unit. In exchange for
contribution of rights to the Power Cell unit the Company initially obtained
an approximate 11% interest in the limited partnership (the Partnership) as
a limited partner, which is subject to certain preference distributions to
the general partner. The Company's initial Partnership interest decreased to
approximately 7.35% at June 30, 1996 due to the admittance of outside
investors into the Partnership. The Company is not involved in the
management of the Partnership.
A separate license royalty agreement between the Company and the
Partnership provides that the Company will be entitled to royalty payments
on all Power Cell units produced and sold in the United States and its
territories equal to 5% to 20% of the annual gross sales of the Partnership
up to a certain sales level as specified in the agreement. A portion of
this royalty was assigned to another party as described below. Royalties on
international sales of Power-Cell units will be paid to individual
international rights holders, some of which are affiliates of the Company
(directors and/or significant shareholders), and all of which are limited
partners in the Partnership.
F-11
<PAGE>
POWER-CELL, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
In connection with the royalty and limited partnership agreements, the
engineering firm that developed the battery product received an approximate
41% of the Company's royalty rights and an approximate 8% interest in the
Partnership. During fiscal year 1998, the Partnership received a settlement
in a lawsuit against the engineering firm which released the 41% royalty
rights and the 8% Partnership interest.
During fiscal 1993, the Company incurred legal fees of $31,787 related to
the acquisition of its interest in the Partnership. The general partner
advanced the Company $20,000 to assist with the legal costs. The terms of
the agreement between the general partner and the Company require the
advance to be repaid, with interest at 10%, from the first royalty payments
which the Company may receive from the Partnership. The Partnership's
activities have ceased and as of June 30, 1998 the management believes the
Company's investment in the Partnership is fully impaired. Consequently, the
investment and related liability have been charged to expense.
NOTE H - CONTINGENCIES
In fiscal 1998, the Company's board of directors approved a request for
compensation of approximately $607,000 for the president of the Company.
However, the board of directors agreed this amount would be due only if the
president could negotiate the payment (or some portion thereof) with an
acquiring or merging company, if any. At June 30, 1998, this amount was
considered a contingent liability and was not recorded in the Company's
financial statements, because payment would be subject to approval by the
management of an acquiring or merging company. As described in Note I, in
fiscal 1999, the Company signed an agreement to merge with another company
and the president negotiated a payment in stock to satisfy the contingent
liability. The stock to be issued the president is 50,000 shares of
preferred stock, which is to be newly authorized if approved by the
Company's shareholders. The stock is to be newly authorized if approved by
the Company's shareholders. the stock is to be convertible to 500,000
shares of the Company's common stock. Based on the trading price of the
common stock, the liability was recorded at $30,000 at June 30, 1999.
NOTE I-PROPOSED MERGER
In March 1999, the company entered into an agreement to acquire all the
outstanding stock of Park Pharmacy Corporation ("Park") in exchange for the
issuance to Park's shareholders of newly authorized preferred stock,
convertible into the Company's common stock. Following the transaction,
Park's shareholders will own about 87% of the Company's voting stock.
Completion of the transaction is subject to approval by the Company's
shareholders.
F-12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary fanancial information extracted from the
financial statements filed as part of this report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000798539
<NAME> Power Cell, Inc.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 60,748
<BONDS> 0
0
0
<COMMON> 642
<OTHER-SE> (61,390)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,602
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,602)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,602)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
