UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 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 number 33-7764-C
INTERACTIVE GAMING & COMMUNICATIONS CORP._____________
(Exact name of registrant as specified in charter)
Delaware 23-2838676
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4070 BUTLER PIKE, PLYMOUTH MEETING, PA 19462-1510
_______
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610)941-0305_
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X ] No [ ]
As of August 31, 1998 there were 15,628,251 shares of the
Registrant's common stock, par value $0.001 per share, issued
and outstanding.
<PAGE>
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
1. Balance Sheets as of June 30, 1998
and December 31, 1997 3
2. Statement of Operations for the six month
periods ended June 30, 1998 and June 30, 4
1997
3. Statements of Cash Flows for the six month
periods ended June 30, 1998 and June 30, 5
1997
4. Notes to consolidated financial statements 6-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibit 27, Financial Data Schedule
(For Electronic Filing Purposes Only) 14
SIGNATURES 15
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
CONSOLIDATED BALANCE SHEET
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998
AND YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
JUNE DEC
1998 1997
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $ - $15,250
Accounts receivable, net of allowance
for doubtful accounts of $113,000 in
1998 and 1997 75,533 68,516
Deferred tax asset - 100,000
Net current assets of discontinued
operations - 529,754
Total current assets 75,533 713,520
EQUIPMENT, Net 77,893 100,420
INTANGIBLE ASSETS:
Systems development costs, net 1,367,595 1,449,235
Gaming and software sub-licenses, net 355,897 377,021
Total intangible assets 1,723,492 1,826,256
OTHER ASSETS:
Security deposits 1,118 1,118
Note receivable 5,000,000 -
Total other assets 5,001,118 1,118
NET NONCURRENT ASSETS OF DISCONTINUED
OPERATIONS - 223,031
TOTAL $6,878,036 $2,864,345
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $286,065 $286,065
Bank overdraft 81,530 74,109
Accounts payable and accrued expenses 581,486 454,039
Net current liabilities of discontinued
operations - 1,601,516
Total current liabilities 949,081 2,415,729
DEFERRED REVENUE 5,000,000 -
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value, 25,000,000 shares
authorized, 15,628,251 and 13,701,290 shares
issued and outstanding in 1998 and 1997,
respectively 15,628 13,701
Additional paid-in capital 1,797,443 2,676,296
Deficit (884,116) (2,241,381)
Total stockholders' equity 928,955 448,616
TOTAL $6,878,036 $2,864,345
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<S> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
1998 1997 1998 1997
(UNAUDITED) (UNAUDITED)
REVENUES:
Gaming and software
licensing fees, net $48,693 $77,000 $68,707 $90,470
Advertising 4,060 3,069 17,601 3,069
Program and design fees 9,677 23,070 56,401 59,715
Rental income - - - -
Other 6,176 20,740 7,338 20,740
Interest income 14 69 32 69
Total revenues 68,620 123,948 150,079 174,063
EXPENSES:
Salaries 67,311 107,290 166,704 241,636
Depreciation and
amortization 62,497 35,431 124,992 69,603
Advertising 518 1,413 648 5,925
Legal and professional 2,228 83,135 56,450 197,371
Rent 11,833 28,137 30,615 54,330
Provision for doubtful
accounts - - - -
Office 13,166 14,775 29,358 28,650
Telephone 8,841 12,172 24,681 22,800
Insurance 4,553 10,117 17,529 20,810
Travel and related expenses 3,335 4,039 10,463 17,457
Other 415 10,395 1,181 14,606
Auto 500 4,500 3,987 10,100
Interest - 5,076 3,532 9,908
Bank charges 1,582 - 13,438 -
Repairs and maintenance - 2,594 312 4,399
Services and other fees - 3,312 - 3,405
Total expenses 176,779 322,386 483,890 701,090
Loss from continuing
operations before taxes
and extraordinary item (108,159) (198,438) (333,811) (527,027)
Income tax expense _ - (100,000) -
Loss from continuing
operations (108,159) (198,438) (433,811) (527,027)
Income from discontinued
operations - (72,959) 134,732 71,703
Loss before extraordinary
item (108,159) (271,397) (299,079) (455,324)
Extraordinary item - - 1,656,344 -
Net (loss) income $ (108,159) (271,397) 1,357,265 (455,324)
Basic (loss) earnings
per common share:
Continued operations $(0.01) $(0.01) $(0.03) $(0.04)
Discontinued operations - (0.01) 0.01 0.01
Extraordinary item - - 0.12 -
Net (loss) income
per share $(0.01) $(0.02) $0.10 $(0.03)
Weighted average common
shares outstanding 13,945,201 13,686,665 13,945,201 3,686,665
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<S> <C> <C>
JUNE JUNE
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $1,357,265 $(455,324)
Adjustments to reconcile net (loss)
income to net cash (used in) provided
by operating activities:
Depreciation and amortization 124,992 69,603
Change in net assets and liabilities of
discontinued operations (1,727,284) 314,181
Deferred income tax benefit 100,000 -
Deferred Revenue 5,000,000 -
(Increase) decrease in assets:
Accounts receivable (7,017) 2,362
Other assets (5,000,000) -
Increase in liabilities,
Accounts payable and accrued expenses 127,466 (121,433)
Net cash (used in) provided by
operating activities (24,598) (190,621)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment - (7,241)
Net cash used in investing
activities - (7,241)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft 7,421 -
Proceeds from notes payable - -
Proceeds from issuance of common stock 1,927 -
Net cash provided by
financing activities 9,348 -
(DECREASE) INCREASE IN CASH (15,250) (197,862)
CASH, BEGINNING 15,250 208,020
CASH, ENDING $ - $10,158
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION, REGULATION AND CERTAIN
SIGNIFICANT RISKS AND UNCERTAINTIES
The Company's financial statements have been presented on the
basis that it is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in
the normal course of business.
The consolidated balance sheet for the period ended June 30,
1998 and the related consolidated statement of operations and
statement of cash flows are unaudited and reflect all normal
and recurring adjustments that are, in the opinion of
management, necessary for a fair presentation of the results
for the interim period. The results of operations for the six
month period ended June 30, 1998 are not necessarily
indicative of the operating results for the full year.
Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted. It is suggested that the accompanying
consolidated financial statements be read in conjunction with
the Summary of Accounting Policies and Notes to the
Consolidated Financial Statements included in the Company's
annual report on form 10-K for the year ended December 31,
1997.
In 1997, the Company's business activities, operations and net
income or loss were derived solely from its two divisions and
four subsidiaries. The Gaming and Licensing Division includes
Sports International, Ltd. (Grenada) ("Sports"), Global Gaming
Corp. (Grenada) ("Global"), and Global Casinos, Ltd.
(Grenada) ("Casinos"). The Advertising/Software Division
includes Intersphere Communications, Ltd. (Grenada)
("Intersphere").
In September 1997, the Company adopted a plan to dispose of
two of its subsidiaries, Sports and Casinos. Effective March
18, 1998, the Company sold Sports and Casinos for debt
forgiveness of $1,656,344 and a $5,000,000 note receivable.
The interest rate on the note is the prime rate. The first
eighteen months of the note only require monthly payments of
interest on the unpaid principal portion. The second eighteen
months require payment of interest plus principal of $27,725
per month. A balloon payment of $4,490,950 is payable on the
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
thirty-seventh month. Interest payments and accruals have
been suspended through July 31, 1998 pending the reopening of
Sports and Casinos by the new owners and management team. The
stock of Sports and Casinos has been pledged by the buyer as
collateral. The sale resulted in a pre-tax gain of
approximately $6,556,344 in 1998 after considering costs
incurred in connection with the sale and operating results
through the date of disposition. As collection of the
$5,000,000 note is uncertain, the Company will defer the gain
on the note and recognize revenue as principal is collected.
Net current assets from discontinued operations were primarily
cash and customer receivables. Net noncurrent assets from
discontinued operations were primarily fixed assets. Net
current liabilities were customers' credit balances, security
deposits and accounts payable and accrued expenses.
The Company's business is conducted through its wholly owned
subsidiaries which are legally organized in Grenada and
licensed by the Grenadan governments to conduct its business.
The subsidiaries' business activities in its Gaming and
Licensing Division emanating from outside Grenada (customers'
wagers) may become materially affected by regulations, laws or
statues that may be promulgated by the various foreign,
federal, state and/or local governments or their respective
agencies in the future or the enforcement of such laws or
regulations. Presently, the Company's wagering operations are
under investigation by the federal government. The
investigation is apparently based on the assumption that there
may be a violation of federal laws if an illegal gambling
business was being conducted from the Company's corporate
offices in Blue Bell, Pennsylvania. Based on the advice of
counsel with significant criminal law, trial and appellate
experience and comprehensive understanding of the
jurisdictional scope of gaming laws, both domestic and
international, management does not believe that the gaming
operations of its subsidiaries violate either the laws of the
United States or the Commonwealth of Pennsylvania, since no
gaming or gambling operations are conducted in the United
States. Management's belief is based principally on its
understanding, as interpreted by its counsel, that the
operations of the Gaming and Licensing Division are legally
authorized in Grenada and, as such, are beyond the scope and
outside the jurisdiction of the United States regulatory
powers and laws relating to gaming activities. In May of
1997, the Company filed an amended motion to quash the
subpoenas issued from the United States District Court on the
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
grounds that the laws of Grenada pertaining to secrecy and
confidentiality could be violated by individual compliance.
The Court denied the motion, noting that the subpoenas were
directed to the Company and not to individuals. On July 30,
1997, the Company made a good faith effort to comply with the
subpoenas and delivered relevant documents. Individuals from
the Company under subpoena have been advised that their
scheduled appearances have been continued indefinitely. The
Company intends to cooperate in all aspects of the
investigation based upon the belief that it has nothing to
hide and has done nothing wrong. No assurance can be given
that management's beliefs are correct as to the legality of
its gambling operations or the Company's basis therefore, nor
any assurance be made that the Company will ultimately prevail
in any judicial proceedings.
In April of 1997, the State of Missouri sought an injunction
in its courts seeking to restrict the Company from offering
the Global Casino through the Internet to Missouri residents.
While not admitting personal jurisdiction, the Company through
counsel agreed not to offer these services to Missouri
residents. The Company posted a notice to this effect within
its Internet web site. Subsequently, an investigator employed
by the State of Missouri accessed the Company's web site;
apparently determining that the Company had breached its
agreement with Missouri. Accordingly, in May of 1997, the
State of Missouri indicted the Company and its President,
Michael F. Simone, and filed a judgement in the amount of
$66,050 for statutory "gambling" violations in Missouri. Both
the Company and Mr. Simone, through their counsel, have
negotiated a settlement amounting to a $2,500 fine for Mr.
Simone and $5,000 fine and $20,000 persecutory and
investigative fees for the Company together with a second
degree misdemeanor plea agreement for each party.
As a result of these investigations and costs to defend its
position that the business of the Gaming Division pertaining
to customer wagering over the Internet does not violate any
federal, state or local statues, the Company completely
divested itself from these activities with the sale of Sports
and Casinos in March 1998.
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements consist of the following
at June 30, 1998 and December 31, 1997:
1998 1997
Furniture, fixtures and equipment $157,353 $157,353
Less accumulated depreciation 79,460 56,933
Total $ 77,893 $100,420
3. INTANGIBLE ASSETS
Intangible assets include system development costs, gaming and
software sub-licenses and are depreciated over a ten year
period beginning in 1997. Intangible Assets consist of the
following as of June 30, 1998 and December 31, 1997:
1998 1997
System Development Costs $1,652,149 $1,652,149
Gaming and Software Sub-license 377,021 377,021
2,029,170 2,029,170
Less accumulated amortization 305,678 202,914
Total $1,723,492 $1,826,256
4. NOTE PAYABLE
On February 24,1997 and April 25, 1997, the Company issued a
promissory note payable to a major shareholder in the amount
of $50,000 and $36,065, respectively. The note bears interest
at 1 1/2% above the national prime as is published from time to
time in the Wall Street Journal.
5. INCOME TAXES
The Company derives all its revenue from its wholly owned
Grenadan subsidiaries. The government of Grenada does not
presently impose income taxes on the Company. In 1997, a
deferred tax asset of $100,000 was recognized for the future
tax consequences attributable to U.S. net operating loss
carryforwards of approximately $300,000, which expire in 2012.
In March 1998 the Company realized gain on debt forgiveness
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
related to its sold subsidiaries and provided for a $100,000
tax provision thereby utilizing its deferred tax asset.
Reconciliation of the U.S. federal statutory rate to the
Company's effective tax rate on continuing operations follows:
1997 1998
U.S. federal statutory tax rate 34.0% 34.0%
Non-U.S. net operating loss carryforwards (27.8) (21.0)
Net operating loss carryforwards with no
current tax benefit (13.0)
Effective tax rate on continuing operations 6.2% 0.0%
Income taxes will be recognized on the installment basis for
both financial and income tax purpose on the collection of the
$5,000,000 note from the sale of Sports and Casinos. There is
about $100,000 basis in the subsidiaries; therefore, principal
collection on the note will be fully taxable.
6. CONTINGENCY
Litigation relating to the investigation as discussed in Note
17 to the consolidated financial statements included in the
Company's latest annual report, and discussed further in Note
1 included by reference, has not been resolved to date.
Litigation relating to the State of Missouri as discussed in
Note 1 included by reference has not been finalized to date.
Although the Company intends to defend vigorously any action
that may be ultimately brought by the United States or the
State of Missouri, no assurance can be given that management's
beliefs as to the alleged criminality of its subsidiaries'
operations, or its basis for such beliefs, are correct and
that the Company will prevail.
<PAGE>
INTERACTIVE GAMING & COMMUNICATIONS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. DISCONTINUED OPERATIONS
The financial statements reflect the operating results and
balance sheet items of the discontinued operations separately
from continuing operations. Prior years have been restated.
Operating results for the discontinued operations for the three
months ended June 30, 1998 and 1997 were:
1998 1997
Gross handle
$ 0 $11,510,461
Less customer win
0 11,260,957
Net win 0 249,504
Other revenues 0 60,958
Net win and other revenues 0 310,462
Expenses 0 383,421
Net income $ 0 $ (72,959)
Operating results for the discontinued operations for the six
months ended June 30, 1998 and 1997 were:
1998 1997
Gross handle $1,426,568 $29,420,808
Less customer win 1,198,942 28,587,720
Net win 227,626 833,088
Other revenues 11,102 152,136
Net win and other revenues 238,728 985,224
Expenses 103,996 913,521
Net income $ 134,732 $ 71,703
8. Common Stock Transactions
The Company authorized the issuance of restricted common stock
as an employee stock bonus to certain employees and consultants
assisting in the sale of Sports and Casino in the amount of
1,929,961 and recognized expense in the amount of $1,927.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial
position and operating results during the periods included in the
accompanying consolidated financial statements.
Results of Operations
For the six month period ended June 30,1998 and 1997 the statement
of operations reflects a decrease in revenues from continuing
operations amounting to $23,984 or 13%. This decrease was
attributable a reduction in licensing fees for 1998. Expenses from
continuing operations decreased by $217,200 in 1998 resulting from
the consolidation of management and employees to a more economic
and efficient facility together with a reduction in administrative
personnel. Loss from continuing operations decreased from $527,027
in 1997 to $433,811 in 1998.
For the three month periods ended June 30, 1998 and 1997 revenues
from continuing operations decreased $55,328. Revenues from
continuing operations include licensing, advertising, and Internet
related Web design fees. The decrease in revenues resulted from
the postponement of certain licensing fees, which the Company
anticipates, will be recovered in future period. Expenses
decreased from $322,386 in 1997 to $176,779 in 1998. This decrease
resulted from consolidating management and employees in a more
economical and efficient facility together with a reduction in
administrative personnel. Loss from continuing operations
decreased by $90,279 in 1998 or about 45%.
There was no income from discontinued operations for the quarter
ended June 30, 1998 since the gaming subsidiaries were sold during
the first quarter of 1998.
Liquidity and Capital Resources
Current liabilities exceed current assets by $873,548 in 1998
compared to $1,702,209 in 1997. The reduction in the working
capital deficit resulted from the sale of Sports and Casinos. The
Company anticipates further reductions in future periods as the
$5,000,000 note amortizes. Further capital resources is
anticipated with increased licensing activities and the development
and sale of new Internet gaming software.
<PAGE>
Government Regulation - Effect on Financing
The Company's business is legally constituted and organized in
Grenada, West Indies, and a license fee is paid to the
Grenadan government to conduct its business in the Gaming and
Licensing Division. The Company's business activities
emanating from the United States (customers' wagers) may be
materially affected by regulations and actions that may now be
in place or will be promulgated in the future by the various
local, state, and/or federal government regulators. However,
with the sale of Sports and Casinos in 1998, the Company is no
longer involved with customers' wagers. But there continues
to remain the uncertainty of how the U.S. and other world
governments will look upon gambling on the Internet which may
deter major financial and/or investment companies from
participating in any capital venture with the Company. In
this regard, on February 19, 1997, the Company was served with
a warrant to produce all records involving gambling activities
emanating from the U.S. The Company has co-operated with the
U.S. Attorney's office in Philadelphia in providing such
records. In addition, the State of Missouri in April 1997
sought an injunction in its courts seeking to restrict the
Company from offering the Global Casino through the Internet
to Missouri residents. While not admitting personal
jurisdiction, the Company through its counsel agreed not to
offer these services to Missouri residents. The Company
posted a notice to this effect within its Internet web site.
Subsequently, an investigator employed by the State of
Missouri accessed the Company's web site; apparently
determining that the Company had breached its agreement with
Missouri. Accordingly, in May of 1997, the State of Missouri
indicted the Company and its President, Michael F. Simone, and
filed a judgement in the amount of $66,050 for statutory
"gambling" violations in Missouri. Both the Company and Mr.
Simone, through their counsel, have negotiated a settlement
amounting to a $2,500 fine for Mr. Simone and $5,000 fine and
$20,000 persecutory and investigative fees for the Company
together with a second degree misdemeanor plea agreement for
each party.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Notes 1 and 6 of notes to consolidated
financial statements.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter
ended June 30, 1998. The Exhibits filed as part of this
report is listed below.
Exhibit No. Description
27 Financial Data Schedule
<PAGE>
Item 6. Exhibit 27 - Financial Data Schedule
(For Electronic Filing Purposes Only)
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AND STATEMENT OF
OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
Cash $ 0
Marketable Securities 0
Notes and Accounts Receivable 188,533
Allowances for Doubtful Accounts 113,000
Inventory 0
Total Current Assets 75,533
Property, Plant and Equipment 157,353
Accumulated Depreciation 79,460
Total Assets 6,878,036
Total Current Liabilities 949,081
Bonds, Mortgages and Similar Debt 0
Preferred Stock - Mandatory Redemption 0
Preferred Stock - No Mandatory Redemption 0
Common Stock 15,628
Other Stockholders' Equity 913,327
Total Liabilities and Stockholders' Equity 6,878,036
Net Sales of Tangible Products 0
Total Revenues 150,079
Cost of Tangible Goods Sold 0
Total Costs and Expenses App. to Sales and Revenues 0
Other Costs and Expenses 480,358
Provision for Doubtful Accounts 0
Interest and Amortization of Debt Discount 3,532
Income Before Taxes and Other Items (333,811)
Income Tax Expense 100,000
Income/Loss Continuing Operations (433,811)
Discontinued Operations 134,732
Extraordinary Items 1,656,344
Cumulative Effect-Changes in Accounting Principles 0
Net Income or Loss 1,357,265
Earnings Per Share - Primary 0.10
Earnings Per Share - Fully Diluted 0.10
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERACTIVE GAMING & COMMUNICATION CORP.
Dated: August 31, 1998
By: /s/ MICHAEL F. SIMONE
Michael F. Simone, President
and Chief Executive Officer
By: /s/ FRED MICHINI
Fred Michini, Chief Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 188533
<ALLOWANCES> 113000
<INVENTORY> 0
<CURRENT-ASSETS> 75533
<PP&E> 157353
<DEPRECIATION> 79460
<TOTAL-ASSETS> 6878036
<CURRENT-LIABILITIES> 949081
<BONDS> 0
0
0
<COMMON> 15628
<OTHER-SE> 913327
<TOTAL-LIABILITY-AND-EQUITY> 6878036
<SALES> 0
<TOTAL-REVENUES> 150079
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 480358
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3532
<INCOME-PRETAX> (333811)
<INCOME-TAX> 100000
<INCOME-CONTINUING> (433811)
<DISCONTINUED> 134732
<EXTRAORDINARY> 1656344
<CHANGES> 0
<NET-INCOME> 1357265
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
