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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended November 30, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ________________ to _______________.
Commission File Number 0-15482
WAVETECH INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 86-0916826
(State or other jurisdictio (I.R.S. Employer Identification No.)
of incorporation or organization)
5210 E. Williams Circle, Suite 200
Tucson, Arizona 85711
(Address of principal executive offices)
(520) 750-9093
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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.
[X] Yes [ ] No
As of January 3, 2000, there were 3,114,806 shares of Common Stock, par value
$.001 per share, outstanding.
Transitional Small Business Disclosure Format (Check One): [ ] Yes [X] No
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<PAGE>
WAVETECH INTERNATIONAL, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets --
November 30, 1999 and August 31, 1999................................. 3
Condensed Consolidated Statements of Operations for the Three Month
Periods Ended November 30, 1999 and November 30, 1998................. 4
Condensed Consolidated Statements of Cash Flows for the Three Month
Periods Ended November 30, 1999 and November 30, 1998................. 5
Notes to Condensed Consolidated Financial Statements --
November 30, 1999..................................................... 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 7
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings.................................................. 10
ITEM 2. Change in Securities............................................... 10
ITEM 3. Defaults upon Senior Securities.................................... 10
ITEM 4. Submission of Matters to a Vote of Security Holders................ 10
ITEM 5. Other Information.................................................. 10
ITEM 6. Exhibits and Reports on Form 8-K................................... 10
SIGNATURES .................................................................11
2
<PAGE>
WAVETECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 1999 AND AUGUST 31, 1999
NOVEMBER 30 AUGUST 31
ASSETS 1999 1999
------------ -----------
(unaudited) (Note 1)
Current assets:
Cash and cash equivalents $ 368,535 $ 889,620
Prepaid expenses and other assets 8,045 8,529
----------- -----------
Total current assets 376,580 898,149
Property and equipment, net accumulated
depreciation of $689,475 and $643,771 1,180,404 363,559
License fee, net of amortization of $129,462
and $9,524 9,545,306 190,476
Note receivable from affiliate 184,000 100,000
Deposits and other assets 16,086 22,211
----------- -----------
Total assets $11,302,376 $ 1,574,395
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 256,256 $ 243,029
Notes payable, current portion 0 13,000
Capital lease obligation, net of current portion 12,900 23,680
Dividends payable 5,626 0
----------- -----------
Total current liabilities 274,782 279,709
Capital lease obligation, net of current portion 0 1,579
Stockholders' equity:
Series A preferred stock, 6% cumulative, par value
$.001 per share; 10,000,000 shares authorized,
561 and 600 shares issued and outstanding
(liquidation value $561,000 and $600,000) 1 1
Common stock, par value $.001 per share;
50,000,000 shares authorized, 3,059,662 and
3,021,288 shares issued and outstanding 3,060 3,021
Additional paid in capital 18,958,174 8,757,946
Accumulated deficit (7,933,641) (7,467,861)
----------- -----------
Total stockholders' equity 11,027,594 1,293,107
----------- -----------
Total liabilities and stockholders' equity $11,302,376 $ 1,574,395
=========== ===========
3
<PAGE>
WAVETECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIODS ENDED NOVEMBER 30, 1999 AND NOVEMBER 30, 1998
1999 1998
----------- -----------
(unaudited) (unaudited)
Revenues $ 0 $ 3,276
Expenses:
Cost of sales (exclusive of depreciation and
amortization shown separately below) 800 4,526
General and administrative 270,058 172,473
Depreciation and amortization 165,641 26,304
----------- -----------
Total expenses 436,499 203,303
Net loss from operations (436,499) (200,027)
Other income (expense):
Interest income 6,472 24,057
Interest expense (820) (3,312)
Merger expenses 0 (11,031)
Miscellaneous income 460 0
Rental income 9,000 9,000
Preferred stock conversion penalty (36,000) 0
----------- -----------
Total other income (expense) (20,888) 18,714
Net loss before preferred dividends (457,387) (181,313)
Cumulative preferred dividends declared 8,393 9,100
----------- -----------
Net loss available to common shareholders $ (465,780) $ (190,413)
=========== ===========
Net loss per common share, basic and diluted $ (0.15) $ (0.06)
=========== ===========
Weighted average number of shares
outstanding, basic and diluted 3,055,912 2,885,154
=========== ===========
4
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WAVETECH INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIODS ENDED NOVEMBER 30, 1999 AND 1998
1999 1998
--------- ----------
(unaudited) (unaudited)
Operating activities:
Net Loss $(457,387) $ (181,313)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 165,641 26,304
Preferred stock conversion penalty 36,000 0
Changes in assets and liabilities:
Decrease (increase) in accounts receivable and
other current assets 6,125 (3,282)
Increase (decrease) in accounts payable and
accrued expenses 20,727 (21,103)
Decrease (increase) in prepaid expenses 484 (5,524)
--------- ----------
Net cash used in operating activities (228,410) (184,918)
Investing activities:
Purchase of property and equipment (183,317)
Increase in notes receivable to affiliate (84,000)
--------- ----------
Net cash used in investing activities (267,317) 0
Financing activities:
Payment on notes payable (13,000) 0
Principal payments on capital lease obligation (12,358) (10,889)
Dividends paid in cash on preferred stock 0 (9,200)
--------- ----------
Net cash used in financing activities (25,358) (20,089)
Net decrease in cash (521,085) (205,007)
Cash and cash equivalents, beginning of period $ 889,620 $2,202,573
--------- ----------
Cash and cash equivalents, end of period $ 368,535 $1,997,566
========= ==========
5
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WAVETECH INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three-month period ended November
30, 1999, are not necessarily indicative of the results that may be expected for
the fiscal year ending August 31, 2000. The balance sheet at August 31, 1999 has
been derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the Company's financial statements for the year ended
August 31, 1999, included in its Form 10-KSB for such fiscal period.
The consolidated financial statements include the accounts of Wavetech
International, Inc. ("the Company") and its wholly owned subsidiaries,
Interpretel, Inc. ("Interpretel") and Telplex International Communications, Inc.
("Telplex"). All material intercompany balances and transactions have been
eliminated. The Statement of Operations for the three-month period ended
November 30, 1998, has been reclassified to conform to the presentation used for
the three-month period ended November 30, 1999.
NOTE 2 -- PER SHARE DATA
Basic earnings (loss) per common share equals diluted earnings (loss) per common
share for all periods presented as the effect of all applicable securities
(preferred stock, stock options and warrants) is anti-dilutive (decrease the
loss per share amount). On December 18, 1998, the Company effected a one-for-six
reverse stock split; all share and per share information have been restated
retroactively to show the effect of this stock split.
NOTE 3 - TRANSACTIONS WITH SOFTALK, INC.
The Company amended its license with Softalk, Inc. ("Softalk"), an Ontario
corporation, on October 25, 1999. As amended, the license agreement grants to
the Company a worldwide, exclusive license to distribute, market, service, sell
and sublicense any and all of Softalk's services and products to commercial
accounts and a worldwide non-exclusive license for individual accounts. The
Company issued five-year warrants to purchase the Company's common stock in
connection with this amendment as follows: 3,246,753 exercisable at $3.25 per
share; 1,000,000 at $5.00 per share; and 1,000,000 at $10.00 per share. The
issuance of such warrants was recorded at an estimated fair value of $154,000 on
the date of this transaction.
On November 13, 1999, the Company, through its subsidiary Interpretel (Canada)
Inc. ("Interpretel (Canada)"), purchased certain assets (products and accounts),
as well as first right-of-refusal on the purchase of Softalk, its intellectual
property, its software code and patents in exchange for 4,329,004 shares of
Class A non-voting preferred stock of Interpretel (Canada) (the "Class A
shares"). The Class A shares are exchangeable on a one-for-one basis for shares
of the Company's Common Stock at any time. The issuance of the Class A shares
was recorded at $10,000,000, the fair value of the Company's Common Shares (into
which the Class A shares can be converted), as of the transaction date.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS CERTAIN STATEMENTS WHICH ARE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF
SECTION 27A OF THE SECURITIES ACT OF 1993, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS RELATE TO FUTURE
EVENTS, INCLUDING THE FUTURE FINANCIAL PERFORMANCE OF WAVETECH. IN SOME CASES,
YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS "MAY,"
"WILL," "SHOULD," "EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES," "ESTIMATES,"
"PREDICTS," "POTENTIAL," OR "CONTINUE" OR THE NEGATIVE OF SUCH TERMS AND OTHER
COMPARABLE TERMINOLOGY. THESE ONLY REFLECT MANAGEMENT'S EXPECTATIONS AND
ESTIMATES ON THE DATE OF THIS REPORT. ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY FROM THESE EXPECTATIONS. IN EVALUATING THOSE STATEMENTS, YOU SHOULD
SPECIFICALLY CONSIDER VARIOUS FACTORS, INCLUDING THE RISKS INCLUDED IN THE
REPORTS FILED BY WAVETECH WITH THE SEC. THESE FACTORS MAY CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS. WAVETECH IS NOT
UNDERTAKING ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN
THIS REPORT.
OPERATIONS OVERVIEW
Effective November 13, 1999, the Company acquired through its wholly owned
subsidiary, Interpretel (Canada), any existing or future Softalk contracts with
customers, distributors and suppliers, as well as first-right-of-refusal on the
purchase of Softalk, its intellectual property, software code and any patents
owned by Softalk (the "Acquisition"). The Acquisition was consummated in
accordance with the terms of a Purchase Agreement between the Company,
Interpretel (Canada), and Softalk, dated as of October 25, 1999. The aggregate
consideration paid by the Company in connection with the Acquisition was
$10,000,000, consisting of 4,329,004 shares of non-voting Class A Preferred
Stock of Interpretel (Canada) (the "Interpretel Preferred Shares"). Each
Interpretel Preferred Share is exchangeable, at the option of Softalk, for one
share of Wavetech Common Stock. As of the date of this Report, such Interpretel
Preferred shares are exchangeable for approximately 58% of the issued and
outstanding shares of Wavetech Common Stock. The aggregate consideration paid in
the Acquisition was determined through arm's length negotiations between
representatives of the Company and Softalk. Neither the Company nor, to the
knowledge of the Company, any affiliate, director or officer of the Company had
any material relationship with Softalk, except for the existing relationship
between the two companies as reflected by that certain Amended and Restated
License Agreement dated as of July 30, 1999. See "Business of Issuer and
Subsidiaries" below.
In a separate transaction, the Company and Softalk agreed to amend their
existing Amended and Restated License Agreement, effective October 25, 1999, to
grant Wavetech and its subsidiaries a worldwide exclusive license to distribute,
market, service, sell and sublicense any and all of Softalk's services and
products (whether now existing or hereafter developed or acquired by Softalk) to
commercial accounts, and a worldwide nonexclusive license to distribute, market,
service, sell and sublicense any and all of Softalk's services and products
(whether now existing or hereafter developed or acquired by Softalk) to
individual customer accounts. In consideration of such Amendment, the Company
issued to Softalk five-year warrants to purchase an aggregate of 5,246,753
shares of Common Stock, 3,246,753 of which have a per share exercise price of
$3.25, 1,000,000 have a per share exercise price of $5.00 and the remaining
1,000,000 have a per share exercise price of $10.00.
Softalk has been granted the right to designate two directors on the Board of
Directors of Wavetech, the parent of Interpretel (Canada). Conversely, Wavetech
has also been granted the right to designate one director on the Softalk Board
of Directors. Softalk, as a private company, will continue to develop software
and, as required, provide technical support to Interpretel (Canada) and
Wavetech. Interpretel (Canada) and Wavetech will provide customer support,
billing services and marketing for Softalk's software products globally on an
exclusive basis to commercial accounts and on a non-exclusive basis to
individual consumer accounts.
During the three-month period ended November 30, 1999, the Company focused
substantially all of its resources on developing its bestnetcall web-enabled
long distance service (see discussion below).
7
<PAGE>
BUSINESS OF ISSUER AND SUBSIDIARIES
OVERVIEW
From 1995 until June 1999, the Company created customized calling card services
through the application of "intelligent" call-processing technology and
proprietary software targeted to the business traveler. The Company marketed
these systems to large organizations or companies for their membership base.
With the wide scale deployment of cellular telephones with messaging capability,
the market for business related calling card services greatly diminished. In
June 1999 the Company discontinued its calling card services.
On April 23, 1999, the Company signed a licensing agreement with Softalk (the
"Softalk License Agreement"), a developer of proprietary Internet Protocol-based
("IP-based") telecommunication technologies ("the Licensed Technology"), based
in Toronto, Ontario. Softalk's technology enables personal computer users who
access the World Wide Web to make long distance telephone calls at substantially
reduced rates from those offered over the Public Switched Telephone Network
("PSTN"). The licensing agreement granted to the Company non-exclusive rights to
market and resell Softalk's patent-pending technology and, in addition, granted
the Company the exclusive right to provide billing and customer support services
for all accounts.
The Company's business strategy is now focused exclusively on providing the
web-enabled long distance service it markets pursuant to the Softalk License
Agreement. Bestnetcall is the Company's brand name for this service. The Company
has begun integrating the proprietary software licensed from Softalk into its
billing system. The Company is also developing its website to launch its
bestnetcall business. Development of the bestnetcall system is anticipated to be
complete by late February 2000. At that time the Company will begin beta testing
the service, followed by a soft launch with preferred corporate clients.
FEATURES AND CAPABILITIES OF THE COMPANY'S SERVICE
Bestnetcall allows companies and individuals to enter long distance calling
information on the Company's World Wide Website at www.bestnetcall.com from
anywhere in the world and to complete such telephone calls at substantially
reduced rates. The Company believes that the Licensed Technology provides the
platform for developing a distributed, intelligent IP-based global network that
manages voice, video and fax traffic for routing and transporting over a
combination of networks, including the Internet, frame relay, Integrated
Services Digital Network ("ISDN"), in addition to the traditional PSTN. The
Licensed Technology is based on Microsoft's NT operating platform, which the
Company believes will play an important role in redefining the next generation
of communication systems within the next five years.
The Company's bestnetcall service uses existing telephone equipment and does not
require the purchase of hardware or software by the customer; users only need
access to the Internet and an available phone line. Bestnetcall also offers
real-time billing to all users. Following completion of a telephone call, the
total cost for that call may be viewed on the caller's online account.
Bestnetcall also offers convenient speed dialing, personalized directories and
client billing code capabilities.
RESULTS OF OPERATIONS
THREE MONTHS ENDED NOVEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
NOVEMBER 30, 1998
REVENUES. The Company had no revenues for the three-month period ended November
30, 1999, as compared to $3,276 for the prior fiscal period. The Company focused
all of its resources on the development of its new bestnetcall service.
COST OF SALES. Cost of sales decreased to $800 for the three-month period ended
November 30, 1999 from $4,526 for the three months ended November 30, 1998. The
$800 consisted of expenses incurred in testing its new bestnetcall long distance
service. Cost of sales for the previous period were costs associated with the
sale of various calling card services, such as long distance and voice and fax
mail services.
8
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GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased to $270,058 for the three months ended November 30, 1999, from
$172,473 for the prior fiscal period. Marketing and advertising fees increased
by $24,768 due to costs associated with creation of web pages for bestnetcall.
Insurance expense increased by $18,390 due to adding Directors and Officers'
Liability Insurance. Travel expenses increased $9,742 due to travel necessary to
complete the agreements with Softalk. Payroll expense increased by $9,186 due to
the hiring of a sales manager.
DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
increased to $165,461 for the three months ended November 30, 1999, from $26,304
for the three months ended November 30, 1998. This increase was due to
amortization on the higher level of license fees and depreciation for the
additional purchases of equipment, software and computer hardware.
INTEREST INCOME. Interest income decreased to $6,472 for the three months ended
November 30, 1999 from $24,057 for the three months ended November 30, 1998. All
of the Company's interest income during the quarter was from its money market
fund. The decrease was attributable to a lower balance in this account.
INTEREST EXPENSE. Interest expense decreased to $820 for the three months ended
November 30, 1999 from $3,312 for the three months ended November 30, 1998. The
decrease in interest expense was related to lower interest costs associated with
outstanding lease payments.
MERGER EXPENSES. The Company had zero costs related to merger expenses for the
current period as compared to $11,031 for the three months ended November 30,
1998. The costs in 1998 were a result of a proposed but terminated merger.
PREFERRED STOCK CONVERSION PENALTY. The Company incurred monthly liquidated
damages to the Preferred Stock holder equal to 2% of the purchase price of the
Preferred Stock for each month in the quarter.
PREFERRED DIVIDENDS. Preferred dividends decreased to $8,393 for the three
months ended November 30, 1999 from $9,100 for the quarter ended November 30,
1998. The decrease was due to a lower number of outstanding shares of Series A
Convertible Preferred Stock; certain shares were converted into common stock on
September 1, 1999. Dividends accumulate, with respect to outstanding shares of
the Preferred Stock, at a rate of 6% per annum and are payable quarterly, and
may be paid in cash or in shares, at the Company's option. The Company has opted
to pay the dividends in stock. The 6% Preferred Stock has a stated value at
$1,000 per share.
LIQUIDITY AND CAPITAL RESOURCES
At November 30, 1999, the Company had cash of $368,535. The Company does not
generate income sufficient to offset the costs of its operations. As a result,
it has historically relied upon issuance of debt or equity in order to raise
capital. On December 21, 1999, the Company executed a promissory note with a
private lender for $2,000,000.
INFLATION
Although the Company's operations are influenced by general economic trends and
technology advances in the telecommunications industry, the Company does not
believe that inflation has had a material effect on its operations.
RISKS ASSOCIATED WITH YEAR 2000
Many older computer systems and software products are coded to accept only two
digit entries in the date code field. These date code fields will need to accept
four digit entries to distinguish 21st century dates from 20th century dates. As
a result, computer systems and/or software used by some companies may need to be
upgraded to comply with such "Year 2000" requirements.
As reported in previous 10-QSBs, the Company hired an independent consultant to
review the Company's main billing program. All assessments of internal systems
and minor modifications have been completed and the Company has determined that
9
<PAGE>
it is compliant with Year 2000 requirements. Total costs for the initial
programming, fees for the outside consultant, associated testing and
modifications were $7,155. Additionally, all hardware and software to provide
the bestnetcall service has been verified to be Year 2000 compliant.
The Company is reliant on other third parties such as utilities, vendors,
telecommunication carriers whose non-compliance or non-readiness could adversely
impact operations. The Company is taking steps to assure third party compliance,
however, there can be no assurance that all such parties will be Year 2000
compliant. As of the date of this report, the Company has not experienced, and
does not anticipate experiencing, any problems with its service due to Year 2000
problems.
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In a separate transaction completed on October 25, 1999, the company issued to
Softalk five-year warrants to purchase an aggregate of 5,246,753 shares of
Common Stock, 3,246,753 of which have a per share exercise price of $3.25,
1,000,000 have a per share exercise price of $5.00 and the remaining 1,000,000
have a per share exercise price of $10.00.
On November 13 1999, the Company, through its wholly owned subsidiary,
Interpretel (Canada), completed the private placement of 4,329,004 shares of
non-voting Class A Preferred Stock of Interpretel (Canada) in consideration for
certain assets of Softalk. The preferred shares were valued of $10,000,000 and
are presently exchangeable, at the option of Softalk, for an aggregate of
4,329,004 shares of the Company's Common Stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
a) Exhibits.
Number Description Method of Filing
------ ----------- ----------------
27 Financial Data Schedule Filed herewith
b) Reports on Form 8-K
None.
10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: January 13, 2000 WAVETECH INTERNATIONAL, INC.
By: /s/ Gerald I. Quinn
-------------------------------------
Gerald I. Quinn
President and Chief Executive Officer
By: /s/ Gerald I. Quinn
-------------------------------------
Gerald I. Quinn
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS, ENDED
NOVEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 368,535
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 376,580
<PP&E> 1,869,879
<DEPRECIATION> (689,475)
<TOTAL-ASSETS> 11,302,376
<CURRENT-LIABILITIES> 274,782
<BONDS> 0
0
1
<COMMON> 3,060
<OTHER-SE> 11,024,533
<TOTAL-LIABILITY-AND-EQUITY> 11,302,376
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 800
<TOTAL-COSTS> 800
<OTHER-EXPENSES> 435,699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 820
<INCOME-PRETAX> (457,387)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (457,387)
<EPS-BASIC> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
