<PAGE> 1
UNITED STATES
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 June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
---------------- --------------
Commission file number: 33-11059-A
TELESERVICES INTERNATIONAL GROUP INC.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in it charter)
FLORIDA 59-2773602
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 SECOND AVENUE SOUTH, SUITE 1000, ST. PETERSBURG, FLORIDA 33701
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(813) 895-4410
- -------------------------------------------------------------------------------
(issuer's telephone number)
VISITORS SERVICES INTERNATIONAL CORP.
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed
by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: AS OF AUGUST 13, 1997, OF THE
ISSUER'S COMMON STOCK, $.0001 PAR VALUE, THERE WERE 26,797,421 SHARES
OUTSTANDING.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE> 2
TELESERVICES INTERNATIONAL GROUP INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1996 and
June 30, 1997 (Unaudited) 3
Unaudited Consolidated Statements of Operations
Three Months and Nine Months ended
June 30, 1997 and
June 30, 1996 and
Audited September 30, 1996 4
Unaudited Consolidated Statements of Cash Flows
Nine Months ended
June 30, 1997 and
June 30, 1996 and
Audited September 30, 1996 5
Notes to Financial Statements (Unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 9-10
SIGNATURE PAGE 11
</TABLE>
2
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TELESERVICES INTERNATIONAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, 1997 SEPT. 30, 1996
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(Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ (238,053) $ 51,546
Cash, restricted 150,000 150,000
Accounts receivable, net of allowance
for doubtful accounts 343,723 266,494
Other Current Assets 133,513 89,122
------------ ------------
Total current assets 389,183 557,162
Investment in related party 341,223 357,052
Equipment, net of accumulated depreciation 1,563,496 1,219,592
Goodwill 1,572,989 --
Other assets 558,983 27,155
------------ ------------
Total assets $ 4,425,874 $ 2,160,961
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses 3,015,577 $ 1,154,272
Loans payable, stockholders 2,049,879 412,659
Accrued interest payable, stockholders 212,626 69,639
Accrued payroll and taxes 248,691 123,718
Unearned revenue 15,904 --
Unearned franchise fee 225,000 --
Capital leases payable, current portion 110,164 55,934
Notes payable, current portion 268,636 147,202
------------ ------------
Total current liabilities 6,146,477 1,963,424
Notes payable, net of current portion 66,138 324,730
Capital leases payable, net of current portion 188,135 56,886
------------ ------------
Total liabilities 6,400,750 2,345,040
------------ ------------
Stockholders' (deficit):
Preferred stock, $.001 par value
None issued and outstanding -- --
Common stock, $.0001 par value 2,570 1,597
Additional paid-in capital 11,352,284 5,676,066
Accumulated (deficit) (13,329,730) (5,861,742)
------------ ------------
Total stockholders' (deficit) (1,974,876) (184,079)
------------ ------------
Total liabilities and stockholders' (deficit) $ 4,425,874 $ 2,160,961
============ ============
</TABLE>
See accompanying notes
3
<PAGE> 4
TELESERVICES INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
three and nine months ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30, SEPT. 30, 1996
1997 1996 1997 1996 (AUDITED)
--------------- --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 820,993 $ 145,032 $ 1,669,598 $ 401,740 $ 791,949
--------------- --------------- --------------- --------------- ---------------
Operating Expenses:
Salaries and payroll taxes 1,713,992 479,311 3,915,742 1,385,114 2,227,669
Contract services 550,195 217,529 1,195,842 269,815 435,111
Rent 54,363 (5,456) 257,616 74,568 145,040
Telephone 278,487 143,130 824,567 357,098 534,757
Travel and entertainment 410,390 74,251 1,024,349 214,233 330,752
Advertising and promotion (322,123) 16,222 250,309 62,624 87,023
Depreciation 146,641 57,333 406,462 189,874 192,836
Amortization 50,639 -- 98,358 -- --
Other expenses $ 637,117 $ 51,635 $ 1,320,316 $ 260,352 $ 611,906
--------------- --------------- --------------- --------------- ---------------
Total operating expenses 3,519,701 1,033,955 $ 9,293,561 $ 2,813,678 $ 4,565,094
--------------- --------------- --------------- --------------- ---------------
Net (loss) from operations (2,698,708) (888,923) (7,623,963) (2,411,938) (3,773,145)
Other income (expenses):
Gain on sale of securities -- -- 74,171 -- --
Interest income 22,980 967 34,845 5,000 7,796
Interest (expense) (98,506) (4,727) (192,642) (49,294) (93,768)
--------------- --------------- --------------- --------------- ---------------
Net (loss) $ (2,774,234) $ (892,683) $ (7,707,589) $ (2,456,232) $ (3,859,117)
=============== =============== =============== =============== ===============
Net (loss) per share: $ (.11) $ (.05) $ (.36) $ (.16) $ ( .22)
=============== =============== =============== =============== ===============
Weighted Average Shares 24,930,706 16,767,230 21,573,898 15,836,465 17,673,901
Outstanding =============== =============== =============== =============== ===============
</TABLE>
See accompanying notes.
4
<PAGE> 5
TELESERVICES INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine months ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30, TWELVE MONTHS ENDED
1997 1996 SEPTEMBER 30, 1996 (AUDITED)
----------- ----------- ---------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $(7,707,589) $(2,456,232) $(3,859,117)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Decrease in accounts receivable 3,621 (24,983) (179,392)
Depreciation expense 406,462 189,874 192,836
Amortization 98,358
Prepaid Sponsorship Fee (500,000)
Increase (decrease) in accounts payable
and accrued expenses 1,287,849 468,066 992,856
Increase in accrued payroll and taxes 124,973 21,245 93,685
Increase in accrued interest to stockholder 142,987 33,503 69,639
Stock issued for services 256,444 60,000 78,000
Other (176,955) (59,134) (111,032)
----------- ----------- -----------
Net cash (used in) operating activities (6,063,850) (1,767,661) (2,722,525)
----------- ----------- -----------
Cash flows from investing activities:
(Acquisition) of equipment (516,358) (393,616) (885,619)
(Acquisition) of new business (572,737) -- --
----------- ----------- -----------
Net cash (used in) investing activities (1,089,095) (393,616) (885,619)
----------- ----------- -----------
Cash flows from financing activities:
Cash proceeds from loans from stockholders 1,469,278 359,535 (48,915)
Issuance of common stock 5,420,747 1,681,512 3,277,373
Proceeds from (repayment of) leases payable 185,479 (35,514) (46,624)
Proceeds from notes payable -- -- 485,196
Repayment of notes payable (212,158) -- (13,264)
----------- ----------- -----------
Net cash provided by financing activities 6,863,346 2,005,533 3,653,766
----------- ----------- -----------
Increase (decrease) in cash (289,599) (155,744) 45,622
Cash, beginning of period 51,546 155,744 155,744
----------- ----------- -----------
Cash, end of period $ (238,053) $ -- $ 201,366
=========== =========== ===========
Interest paid $ 192,642 $ 10,791 $ 21,066
=========== =========== ===========
Income taxes paid $ -- $ -- $ --
=========== =========== ===========
</TABLE>
See accompanying notes
5
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TELESERVICES INTERNATIONAL GROUP INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
NOTE A
The accompanying consolidated financial statements include the
accounts of TeleServices International Group Inc. ("TSIG") and its
subsidiaries, Visitors Services International Corp. (acquired on September 26,
1996), American International Travel Agency, Inc. (wholly owned since December
6, 1996), and GuaranTEE Time, Inc. (wholly owned since February 24, 1997). The
consolidated group of companies are collectively referred to herein as "TSIG."
All significant inter-company accounts and transactions have been eliminated.
TSIG was incorporated in Florida on October 1, 1986, for the purpose
of seeking potential business opportunities through the acquisition of an
existing business. Prior to the acquisition, TSIG was a shell company with no
material assets, liabilities or operations.
Visitors Services International Corp. ("VSI") was incorporated in
November, 1992 under the laws of the State of Florida and commenced operations
in June 1993 to provide automated reservations and information services
specifically designed to support the special needs of convention and visitors
bureaus and other organizations.
American International Travel Agency, Inc. ("AIT") was incorporated in
1977 in the State of Florida to provide retail leisure travel services, but has
expanded its customer base to include commercial travel services. On December
6, 1996, TSIG consummated the acquisition of all the capital stock of AIT in
exchange for 31,579 shares of common stock in Phoenix Information Systems
Corp., an affiliated entity. The acquisition was accounted for under the
purchase method. Results of operations were immaterial for the period
December 6, 1996 through December 31, 1996.
GuaranTee Time, Inc. ("GTT") was incorporated in 1995 in the State of
Wisconsin to provide automated tee-time scheduling for daily-fee golf courses
and their customers and commenced operations in March 1996 with their first
local network of nine participating golf courses in Milwaukee, Wisconsin.
NOTE B
The accompanying financial statements have been prepared by the
Registrant without audit and are the responsibility of TSIG's management. The
financial information reflects all normal recurring adjustments which, in the
opinion of management, are deemed necessary for a fair presentation of the
results for the interim periods. The results for the interim periods are not
necessarily indicative of the results to be expected for the year.
The accompanying financial statements have been prepared on the basis
of accounting principles applicable to a going concern. Accordingly, these
financial statements do not include adjustments, if any, which might be
necessary should TSIG be unable to continue as a going concern.
NOTE C
The attached summarized financial information does not include all
disclosures required to be included in a complete set of financial statements
prepared in conformity with generally accepted
6
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accounting principles. Reference is made to the Form 10-KSB for the fiscal
year ended September 30, 1996 and consolidated financial statements of TSIG at
September 30, 1996, included in its annual report on Form 10-KSB for such
disclosures. Such Form 10-KSB, including without limitation financial
statements, should be read in conjunction with the data herein.
NOTE D
Loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding during the year.
NOTE E
During December, 1996, TSIG, through VSI, acquired certain assets,
assumed certain liabilities and acquired the operating business of Global
Reservation Systems, Inc. ("GRS"), a Colorado corporation. GRS was in a
business similar to VSI. As a part of the GRS business combination, TSIG agreed
to issue up to 135,000 shares of TSIG common stock over a three year period
contingent upon the acquired business achieving certain predetermined net
income amounts and also achieving certain percentages of net income as a
percent of revenue. The accompanying financial statements do not include the
effect of the issuance of these shares due to these contingencies, the outcome
of which cannot presently be determined.
During January, 1997, TSIG, through VSI, acquired and took possession
of all the assets of International Reservation Services, Limited ("IRSL") and
intends to utilize all such assets to operate the former business of IRSL as
the business of VSI. VSI acquired these assets from IRSL as a result of a
bankruptcy proceeding of IRSL. IRSL filed a voluntary petition for relief under
Chapter 11 of Title 11, USC, in the United States Bankruptcy Court District of
Connecticut, case number 96-51396, on August 21, 1996. VSI was granted first
priority lien on IRSL's assets, by replacing U.S. Transportation Systems, Inc.
("USTS") as senior lender to IRSL, when VSI paid to USTS the amount of
$388,737.25, on January 20, 1997. Pursuant to Section 9-505 of the Uniform
Commercial Code, VSI took possession and title to all of IRSL's assets, free
and clear of liens, claims and encumbrances on January 21, 1997 in accordance
with the Court's Order dated January 17, 1997, which Order permitted VSI to act
as a "Replacement Lender" in the bankruptcy proceeding by paying the debts owed
by IRSL to USTS and thereby succeeding to all right, title, and interest of
USTS in and to any and all claims against IRSL and any and all collateral
securing such claims and succeeding to all the rights of USTS, including the
right to take immediate possession of all assets. VSI also paid $184,000 to the
Connecticut Department of Development ("DED") on January 20, 1997, to remove
the DED's secured claim lien on IRSL assets.
NOTE F
On August 8, 1997, an additional 1,100,000 shares of common stock were
issued to Robert P. Gordon upon the exercise of options. This issuance reduced
the amount of loans owed to Mr. Gordon by $2,325,000.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
In December 1996, the Registrant acquired American International
Travel Agency, Inc. (AIT). In February 1997, the Registrant acquired GuaranTEE
Time, Inc. (GTT). In December 1996, Visitors Services International Corp.
(VSI), a subsidiary of the Registrant, acquired the assets of Global
Reservation Systems, Inc. (GRS). In January 1997, VSI acquired all the assets
of International Reservation Services, Limited (IRSL). The financial statements
have been prepared on an historical cost, consolidated basis to reflect these
acquisitions; the statements include all adjustments which in the opinion of
management are necessary in order to make the financial statements not
misleading.
For the nine months ended June 30, 1997, the Registrant had revenues
of $1,669,598, compared to revenues of $401,740 for the nine months ended June
30, 1996. This increase in revenues was due to increases in the number of calls
received by the Registrant, which is primarily the result of the acquisition of
AIT, GRS, and IRSL, as well as some increases from existing and new customers
of VSI.
Operating expenses for the nine months ended June 30, 1997 were
$9,293,561, compared to operating expenses of $2,813,678 during the nine months
ended June 30, 1996. These increases are the result of absorbing the operating
spending of the acquisitions noted, as well as increased spending as a result
of higher direct costs associated with the rising volumes noted above;
expansion of the Registrant's call center operations in St. Petersburg; MIS
(primarily related to the development and implementation of a new reservation
system); Sales and Marketing (primarily sponsorship fees and increases in
personnel); and General and Administrative (primarily increases in personnel).
This spending is in support of the Registrant's growth plans, and is expected
to continue at this level for the foreseeable future.
The Registrant sustained a net loss of $7,707,589 for the nine months
ended June 30, 1997, compared to a net loss of $2,456,232 for the nine months
ended June 30, 1996. This increased loss was the result of additional spending
noted above, partially offset by the increases in revenue. The Registrant
expects these losses to continue for the foreseeable future.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Registrant had stockholders equity (deficit)
of $(1,974,876), compared with stockholders equity (deficit) of $(394,960) at
June 30, 1996. Working Capital decreased from $(1,415,398) at June 30, 1996 to
$(5,757,294) as of June 30, 1997. These decreases are the result of the
operating losses noted above, which are expected to continue for the
foreseeable future. The Registrant does not expect that the cash flow necessary
to meet its near term liquidity needs will be available from operations, and
the Registrant will require additional financing to continue operations. There
is no assurance that this financing will be available in the amount required or
available on terms which are satisfactory to the Registrant.
8
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PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings: None
ITEM 2. Changes in Securities:
On June 12, 1997 the Registrant issued 201,645 shares of restricted
common stock to complete the share-for-share exchange offer with the remaining
minority interest shareholders of the Registrant's subsidiary, Visitors
Services International Corp. ("VSI"). The exchange offer, which commenced on
September 26, 1996, did not involve the use of underwriters or the payment of
any commissions. The Registrant believes that the exchange offer was exempt
from registration pursuant to Section 4(2) and Rule 506 of Regulation D of the
Securities Act of 1933, as amended. The Registrant now owns 100% of VSI.
ITEM 3. Defaults Upon Senior Securities: None
ITEM 4. Submissions of Matters to a Vote of Security Holders: None
ITEM 5. Other Information:
The following information relates to matters that occurred both during
and after the fiscal quarter covered by this Form 10-QSB for the quarter ended
June 30, 1997:
A. MATTERS RELATED TO THE "VISITORS SERVICES, INC. EMPLOYEE BENEFIT AND
CONSULTING SERVICES COMPENSATION PLAN" (THE "VSI PLAN")
On February 28, 1997 Mr. Gordon was granted 1,000,000 options under
the VSI Plan eligible to purchase shares registered on Form S-8 at an
exercise price of $2.25 per share. Mr. Gordon exercised these options on May
27, 1997.
On June 12, 1997 Robert P. Gordon, Chairman, was granted 500,000
options under the VSI Plan eligible to purchase shares registered on Form S-8
at an exercise price of $2.25 per share. Mr. Gordon exercised these options on
August 8, 1997.
On August 1, 1997, the Registrant increased the number of shares
eligible to be issued under the VSI Plan from 7,500,000 to 10,000,000 shares of
common stock of the Registrant.
On August 6, 1997 Robert P. Gordon, Chairman, was granted an
additional 1,500,000 options under the VSI Plan and eligible to purchase shares
registered on Form S-8 at an exercise price of $2.00 per share. Mr. Gordon
exercised 600,000 of these options on August 8, 1997.
In total, 2,100,000 shares were issued to Mr. Gordon as a result of
the exercise of options described above, which resulted in a cancellation of
debt of $4,575,000 owed to Mr. Gordon for loans made to the Registrant.
B. LOANS FROM THIRD-PARTY LENDERS
On July 21, 1997 the issued Registrant borrowed $450,000 from a group
of unaffiliated, third-party lenders. The debt is evidenced by a series of
six-month promissory notes, and is secured by marketable securities in the name
of the Registrant's subsidiary, VSI, and the personal guarantee of Robert P.
Gordon.
9
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ITEM 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Exhibit
Number Description
------- -----------
2.1 Agreement and Plan of Reorganization between Dynasty Capital
Corporation and Visitors Services International Corp., dated
September 26, 1996. (2)
2.2 Asset Purchase Agreement between Visitors Services International
Corp. and Global Reservation Systems, Inc., dated December 23,
1996. (3)
2.3 Stock Purchase Agreement between Visitors Services International
Corp. and GuaranTEE Time, Inc., dated February 21, 1997. (4)
3.3 Bylaws as restated October 18, 1996 (5)
3.5 Articles of Incorporation, as amended and currently in effect.
(1)
27 Financial Data Schedule. (6)
- --------------------------
(1) Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ending March 31, 1997.
(2) Incorporated by reference to Exhibit 2.1 to the Registrant's Form 8-K
dated and filed on September 30, 1996.
(3) Incorporated by reference to Exhibit 2.2 to the registrant's Form 8-K
dated December 23, 1996, and filed on February 27, 1997.
(4) Incorporated by reference to Exhibit 2.3 to the registrant's Form 8-K
dated February 24, 1997, and filed on March 11, 1997.
(5) Incorporated by referenced to Exhibit 3.3 to the Registrant's Form 8-K
dated October 17, 1996, and filed on October 23, 1996.
(6) Filed herewith.
(b) Reports on Form 8-K.
The following reports on Form 8-K were filed during the quarter ended June
30, 1997:
The Registrant filed a Current Report on Form 8-K/A-1 on April 7, 1997,
date of earliest event: January 21, 1997, reporting the Registrant's filing of
an amendment to the Form 8-K providing the required financial statements of the
acquisition of all the assets of International Reservation Services, Limited.
The Registrant filed a Current Report on Form 8-K/A-1 on May 12, 1997,
date of earliest event: February 24, 1997, reporting the Registrant's filing of
an amendment to the Form 8-K providing the required financial statements of the
acquisition of all the outstanding capital stock of GuaranTEE Time, Inc.
10
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TELESERVICES INTERNATIONAL GROUP INC.
Dated: August 14, 1997 /s/ Robert P. Gordon
-------------------------------------------
Robert P. Gordon, Chairman and Director
/s/ Raymond P. Wilson
-------------------------------------------
Raymond P. Wilson, Chief Financial Officer
11
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
2.1 Agreement and Plan of Reorganization between Dynasty Capital
Corporation and Visitors Services International Corp., dated
September 26, 1996. (2)
2.2 Asset Purchase Agreement between Visitors Services International
Corp. and Global Reservation Systems, Inc., dated December 23,
1996. (3)
2.3 Stock Purchase Agreement between Visitors Services International
Corp. and GuaranTEE Time, Inc., dated February 21, 1997. (4)
3.3 Bylaws as restated October 18, 1996 (5)
3.5 Articles of Incorporation, as amended and currently in effect.
(1)
27 Financial Data Schedule
</TABLE>
- --------------------------
(1) Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ending March 31, 1997.
(2) Incorporated by reference to Exhibit 2.1 to the Registrant's Form 8-K
dated and filed on September 30, 1996.
(3) Incorporated by reference to Exhibit 2.2 to the registrant's Form 8-K
dated December 23, 1996, and filed on February 27, 1997.
(4) Incorporated by reference to Exhibit 2.3 to the registrant's Form 8-K
dated February 24, 1997, and filed on March 11, 1997.
(5) Incorporated by referenced to Exhibit 3.3 to the Registrant's Form 8-K
dated October 17, 1996, and filed on October 23, 1996.
(6) Filed herewith.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> (238,053)
<SECURITIES> 0
<RECEIVABLES> 343,723
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 389,183
<PP&E> 2,280,498
<DEPRECIATION> 717,002
<TOTAL-ASSETS> 4,425,874
<CURRENT-LIABILITIES> 6,146,477
<BONDS> 0
0
0
<COMMON> 2,570
<OTHER-SE> (1,977,446)
<TOTAL-LIABILITY-AND-EQUITY> 4,425,874
<SALES> 1,669,598
<TOTAL-REVENUES> 1,669,598
<CGS> 0
<TOTAL-COSTS> 7,623,963
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,707,589)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,707,589)
<EPS-PRIMARY> (.36)
<EPS-DILUTED> 0.00
</TABLE>
