SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] 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 0-16203
Delta Petroleum Corporation
(Exact name of registrant as specified in its charter)
Colorado 84-1060803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 17th Street, Suite 3310
Denver, Colorado 80202
(Address of principal (Zip Code)
executive offices)
(303) 293-9133
(Registrant's telephone number, including area code)
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___
5,488,858 shares of common stock $.01 par value were outstanding
as of May 10, 1998.
FORM 10-QSB
3rd QTR.
FY 1998
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets - March 31, 1998 and
June 30, 1997 (unaudited). . . . . . . . . . . . . .1
Consolidated Statements of Operations -
Three and Nine Months Ended
March 31, 1998 and 1997 (unaudited). . . . . . . . .3
Consolidated Statement of Stockholders' Equity
Year Ended June 30, 1997 and
Nine Months Ended March 31, 1998 (unaudited) . . . .5
Consolidated Statements of Cash Flows -
Nine Months Ended
March 31, 1998 and 1997 (unaudited). . . . . . . . .6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis
Or Plan of Operations . .. . . . . . . . . . . . . .9
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities. . . . . . . . . . . . . . . 12
Item 3. Defaults upon Senior Securities. . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . 12
Item 5. Other Information. . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 12
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, June 30,
1998 1997
ASSETS
Current Assets:
Cash $240,631 393,048
Trade accounts receivable, net of
allowance for doubtful accounts of $50,000 at
March 31, 1998 and $48,722 at June 30, 1997 262,604 333,535
Other current assets 10,100 10,100
Total current assets 513,335 736,683
Property and Equipment:
Oil and gas properties, at cost (using
the successful efforts method
of accounting):
Undeveloped offshore California properties 6,959,830 6,959,830
Undeveloped onshore domestic properties 730,315 714,605
Developed onshore domestic properties 3,410,794 3,383,523
Office furniture and equipment 80,446 80,446
11,181,385 11,138,404
Less accumulated depreciation and depletion (2,132,223) (2,059,461)
Net property and equipment 9,049,162 9,078,943
Investment in Bion Environmental
Technologies, Inc. (Bion) 1,237,607 503,328
Accounts receivable from officer
and affiliates 108,388 119,419
$10,908,492 10,438,373
March 31, June 30,
1998 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable trade $522,777 776,702
Other accrued liabilities 48,947 21,835
Royalties payable 314,026 468,968
Total current liabilities 885,750 1,267,505
Stockholders' Equity
Preferred stock, $.10 par value;
authorized 3,000,000 shares; none issued - -
Common stock, $.01 par value;
authorized 300,000,000 shares, issued 5,436,758
shares at March 31, 1998 and 5,230,631
shares at June 30, 1997 54,368 52,306
Additional paid-in capital 25,393,235 24,950,128
Cumulative unrealized gain (loss) 621,130 (213,969)
Accumulated deficit (16,045,991) (15,617,597)
Total stockholders' equity 10,022,742 9,170,868
Commitments and contingencies
$10,908,492 10,438,373
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31, March 31,
1998 1997
Revenue:
Oil and gas sales $210,808 448,772
Gain on sale of oil and gas properties 216,273 -
Other revenue 94,541 67,710
Total revenue 521,622 516,482
Expenses:
Lease operating expenses 79,560 158,340
Depreciation and depletion 48,591 71,213
Exploration expenses 192,386 51,191
Abandoned and impaired properties - 21,718
Minimum royalty-related party 350,000 350,000
General and administrative 304,292 482,819
Stock option expense 4,922 9,397
Total expenses 979,751 1,144,678
Net loss ($458,129) (628,196)
Basic loss per common share ($0.08) (0.12)
Weighted average number of common
shares outstanding 5,436,758 5,122,216
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
March 31, March 31,
1998 1997
Revenue:
Oil and gas sales $1,004,069 1,228,121
Gain on sale of oil and gas properties 650,417 -
Other revenue 236,419 188,543
Total revenue 1,890,905 1,416,664
Expenses:
Lease operating expenses 268,796 406,944
Depreciation and depletion 201,262 250,616
Exploration expenses 418,828 340,925
Abandoned and impaired properties - 202,226
Minimum royalty- related party 350,000 350,000
General and administrative 1,063,682 1,421,226
Stock option expense 16,731 33,433
Total expenses 2,319,299 3,005,370
Net loss ($428,394) (1,588,706)
Basic loss per common share ($0.08) (0.32)
Weighted average number of common
shares outstanding 5,316,348 4,982,443
<TABLE>
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
Year ended June 30, 1997 and nine months ended March 31, 1998
(Unaudited)
<CAPTION>
Additional
Preferred Stock Common Stock paid-in
Shares Amount Shares Amount capital
<S> <C> <C> <C> <C> <C>
Balance, July 1, 1996 160 $16 4,488,283 44,882 21,299,784
Unrealized gain on equity securities - - - - -
Stock options granted as compensation - - - - 40,469
Preferred stock converted into common stock (160) (16) 396,601 3,966 (3,950)
Shares issued for cash upon exercise of options - - 186,700 1,867 758,977
Shares issued for undeveloped oil and gas properties - - 63,000 630 172,620
Shares issued for developed oil and gas properties - - 500 5 1,604
Shares issued for services - - 7,500 75 29,925
Amortization of consulting expense - - - - -
Shares reacquired and retired - - (4,070) (40) (18,022)
UFG settlement - - 92,117 921 2,668,721
Net loss - - - - -
Balance, June 30, 1997 - - 5,230,631 52,306 24,950,128
Unrealized gain on equity securities - - - - -
Stock options granted as compensation - - - - 16,731
Shares issued for cash upon exercise of options - - 37,000 370 53,380
Shares issued for cash - - 156,950 1,570 348,430
Shares issued for services - - 22,500 225 64,463
Shares reacquired and retired - - (10,323) (103) (39,897)
Net loss - - - - -
Balance, March 31, 1998 - $- 5,436,758 54,368 25,393,235
</TABLE>
<TABLE>
Cumulative
Unamortized unrealized
consulting gain Accumulated
expense (loss) deficit Total
<CAPTION>
<S> <C> <C> <C> <C>
Balance, July 1, 1996 (105,000) (255,184) (13,160,590) 7,823,908
Unrealized gain on equity securities - 41,215 - 41,215
Stock options granted as compensation - - - 40,469
Preferred stock converted into common stock - - - -
Shares issued for cash upon exercise of options - - - 760,844
Shares issued for undeveloped oil and gas properties - - - 173,250
Shares issued for developed oil and gas properties - - - 1,609
Shares issued for services - - - 30,000
Amortization of consulting expense 105,000 - - 105,000
Shares reacquired and retired - - - (18,062)
UFG settlement - - - 2,669,642
Net loss - - (2,457,007) (2,457,007)
Balance, June 30, 1997 - (213,969) (15,617,597) 9,170,868
Unrealized gain on equity securities - 835,099 - 835,099
Stock options granted as compensation - - - 16,731
Shares issued for cash upon exercise of options - - - 53,750
Shares issued for cash - - - 350,000
Shares issued for services - - - 64,688
Shares reacquired and retired - - - (40,000)
Net loss - - (428,394) (428,394)
Balance, March 31, 1998 - 621,130 (16,045,991) 10,022,742
</TABLE>
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Nine Months Ended
March 31, March 31,
1998 1997
<CAPTION>
<S> <C> <C>
Net cash used in operating activities ($1,092,666) (1,238,543)
Cash flows from investing activities:
Additions to property and equipment (544,496) (638,257)
Proceeds from sale of oil and gas properties 1,023,432
Proceeds from sale of securities available for sale 46,532 -
Net cash provided by (used in) investing activities 525,468 (638,257)
Cash flows from financing activities:
Stock issued for cash upon exercise of options 53,750 741,781
Issuance of common stock for cash 350,000 -
Decrease (Increase) in accounts receivable from
officer and affiliates 11,031 (66,743)
Net cash provided by financing activities 414,781 675,038
Net decrease in cash (152,417) (1,201,762)
Cash at beginning of period 393,048 1,629,738
Cash at end of period $240,631 427,976
Non-cash financing activities:
Shares issued for oil and gas properties - 174,859
</TABLE>
See accompanying notes to consolidated financial statements.
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Nine Months Ended March 31, 1998 and 1997
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to Form
10-QSB and, in accordance with those rules, do not
include all the information and notes required by generally
accepted accounting principles for complete financial statements.
As a result, these unaudited consolidated financial statements
should be read in conjunction with the Company's audited
consolidated financial statements and notes thereto filed with
the Company's most recent annual report on Form 10-KSB. In the
opinion of management, all adjustments, consisting only of normal
recurring accruals, considered necessary for a fair presentation
of the financial position of the Company and the
results of its operations have been included. Operating results
for interim periods are not necessarily indicative of the results
that may be expected for the complete fiscal year.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings per Share (Statement No. 128) effective for
periods ending after December 15, 1997. Statement No. 128
changes the computation, presentation and disclosure requirements
for earnings per share for entities with publicly held
common stock or potential common stock. Under such requirements
the Company is required to present both basic earnings per share
and diluted earnings per share. Basic earnings per share
is computed by dividing income (loss) available to common
stockholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings per share
is computed by dividing income (loss) available to common
stockholders by all dilutive potential common shares outstanding
during the period. The Company adopted the provisions of
Statement No. 128 as of December 31, 1997. The application of
Statement No. 128 did not have an effect on the presentation of
basic earnings per common share for any prior periods.
(2) Investments
The Company adopted Statement of Financial Standards No. 115
as of July 1, 1994. The Company's investment in Bion
Environmental Technologies, Inc. (Bion) is classified as an
available for sale security and reported at its fair market
value, with unrealized gains and losses excluded from earnings
and reported as a separate component of stockholders' equity.
During the nine months ended March 31, 1998, the Company realized
a gain on the sale of securities available for sale of $41,506
which is included in other income.
The cost and estimated fair market value of its investment
in Bion at March 31, 1998 and June 30, 1997 are as follows:
Estimated
Unrealized Market
Cost Gain/(Loss) Value
March 31, 1998 $616,477 621,130 1,237,607
June 30, 1997 $717,297 (213,969) 503,327
(3) Stockholder s Equity
On December 23, 1997, the Company completed a sale of
156,950 shares of the Company's Common stock to an industry
participant for net proceeds to the Company of $350,000.
The Company received proceeds from the exercise of options
to purchase shares of its common stock of $53,750 during the nine
months ended March 31, 1998.
During the nine months ended March 31, 1998, the Company s
president exercised options to purchase 32,000 shares of the
Company's common stock. Payment for the shares of
common stock purchased upon exercise of the option was made in
shares of the Company's common stock previously owned by the
Company s president, valued at the market price on the
date of exercise. The Company recorded the 10,323 shares of the
Company s common stock reacquired at cost, which shares were
subsequently retired.
The Company issued 22,500 shares of the Company s common
stock to a former employee as a part of a severance package.
This transaction was recorded at its estimated fair
market value of the common stock issued, which was based on the
quoted market price of the stock at the time of issuance. The
Company also agreed to forgive approximately $20,000 in
debt owed to the Company by the former employee.
Item 2. Management's Discussion and Analysis or Plan of
Operations
Liquidity and Capital Resources.
At March 31, 1998, the Company had a working capital deficit
of $372,415 compared to a working capital deficit of $530,822 at
June 30, 1997.
The Company's current liabilities include royalties payable
of $314,026 at March 31, 1998 which represent the Company's
estimate of royalties payable on production attributable to
the Company's 91.68% owned subsidiary, Amber Resources Company
("Amber"), interest in certain wells in Oklahoma, including
production prior to the acquisition of Amber. The Company
believes that the operators of the affected wells have paid some
of the royalties on behalf of the Company and have withheld such
amounts from revenues attributable to the Company's interest in
the wells. The Company has contacted the operators of the wells
in an attempt to determine what amounts the operators have paid
on behalf of the Company over the past five years, which amounts
would reduce the amounts owed by the Company. To date the
Company has not received information adequate to allow it to
determine the amounts paid by the operators. The Company has
been informed by its legal counsel that the applicable statue
of limitations period for actions on written contracts arising in
the state of Oklahoma is five years. The statute of limitation
has expired for royalty owners to make a claim for a portion
of the estimated royalties that had previously been accrued.
Accordingly, these amounts have been written off and recorded as
other income.
The Company believes that it is unlikely that all claims
that might be made for payment of the royalties payable would be
made at one time. Further, Amber rather than Delta, would
be directly liable for payment of such claims. The Company
believes, although there can be no assurance, that it may
ultimately be able to settle with potential claimants for less
than the amounts recorded for royalties payable.
The Company expects to raise additional capital by selling
its common stock in order to fund its capital requirements for
its portion of the costs of the drilling and completion of both
development and exploratory wells on its proved undeveloped
properties during the next twelve months. There is no assurance
that it will be able to do so or that it will be able to do so
upon terms that are acceptable. The Company does not currently
have a credit facility with any bank and it has not determined
the amount, if any, that it could borrow against its existing
properties. The Company will continue to explore additional
sources of both short-term and long-term liquidity to fund its
working capital deficit and its capital requirements for
development of its properties including establishing a credit
facility, sale of equity or debt securities and sale of
non-strategic properties. Many of the factors which may affect
the Company's future operating performance and liquidity are
beyond the Company's control, including oil and natural gas
prices and the availability of financing.
On December 23, 1997, the Company completed a sale of
156,950 shares of the Company's Common stock to an industry
participant for net proceeds to the Company of $350,000.
The Company received the proceeds from the exercise of
options to purchase shares of its common stock of $53,750 during
the nine months ended March 31, 1998.
After evaluation of the considerations described above,
the Company believes that its cash flow from its existing
producing properties, proceeds from the sale of producing
properties, and other sources of funds will be adequate to fund
its operating expenses and satisfy its other current liabilities
over the next year or longer.
Results of Operations
Net Earnings (Loss). The Company reported a net loss for
the three and nine months ended March 31, 1998 of $458,129 and
$428,394 compared to net loss of $628,196 and $1,588,706 for the
three and nine months ended March 31, 1997.
Revenue. Total revenue for the three and nine months ended
March 31, 1998 were $521,622 and $1,890,905 compared to $516,482
and $1,416,664 for the three and nine months ended March 31,
1997, respectively. Oil and gas sales for the three and nine
months ended March 31, 1998 were $210,808 and $1,004,069 compared
to $448,772 and $1,228,121 for the three and nine months ended
March 31, 1997, respectively. The Company's oil and gas sales
were impacted by a decrease in oil and gas prices and the sale of
certain oil and gas properties.
Production volumes and average prices received for the three
and nine months ended March 31, 1998 and 1997 are as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997 1998 1997
Production:
Oil (barrels) 1,501 2,187 10,045 6,908
Gas (Mcfs) 95,490 152,792 357,952 479,171
Average Price:
Oil (per barrel) $13.15 $19.85 $17.22 $20.78
Gas (per Mcf) $2.00 $2.65 $2.32 $2.26
Lease Operating Expenses. Lease operating expenses were
$79,560 and $268,796 for the three and nine months ended March
31, 1998 and $158,340 and $406,944 for the three and nine
months ended March 31, 1997, respectively. On a Mcf equivalent
basis, lease operating expenses were $.76 and $.64, respectively,
per Mcf equivalent during the three and nine months
ended March 31, 1998 compared to $.95 and $.78, respectively, per
Mcf equivalent for the same periods in 1997.
Depreciation and Depletion Expense. Depreciation and
depletion expense for the three and nine months ended March 31,
1998 was $48,591 and $201,262 compared to $71,213 and
$250,616 for the same period in 1997. On a Mcf equivalent
basis, depreciation and depletion expense was $.47 and $.48,
respectively, per Mcf equivalent during the three and nine months
ended March 31, 1998 compared to $.43 and $.48, respectively, per
Mcf equivalent for the same periods in 1997.
Abandoned and Impaired Expense. The company recorded an
expense for abandonment and impairment of oil and gas properties
of $21,718 and $202,226 relating to dry holes for the
three and nine months ended March 31, 1997, respectively.
Exploration Expenses. Exploration expenses consist of
geological and geophysical costs and lease rentals. Exploration
expenses the three and nine months ended March 31, 1998 were
$192,386 and $418,828 compared to $51,191 and $340,226 for the
same period in 1997. Exploration costs were attributed to the
Company's participation in the shooting of 3-D seismic
on prospects in the Sacramento Basin in Northern California. By
virtue of this seismic activity, the Company has identified
numerous new drilling locations. Recently the Company began
drilling on these properties and expects to continue doing so for
the next few years.
General and Administrative Expenses. General and
administrative expenses for the three and nine months ended March
31, 1998 were $304,292 and $1,063,682 compared to $482,819
and $1,421,226 for the same periods in 1997. General and
administrative expenses for the three and nine months ended March
31, 1998 decreased from the prior year as a result of a decrease
in salaries and public relation expenses.
Future Operations
The Company's Offshore California proved undeveloped reserves
are attributable to its interests in four federal units (plus one
additional lease) located offshore California near Santa
Barbara. While these interests represent ownership of substantial
oil and gas reserves classified as proved undeveloped, the cost
to develop the reserves will also be very substantial. The
Company may be required to farm out all or a portion of its
interests in these properties if it cannot fund its share of the
development costs. There can be no assurance that the Company
can farm out its interests on acceptable terms. If the Company
were to farm out its interests in these properties, its share of
the proved reserves attributable to the properties would be
decreased substantially. The Company may also incur substantial
dilution of its interests in the properties if it elects to use
other methods of financing the development costs.
These units have been formally approved and are regulated by
the Minerals Management Service of the Federal Government.
However, due to a history of opposition to offshore drilling
and production in California by some individuals and groups, the
process of obtaining all of the necessary permits and
authorizations to develop the properties will be lengthy and even
after all required approvals are obtained, lawsuits may possibly
be filed to attempt to further delay the development of the
properties. While the Federal Government has recently attempted
to expedite this process, there can be no assurance that it will
be successful in doing so. The Company does not have a
controlling interest in and does not act as the operator of any
of the offshore California properties and consequently will not
control the timing of either the development of the properties or
the expenditures for development. Management and its
independent engineering consultant have considered these factors
relating to timing of the development of the reserves in the
preparation of the reserve information relating to these
properties. As additional information becomes available in the
future, the Company's estimates of the proved undeveloped
reserves attributable to these properties could change, and such
changes could be substantial.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. The Company is not engaged in any
material pending legal proceedings to which the Company or its
subsidiaries are a party or to which any of its property is
subject.
Item 2. Changes in Securities. None.
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 8-K.
(a) Exhibits.
27. Financial Data Schedule.
(b) Reports on Form 8-K:
May 23, 1997 Item 5. and 7.
April 9, 1998 Item 5., 7., and 9.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DELTA PETROLEUM CORPORATION
(Registrant)
/s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman of the Board, Treasurer
and Chief Financial Officer
/s/Kevin K. Nanke
Kevin K. Nanke, Controller and
Principal Accounting Officer
Date: May 13, 1998
INDEX
(2) Plan of Acquisitions, Reorganization, Arrangement,
Liquidation, or Succession. Not applicable.
(3) Articles of Incorporation and By-laws. The Articles of
Incorporation and Articles of Amendment to Articles of
Incorporation and By-laws of the Registrant were filed as
Exhibits 3.1, 3.2, and 3.3, respectively, to the Registrant's
Form 10 Registration Statement under the Securities and Exchange
Act of 1934, filed September 9, 1987, with the Securities and
Exchange Commission and are incorporated herein by reference.
Statement of Designation and Determination of Preferences of
Series A Convertible Preferred Stock of Delta Petroleum
Corporation is incorporated by Reference to Exhibit 28.3 of the
Current Report on Form 8-K dated June 15, 1988. Statement of
Designation and Determination of Preferences of Series B
Convertible Preferred Stock of Delta Petroleum Corporation is
incorporated by reference to Exhibit 28.1 of the Current Report
on Form 8-K dated August 9, 1989.
(4) Instruments Defining the Rights of Security Holders.
Not applicable.
(9) Voting Trust Agreement. Not applicable.
(10) Material Contracts. Not applicable.
(11) Statement Regarding Computation of Per Share Earnings. Not
applicable.
(12) Statement Regarding Computation of Ratios. Not applicable.
(13) Annual Report to Security Holders, Form 10-Q or Quarterly
Report to Security Holders. Not applicable.
(16) Letter re: Change in Certifying Accountants. Not applicable.
(17) Letter re: Director Resignation. Not applicable.
(18) Letter Regarding Change in Accounting Principals. Not
applicable.
(19) Previously Unfiled Documents. Not applicable.
(21) Subsidiaries of the Registrant. Not applicable.
(22) Published Report Regarding Matters Submitted to Vote of
Security Holders. Not applicable.
(23) Consent of Experts and Counsel. Not applicable.
(24) Power of Attorney. Not applicable.
(27) Financial Data Schedule. File wherewith electronically.
(99) Additional Exhibits. Not applicable.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 240,631
<SECURITIES> 0
<RECEIVABLES> 262,604
<ALLOWANCES> 50,000
<INVENTORY> 0
<CURRENT-ASSETS> 513,335
<PP&E> 11,181,385
<DEPRECIATION> 2,132,223
<TOTAL-ASSETS> 10,908,492
<CURRENT-LIABILITIES> 885,750
<BONDS> 0
0
0
<COMMON> 54,368
<OTHER-SE> 9,968,374
<TOTAL-LIABILITY-AND-EQUITY> 10,908,492
<SALES> 1,004,069
<TOTAL-REVENUES> 1,890,905
<CGS> 0
<TOTAL-COSTS> 2,319,299
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (428,394)
<INCOME-TAX> 0
<INCOME-CONTINUING> (428,394)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (428,394)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
