U.S. 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
DECEMBER 31, 1999
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: 000-20277
WORLD SHOPPING NETWORK, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2872782
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
1530 Brookhollow Drive, Suite C, Santa Ana, California 92705
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (714) 427-0760
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Stock, $0.001 Par Value; Class A Warrants; Class B Warrants; Units
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) been subject to such filing
requirements for the past 90 days. Yes No X .
As of December 31, 1999, the Registrant had 12,515,405 shares of
common stock issued and outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF December 31, 1999
AND DECEMBER 31, 1998 3
STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED DECEMBER 31, 1999
AND DECEMBER 31, 1998 4
STATEMENTS OF CASH FLOWS FOR THE THREE
MONTHS ENDED DECEMBER 31, 1999 AND
DECEMBER 31, 1998 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. PLAN OF OPERATION 12
PART II
ITEM 1. LEGAL PROCEEDINGS 14
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 15
ITEM 5. OTHER INFORMATION 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURE 15
PART I.
ITEM 1. FINANCAL STATEMENTS.
WORLD SHOPPING NETWORK, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS U.S.A. GROWTH, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31, 1999 December 31, 1998
ASSETS
Current Assets
Checking/Savings
Cash and Cash Equivalents 12,536 17,574
Restricted Cash 454,540 0
Total Checking/Savings 467,076 17,574
Accounts Receivable
Accounts Receivable, Net 7,438 37,624
Total Accounts Receivable 7,438 37,624
Other Current Assets
Inventory Asset 7,984 7,984
Stock Subscription
Receivable 0 14,500
Total Other Current Assets 7,984 22,484
Total Current Assets 482,498 77,682
Fixed Assets
Fixed Assets, Net 34,401 27,173
Total Fixed Assets 34,401 27,173
Other Assets
Other Assets, Net 1,474 2,256
Total Other Assets 1,474 2,256
TOTAL ASSETS 518,373 107,111
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable, Net 11,416 24,411
Total Accounts Payable 11,416 24,411
Other Current Liabilities
Note Payable - Tristar Dv. 45,000 0
Total Other Current
Liabilities 45,000 0
Total Current Liabilities 56,416 24,411
Long Term Liabilities
Long Term Liability, Net 0 (401)
Total Long Term Liabilities 0 (401)
Total Liabilities 56,416 24,010
Equity
Capital Stock 544,238 276,612
Investments - GrowthNet Inc. 455,583 0
Preferred Stock 666,439 666,439
Retained Earnings (1,072,346) (779,301)
Net Income (131,957) (80,649)
Total Equity 461,957 83,101
TOTAL LIABILITIES & EQUITY 518,373 107,111
See Accompanying Notes to Unaudited Financial Statement
WORLD SHOPPING NETWORK, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS U.S.A. GROWTH, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Three Months Ended
December 31, 1999 December 31, 1998
Ordinary Income/Expense
Income
Bank Credit 0 366
Fee Income 8,479 13,076
Mall Sales 187 0
Unreimbursed Expenses 0 (2,523)
Uncategorized Income 219 1,576
Total Income 8,885 12,495
Gross Profit 8,885 12,495
Expense
Advertising 1,575 75
Automobile Expense 3,474 622
Bank Service Charges 62 86
Commissions 0 6,000
Contributions 0 50
Domain Name 805 0
Equipment Rental 1,010 0
Insurance 112 736
Leases 0 210
Miscellaneous 1,248 958
Office Supplies 25 1,821
Payroll Expenses 0 7,774
Postage and Delivery 252 31
Printing and Reproduction 500 197
Professional Fees 49,992 37,444
Rent 3,420 4,712
Service Bureau 417 2,099
Supplies 604 0
Taxes 0 1,269
Telephone 5,224 5,795
Travel & Ent 413 0
Total Expense 69,131 69,879
Net Ordinary Income (60,246) (57,384)
Other Income/Expense
Other Expense
Other Expenses 0 2,750
Total Other Expense 0 2,750
Net Other Income 0 (2,750)
Net Income (60,246) (60,134)
See Accompanying Notes to Unaudited Financial Statement
WORLD SHOPPING NETWORK, INC. AND SUBSIDIARY
(FORMERLY KNOWN AS U.S.A. GROWTH, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Three Months
Ended Ended
December 31, 1999 December 31, 1998
OPERATING ACTIVITIES
Net income (60,246) (60,134)
Adjustments to reconcile net
Income to net cash provided by
operations:
Accounts receivable (1,308) 1,542
Accounts Payable (14,263) (2,889)
Note Payable - Tristar Dev. 45,000
Net cash provided by operating
Activities (30,817) (61,481)
INVESTING ACTIVITIES
Fixed assets, computer
Equipment (729)
Net cash provided by
investing activities (729)
FINANCING ACTIVITIES
Long term liability,
Foothill Bank loan (366)
Capital stock 76,500
Net cash provided by
financing activities 76,134
Net cash increase for period (31,546) 14,653
Cash at beginning of period 98,122 2,921
Cash at end of period 66,576 17,574
See Accompanying Notes to Unaudited Financial Statement
WORLD SHOPPING NETWORK, INC. AND SUBSIDIARY
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization and Nature of Operations
The Registrant was originally was incorporated as USA Growth,
Inc. on August 14, 1987 in the State of Delaware. The Registrant
has adopted a June 30 fiscal year-end (based on a resolution of
the Board of Directors, dated November 22, 1999). In September
1999 the Registrant entered into a merger agreement with World
Shopping Network, Inc., a Wyoming corporation ("WSN") (a
development stage company). WSN operates an Internet shopping
mall and other Internet related services. As a result of the
merger, the Registrant changed its name to World Shopping
Network, Inc.
Accounting Method
The Registrant uses the accrual method of accounting for
financial statement and tax return purposes.
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Registrant and its wholly-owned subsidiary,
Growth Net Inc., a Nevada corporation. Intercompany transactions
have been eliminated in the consolidation.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Registrant considers all highly liquid instruments purchased
with an original maturity of three moths or less to be cash
equivalents.
Concentration of Credit Risk.
Cash balances are maintained at several banks. Accounts at each
institution are insured by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000.
Income Taxes
The Registrant complies with Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes", which
requires an asset and liability approach to financial reporting
of income taxes. Deferred income tax assets and liabilities are
computed for differences between the financial statements and tax
bases of assets and liabilities that will result in taxable or
deductible amounts in the future. Deferred tax assets and
liabilities are based on enacted tax laws and rates applicable to
the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when
necessary, to reduce deferred income tax assets to the amount
expected to be realized.
Income (Loss) per Common Share
Effective July 31, 1998, the Registrant adopted SFAS No. 128,
"Earnings Per Share". SFAS No. 128 requires dual presentation of
basic and diluted earnings per share for all periods presented.
Basic earnings/loss per share is computed by dividing income
(loss) applicable to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted
earnings/loss per share reflects the potential dilution that
could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted
in the issuance of common stock that shared in the earnings of
the entity. At July 31, 1999 and 1998, the Registrant has
unexercised common stock warrants to purchase 16,000,000
(1,333,333 post-split) shares. Such warrants were not included
in the computations of diluted loss per share because their
effect would have been antidilutive. See Note 3.
The computations of income or loss per share of common stock are
based on the weighted average number of shares outstanding during
the period, retroactively adjusted for the stock split discussed
in Note 3.
NOTE 2: RESCINDED INVESTMENTS AND TERMINATED MERGERS
In 1988, the Registrant issued 3,500,000 (291,667 post-split)
restricted shares of common stock, for all of the outstanding
common stock of Factory Outlets of America, Inc. (FOA), a
franchisor of general merchandise stores. In accordance with the
agreement, the Registrant contributed $250,000 to FOA's
additional paid-in capital. In 1990, this agreement was
rescinded as FOA failed to achieve the specified profit levels,
and 3,080,000 (256,667 post-split) shares of restricted stock
were returned to the Registrant. The Registrant issued the
remaining 420,000 (35,000 post-split) shares to the underwriter
as compensation for services rendered. As a result of this
transaction, the Registrant incurred total expenses of $270,734,
which consisted of acquisition and organization costs of $20,734,
and the write-off of its investment in FOA of $250,000.
On July 1, 1997, the Registrant entered into an agreement with
World Wide Web Casinos, Inc. (WWWC), whereby the Registrant and
WWWC would merge into WWWC Acquisition Corporation, in a tax-free
transaction. On January 28, 1998, WWWC informed the Registrant
that it was unable to provide audited financial statements, which
was one of the conditions for consummating the merger. As a
result, WWWC terminated the merger.
NOTE 3: STOCKHOLDERS' EQUITY
On February 16, 1988, the Registrant successfully completed its
public offering and sold 8,000,000 (666,666 post-split) units at
$.10 per unit. Each unit consists of one share of restricted
common stock and one Class A redeemable common stock purchase
warrant. Each Class A warrant entitles the holder to purchase,
for $.17 ($2.04 post split), one share of common stock and one
Class B common stock purchase warrant, through December 31, 1999.
The Registrant has the right to redeem the unexercised warrants
on thirty days written notice for $.001 per warrant. Each Class
B warrant entitles the holder to purchase one share of common
stock at $.25 ($3.00 post-split) per share and is exercisable
through December 31, 1999.
NOTE 4: RELATED PARTY TRANSACTIONS
On February 2, 1998, the Registrant issued 130,000 (10,833 post-
split) shares with value of $10,400 to a related party as
compensation for services provided.
On June 29, 1999, the Registrant issued 2,400,000 (200,000 post-
split) shares to three existing shareholders for $48,000 in cash.
NOTE 5: MERGERS AND ACQUISITIONS
During May and June 1999, the Registrant acquired 13.5 million
shares of Growth Net Inc. (GNI) common stock for $455,583 in
cash. This transaction was accounted for as a purchase.
Accordingly, the accompanying consolidated financial statements
include the accounts of GNI, a wholly-owned non-operating
subsidiary of the Registrant. As memorialized in the Share
Exchange Agreement dated August 15, 1999, all of the current
assets of the Company of July 31, 1999, a total of 456,813, were
transferred to GNI for the benefit of the shareholders of the
Company as of June 30, 1999.
In September 1999, the Registrant entered into a merger agreement
with WSN (a development stage company), whereby such entities
would merge and operate as WSN. The merger agreement provides
for WSN to be merged with and into the Registrant, which is the
surviving corporation. The merger is tax free under Internal
Revenue Code 361. This merger also resulted in the following
stock splits: (a) of the total 93,450,000 issued and outstanding
shares of the Registrant prior to the merger, they were subject
to a reverse split of 12 to 1, resulting in issued and
outstanding shares of 7,787,500; and (b) of the total 4,556,162
issued and outstanding shares of WSN prior to the merger, they
were first subject to a reduction of 2,665,000 due to a Share
Exchange Agreement, resulting in a total of 1,891,162, which was
then subject to a forward split of 2.5 to 1, resulting in issued
and outstanding shares of 4,727,905. The total issued and
outstanding shares of common stock after the merger was
12,515,405. The issued and outstanding Class A Warrants totaling
16,000,000 were subject to a reverse split of 12 to 1, resulting
in a total of 1,333,333. Effective September 30, 1999, the
Registrant changed its name to World Shopping Network, Inc.
Management accounted for the merger as a capital stock
transaction (as opposed to a business combination, as that term
is defined by generally accepted accounting principles) because
the reorganization is a "reverse acquisition" involving a public
shell entity. Accordingly, the merger was reported as a
reorganization of WSN, which is considered the acquirer for
accounting purposes.
There are certain restrictions on the sale or other transfer of
the Registrant's common stock issued under the merger. Such
stock, generally referred to as "Rule 144 stock", was not
registered under the Securities Act of 1933, as amended (the
"Act"), in reliance upon an exemption from its requirements.
Each exchanging shareholder agreed to (1) acquire such stock for
his/her own account and (2) hold the stock for investment
purposes only. In addition, the stock certificates are required
to contain a legend (a) documenting these restrictions and (b)
requiring a legal opinion that any proposed sale is exempt from
registration under the Act.
NOTE 7: GOING CONCERN
The Registrant is a development stage company, as defined in the
SFAS No. 7. The Registrant is devoting substantially all of its
present efforts in securing and establishing a new business, and
has not generated any operating revenues. It is the Registrant's
belief that it will continue to incur losses for at least the
next 12 months, and as a result will require additional funds
from equity investments to meet such needs. The continued
existence of the Registrant is dependent upon its ability to meet
future financing requirements, and the success of future
operations. These factors raise substantial doubt about the
Registrant's ability to continue as a going concern.
NOTE 8: COMMITMENTS AND CONTINGENCIES
As of December 31, 1999, the Registrant was delinquent on several
filing requirements to the SEC. These filings include Form 10-KSB
for the year ended July 31, 1999, and a Form 8-K to announce the
consummation of the merger and the change of the fiscal year end
to June 30. Possible sanctions may include as enforcement action
and/or suspension of (1) trading in the Registrant's stock and/or
warrants and (2) the ability of securities dealers to make a
public market in the Registrant's securities.
NOTE 9: YEAR 2000 COMPLIANCE (UNAUDITED)
The management is utilizing both internal and external resources,
as appropriate, to ensure that all mission critical systems will
be Y2K compliant. Management has also taken reasonable steps to
assess the Y2K compliance of its significant third parties.
Management believes that all necessary actions have been taken to
address this issue, although there can be no assurance as to the
outcome of the conversion efforts.
ITEM 2. PLAN OF OPERATION.
The following discussion should be read in conjunction with the
financial statements of the Company and notes thereto contained
elsewhere in this report.
General Plan of Operation.
The Registrant can satisfy its cash requirements for
approximately six months with the cash available at December 31,
1999. The Registrant will need to raise additional capital in
the next 12 months from December 31, 1999 in order to meet its
continuing requirements. The Registrant does not intend to
expand its employees during the next twelve months.
The Registrant is an early development stage. The Registrant is
engaged in providing 24-hour, seven-day worldwide Internet-based
service on-line for the direct sale and delivery of a wide
variety of competitively priced consumer products and services.
The Registrant's objective is to become a dominant international
electronics retailer.
The Registrant's principal activities have focused on: (a) the
development and implementation of an Internet shopping model, the
"WSN Mall"; (b) the development of proprietary technology to
support such model; (c) an analysis of products and services to
be offered; (d) relationship development with providers of such
products and services; (e) the design, development and
implementation of proprietary merchandising and marketing
techniques to support the WSN Mall model; and (f) the
identification and building of a management team.
The Registrant's primary marketing objective is to make it
convenient for the e-commerce consumer to purchase a broad range
of products and services at prices that are highly competitive
with traditional mail order and electronic retail channels. To
accomplish this objective the the Registrant has developed a
nontraditional retail model, its the WSN Mall Internet Department
Store. The WSN Mall differs from most other shopping sites on
the Internet because it is a true retail "store." Most other
shopping sites on the Internet are "Malls." When a consumer
visits the Malls, they are in most cases actually reviewing a
list of manufacturers and resellers who have their own separate
web sites. The consumer must then link to one of these other
sites by actually leaving the Mall location.
Most of these manufacturers and resellers do not have the
capability of selling their products directly over the Internet,
so once at the new site, the consumer must call an 800 number to
place an order separately by phone. In other cases, the
manufacturer or reseller will present a list of local "dealers"
the consumer can visit. As a result, most Malls on the Internet
essentially become electronic advertising agencies.
Consequently, no unique advantage to the telephone-mail order
format is provided to the consumer.
The WSN Mall, on the other hand, is a true retailer. When a
consumer comes "into" the the WSN Mall store, he or she has the
capability of purchasing any product presented directly, without
having to go to another site or call an 800 number. By dealing
directly with the WSN Mall, the consumer is assured of the
overall satisfaction and convenience of purchasing from a "one
stop" shopping source. In addition, the WSN Mall offers a value-
added shopping experience by featuring the ability to process the
transaction conveniently, while presenting a broad range of
products at exceptional prices in a global format for any shopper
who can access the Internet.
The WSN Mall model is based on demand for convenient purchases of
a broad range of consumer products and services. Its revenues
are primarily generated by the sale of the products and services
offered through its web site. Consequently, the WSN Mall has a
vested interest in ensuring those products and services are
purchased. The Internet Malls have little or no such incentive
to sell products and services because their revenues are
generated by advertising others' web sites.
In dealing directly with the WSN Mall, manufacturers and other
product suppliers are assured of a low-cost distribution channel
to a large potential customer base by working with an
organization that is highly motivated to sell those suppliers'
products and services. Other advantages to this supplier include
increasing market share without increasing personnel,
administrative and advertising costs. Products are promoted
globally without increasing advertising expenditures. By
presenting products and services under the WSN Mall
advertising umbrella, promotion of product is assured in each
advertising vehicle the WSN Mall undertakes.
By increasing market share without additional associated costs
(normally 15% to 40% of total product costs) the suppliers can
offer their products and services at a reduced cost to the WSN
Mall. In turn, the WSN Mall intends to pass these cost savings
on to its customers. The Registrant also offers a frequent buyer
program that rewards customer loyalty by providing the
opportunity to accrue points for purchases. Such points are then
redeemed for additional discounts and sales incentives at later
dates.
Capital Expenditures.
No material capital expenditures were made during the quarter
ended on December 31, 1999.
Year 2000 Issue.
The Year 2000 issue arises because many computerized systems
use two digits rather than four to identify a year. Date
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using the year
2000 date is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 issue
may be experienced after January 1, 2000, and if not addressed,
the impact on operations and financial reporting may range from
minor errors to significant system failure which could affect the
Registrant's ability to conduct normal business operations. This
creates potential risk for all companies, even if their own
computer systems are Year 2000 compliant. It is not possible to
be certain that all aspects of the Year 2000 issue affecting the
Registrant, including those related to the efforts of customers,
suppliers, or other third parties, will be fully resolved.
The Registrant currently believes that its systems are Year 2000
compliant in all material respects. Although management is not
aware of any material operational issues or costs associated with
preparing its internal systems for the Year 2000, the Registrant
may experience serious unanticipated negative consequences (such
as significant downtime for one or more of its suppliers) or
material costs caused by undetected errors or defects in the
technology used in its internal systems. Furthermore, the
purchasing patterns of consumers may be affected by Year 2000
issues. The Registrant does not currently have any information
about the Year 2000 status of its potential material suppliers.
The Registrant's Year 2000 plans are based on management's best
estimates.
Forward Looking Statements.
The foregoing Management's Discussion and Analysis contains
"forward looking statements" within the meaning of Rule 175 of
the Securities Act of 1933, as amended, and Rule 3b-6 of the
Securities Act of 1934, as amended, including statements
regarding, among other items, the Registrant's business
strategies, continued growth in the Registrant's markets,
projections, and anticipated trends in the Registrant's business
and the industry in which it operates. The words "believe,"
"expect," "anticipate," "intends," "forecast," "project," and
similar expressions identify forward-looking statements. These
forward-looking statements are based largely on the Registrant's
expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Registrant's
control. The Registrant cautions that these statements are
further qualified by important factors that could cause actual
results to differ materially from those in the forward looking
statements, including, among others, the following: reduced or
lack of increase in demand for the Registrant's products,
competitive pricing pressures, changes in the market price of
ingredients used in the Registrant's products and the level of
expenses incurred in the Registrant's operations. In light of
these risks and uncertainties, there can be no assurance that the
forward-looking information contained herein will in fact
transpire or prove to be accurate. The Registrant disclaims any
intent or obligation to update "forward looking statements".
PART II.
ITEM 1. LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Registrant has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
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.
Reports on Form 8-K. Reports on Form 8-K were filed during the
three month period covered this Form 10-Q, as follows:
(1) Form 8-K filed on October 20, 1999 reflecting the dismissal
of the former certifying accountant for the Registrant,
Rothdtein, Kass & Company, effective September 10, 1999.
(2) Form 8-K filed on October 20, 1999 reflecting the retention
of Keyhan Company as the new certifying accountant for the
Registrant, effective September 15, 1999.
(b) Exhibits included or incorporated by reference herein:
See Exhibit Index.
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.
World Shopping Network, Inc.
Dated: February 25, 2000 By: /s/ John J. Anton
John J. Anton, President
EXHIBIT INDEX
Number Exhibit Description
2 Agreement and Plan of Merger (incorporated by reference to
the Definitive Information Statement filed on October 1, 1999).
3.1 Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 of the Form 10-K filed on November 5, 1996).
3.2 Certificate of Merger (which includes amendment to Articles of
Incorporation) (incorporated by reference to Form 10-QSB for the
period ended October 31, 1999 - filed on February 28, 1999).
3.3 Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10-K
filed on November 5, 1996).
4 Share Exchange Agreement (incorporated by reference to Form
10-QSB for the quarter ended October 31, 1999 - filed on February
28, 1999)
21 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21 to the Form 10-KSB/A filed on February 25, 2000).
27 Financial Data Schedule (see below).
<TABLE> <S> <C>
<S> <C>
<PAGE>
<ARTICLE>5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-KSB AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 467,076
<SECURITIES> 0
<RECEIVABLES> 7,438
<ALLOWANCES> 0
<INVENTORY> 7,984
<CURRENT-ASSETS> 482,498
<PP&E> 34,401
<DEPRECIATION> 0
<TOTAL-ASSETS> 518,373
<CURRENT-LIABILITIES> 56,416
<BONDS> 0
0
666,439
<COMMON> 544,238
<OTHER-SE> 461,956
<TOTAL-LIABILITY-AND-EQUITY> 518,373
<SALES> 8,885
<TOTAL-REVENUES> 8,885
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 69,131
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (60,246)
<INCOME-TAX> 0
<INCOME-CONTINUING> (60,246)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,246)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
