SECURITIES AND EXCHANGE COMMISSION
Washington, D C 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
Commission File Number 33-19584
POWERCOLD CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 23-258270
(State of Incorporation) (IRS Employer Identification No.)
103 GUADALUPE DRIVE
CIBOLO, TEXAS 78108 210-659-8450
(Address of principal executive offices) (Registrant's telephone number)
Securities registered pursuant to Sections 12(b) of the Act: NONE
Securities registered pursuant to Sections 12(g) of the Act: NONE
Common Stock, $0.001 Par Value OTC Bulletin Board
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X NO .
----- -----
As of September 30, 1999, 7,518,653 Common Shares were outstanding, and the
aggregate market value of such shares held by non-affiliates was approximately
$2,584,536.
Sequential Page 1 of 12
POWERCOLD CORPORATION
AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1: Financial Statements (Unaudited)
Consolidated Statement of Financial Position as of
September 30, 1999 and December 31, 1998. 3
Consolidated Statement of Operations for Three and Nine
Months Ended September 30, 1999 and September 30, 1998. 4
Consolidated Statement of Changes in Stockholders' Equity
for Three Months Ended September 30, 1999 and September 30, 1998. 5
Consolidated Statement of Cash Flows for Three and Nine
Months Ended September 30, 1999 and September 30, 1998. 6
Notes to Consolidated Financial Statements at June 30, 1999. 7
Item 2: Management's Discussion and Analysis of 8
Financial Condition and Results of Operations.
PART II. OTHER INFORMATION 11
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Sequential Page 2 of 12
<TABLE>
<CAPTION>
POWERCOLD CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<S> <C> <C>
September 30,
1999 December 31,
ASSETS (Unaudited) 1998
-------------- --------------
Current assets:
Cash and cash equivalents $ 15,835 $ 21,781
Restricted cash - 400,000
Trade accounts receivable, net of allowance for doubtful
accounts of $81,778 and $84,533, respectively 150,057 6,313
Related party receivables 269,668 72,618
Interest receivable - 9,918
Refundable income taxes 124,156 124,156
Inventories 154,430 156,699
Prepaid expenses and other current assets 84,246 62,511
-------------- --------------
Total current assets 798,392 853,996
Investment in securities available for sale - 32,500
Investment in affiliate 730,446 825,988
Property and equipment, net 43,674 42,483
Patent rights and related technology, net 390,772 441,078
Goodwill, net 113,124 125,925
-------------- --------------
Total assets $2,076,408 $2,321,970
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 240,000 $ 300,000
Short-term borrowings 34,847 424,203
Accounts payable 284,569 190,054
Accrued expenses 177,563 207,880
Commissions payable 42,240 42,240
Advances from affiliate 371,833 -
-------------- --------------
Total current liabilities 1,151,052 1,164,377
Commitments
Stockholders' equity:
Convertible, preferred stock, series A $0.001 par value,
$1,000,000 in liquidation, 1,250,000 shares authorized,
issued and outstanding at September 30, 1999 and
December 31, 1998 1,250 1,250
Common stock, $0.001 par value, 200,000,000 shares
authorized, 7,518,653 and 6,834,136 shares issued and
outstanding at September 30, 1999 and December 31, 1998,
respectively 7,519 6,834
Additional paid-in capital 5,959,119 5,534,274
Amounts due from stockholders (8,500) (8,500)
Accumulated deficit (5,034,032) (4,376,265)
-------------- --------------
Total stockholders' equity 925,356 1,157,593
-------------- --------------
Total liabilities and stockholders' equity $2,076,408 $2,321,970
-------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Sequential Page 3 of 12
<TABLE>
<CAPTION>
POWERCOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
For the three For the nine
month periods ended month periods ended
<S> <C> <C> <C> <C>
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
-------------- ------------- ------------- -------------
Revenue:
Product Sales $ 159,715 $ 104,078 $ 299,509 $ 284,519
Services 17,436 12,265 49,259 95,807
-------------- ------------- ------------- -------------
Total revenue $ 177,151 $ 116,343 348,768 380,326
Cost of revenue:
Product Sales 83,197 129,148 271,484 322,263
Services - 1,033 244 1,916
-------------- ------------- ------------- -------------
Total cost of revenue 83,197 130,181 271,728 324,179
Gross Margin 93,954 (13,838) 77,040 56,147
Operating expenses:
Sales and marketing 38,632 128,693 212,130 344,151
General and administrative 85,689 204,608 349,595 438,932
Research and development 37,616 - 68,025 -
-------------- ------------- ------------- -------------
Total operating expenses 161,937 333,301 629,750 783,083
-------------- ------------- ------------- -------------
Income (loss) from operations before equity in earnings
(loss) of unconsolidated affiliate (67,983) (347,139) (552,710) (726,936)
Equity in loss of unconsolidated affiliate (28,576) - (95,542) -
Gain on sale of 3% of interest in unconsolidated
affiliate - - - 37,121
-------------- ------------- ------------- -------------
Income (loss) before other income (expense) (96,559) (347,139) (648,252) (689,815)
Other income (expense)
Interest and other income (1,424) 34,500 32,826 83,589
Interest and other expense (16,929) (4,775) (42,341) (17,572)
Other - - - (6,333)
-------------- ------------- ------------- -------------
Total other income (expense) (18,353) 29,725 (9,515) 59,684
-------------- ------------- ------------- -------------
Income (loss) before provision for income taxes (114,912) (317,414) (657,767) (630,131)
Provision (benefit) for income taxes
Federal current provision - - - -
Federal deferred provision - - - -
-------------- ------------- ------------- -------------
- - - -
-------------- ------------- ------------- -------------
Net income (loss) $ (114,912) $ (317,414) $ (657,767) $ (630,131)
-------------- ------------- ------------- -------------
Net loss per share (0.01) (0.05) $ (0.09) $ (0.10)
-------------- ------------- ------------- -------------
Weighted average number of shares 7,438,943 6,515,471 7,174,407 6,277,489
-------------- ------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Sequential Page 4 of 12
<TABLE>
<CAPTION>
POWERCOLD CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
AND SUBSIDIARIES FOR THE THREE MONTH PERIODS ENDED
(UNAUDITED) SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
Additional Amounts Earnings
Preferred Stock Common Stock Paid-In Due From (Accumulated
Stock Amount Stock Amount Capital Stockholders Deficit) Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------- --------- ----------- --------- -------------- ------------ --------------- ------------
Balances at July 1, 1998 - $ - 6,345,796 $6,346 $4,308,668 $(7,500) $(2,998,795) $1,308,719
Sale of Preferred Stock
(net of expenses of
$20,504) 1,250,000 1,250 - - 978,246 - - $ 979,496
Issuance of Common Stock
for Accounts Payable - - 117,340 117 74,431 - - 74,548
Issuance of Common Stock as
a deposit on an
acquisition - - 100,000 100 62,900 - - 63,000
Issuance of Common Stock
for Compensation - - 14,500 14 9,121 - - 9,135
Net Income (loss) for the
three month period
ended September 30, 1998 - - - - - - (317,414) (317,414)
---------- --------- ----------- --------- -------------- ------------ --------------- ------------
Balances at September 30,
1998 1,250,000 $1,250 6,577,636 $6,577 $5,433,366 $(7,500) $(3,316,209) $2,117,484
---------- --------- ----------- --------- -------------- ------------ --------------- ------------
Balances at July 1, 1999 1,250,000 $1,250 7,351,986 $7,352 $5,859,286 $(8,500) $(4,919,120) $ 940,268
Sale of Common Stock - - 166,667 167 99,833 - - 100,000
Net Income (loss) for the
three month period
ended September 30, 1999 - - - - - - (114,912) (114,912)
---------- --------- ----------- --------- -------------- ------------ --------------- ------------
Balances at September 30,
1999 1,250,000 $1,250 7,518,653 $7,519 $5,959,119 $(8,500) $(5,034,032) $ 925,356
---------- --------- ----------- --------- -------------- ------------ --------------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Sequential Page 5 of 12
<TABLE>
<CAPTION>
POWERCOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the three month For the nine month
periods ended periods ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
<C> <C> <C> <C>
Cash flows from operating activities: ----------- ----------- ------------ -----------
Net Income (Loss) $ (114,912) $ (317,414) $ (657,767) $ (630,131)
Adjustments to reconcile net income (loss) to net cash
provided by (used by) operating activities:
Depreciation and amortization 26,008 24,821 77,554 73,668
Net realized loss on available for sale securities - - - 5,100
Equity in earnings of unconsolidated affiliate 28,576 - 95,542 -
Common stock issued for services 13,300 83,683 112,130 192,903
Changes in assets and liabilities:
Trade accounts receivable (89,673) 35,471 (140,989) 25,702
Provision for doubtful accounts - 76,815 (2,755) 76,815
Interest receivable 9,918 - 9,918 48,164
Employee receivable - (1,434) - (6,017)
Other receivable - (8,050) - (8,050)
Loan to Rotary Power Enterprises - (26,000) - (26,000)
Related party receivable (51,265) - (197,050) -
Inventories (6,614) 6,340 2,269 34,499
Prepaid expenses and other current assets (8,435) (3,210) (8,435) 916
Accounts payable 5,201 20,237 94,515 23,572
Accrued expenses 2,228 (6,364) (30,317) 40,600
----------- ----------- ------------ -----------
Net cash provided by (used by) operating activities (185,668) (115,105) (645,385) (148,259)
Cash Flows from investing activities:
Purchase of property and equipment - - (15,638) -
Disposition of property and equipment - - - 1,234
Advances to affiliate company - (252,888) - (324,782)
Advances from affiliate company 42,609 - 371,833 -
Redemption of certificate of deposit 400,000 - 400,000 -
Release of escrow from sale of subsidiary - 200,000 200,000
Proceeds from sale of securities available for sale - - 32,500 16,858
Purchases of securities available for sale - - - (27,522)
Net cash provided by (used by) investing activities 442,609 (52,888) 788,695 (134,212)
Cash flows from financing activities:
Proceeds from issuance of preferred stock - 979,496 - 979,496
Proceeds from issuance of common stock 100,000 - 300,100 100,000
Proceeds from short-term borrowings - - 49,404 28,643
Payment of short-term borrowings (436,697) (3,212) (438,760) (15,609)
Proceeds from notes payable 40,000 - 40,000 -
Payments on notes payable - - (100,000) -
----------- ----------- ------------ -----------
Net cash provided by (used by) financing activities (296,697) 976,284 (149,256) 1,092,530
----------- ----------- ------------ -----------
Net increase (decrease) in cash and cash equivalents (39,756) 808,291 (5,946) 810,059
Cash and cash equivalents at beginning of period 55,591 4,042 21,781 2,274
----------- ----------- ------------ -----------
Cash and cash equivalents at end of period $ 15,835 $ 812,333 $ 15,835 $ 812,333
----------- ----------- ------------ -----------
Interest paid $ 20,560 $ 4,775 $ 42,341 $ 17,572
Noncash operating activities:
Common stock issued for deferred compensation $ (13,300) $ - $ 13,300 $ -
Noncash investing activities:
Unrealized gain (loss) on securities available for sale $ - $ - $ - $ 134
Noncash financing activities:
Deposit on acquisition paid with common stock $ - $ 63,000 $ - $ 63,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
Sequential Page 6 of 12
POWERCOLD CORPORATION Notes to Consolidated AND
SUBSIDIARIES Financial Statements at
(Unaudited) September 30, 1999
The condensed consolidated financial statements of PowerCold Corporation and
Subsidiaries included herein have been prepared without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Although,
certain information normally included in financial statements prepared in
accordance with generally accepted accounting principles has been condensed or
omitted, PowerCold Corporation believes that the disclosures are adequate to
make the information presented not misleading. The condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes thereto included in PowerCold Corporation's annual report
on Form 10-K for the fiscal year ended December 31, 1998.
The condensed consolidated financial statements included herein reflect all
normal recurring adjustments that, in the opinion of the management, are
necessary for a fair presentation. The results for the interim periods are not
necessarily indicative of trends or of results to be expected for a full year.
Sequential Page 7 of 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Forward looking statements made herein are based on current expectations of the
Company that involves a number of risks and uncertainties and should not be
considered as guarantees of future performance. These statements are made under
the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. The factors that could cause actual results to differ materially include;
interruptions or cancellation of existing contracts, impact of competitive
products and pricing, product demand and market acceptance risks, the presence
of competitors with greater financial resources than the Company, product
development and commercialization risks and an inability to arrange additional
debt or equity financing.
GENERAL FINANCIAL ACTIVITY
PowerCold is a solution provider of energy efficient products for users of
industrial and commercial refrigeration systems worldwide. The Company operates
across many market sectors from large industrial food processors to small
commercial air conditioning systems. The firm's focus is to give customers
products and systems that allow them to benefit from current changes occurring
in the natural gas and electrical utility marketplace. Refrigeration is the
most energy intensive operation most business operators face. PowerCold has the
opportunity to provide products and systems, that customers require taking
advantage of these changes, to improve profitability by reducing their
operating costs.
Deregulation of the gas and electric utilities will provide continuing
opportunities, creating new markets for more efficient refrigeration systems.
PowerCold has the products, experience and creative ability to package unique
refrigeration systems for the multi-billion dollar refrigeration market. The
Company is acquiring synergistic businesses, and marketing alliances are being
formed with major utility companies and established refrigeration companies for
these products and services.
The Company's business operations are supported by a management team with over
(150) year's experience. The Company maintains administrative corporate offices
in Cibolo, Texas, and Philadelphia, Pennsylvania. Engineering and manufacturing
facilities are located in Cibolo, Texas.
The Company's mission is to be a solution provider of energy efficient products
for the multi-billion dollar refrigeration, air condition and power industry.
The Company's goal is to achieve profitable growth and increase shareholder
value - providing superior products and services through related acquisitions
and joint ventures.
PowerCold Companies:
RealCold Products, Inc. - designs and manufactures unique energy efficient
packaged products for the refrigeration industry. RealCold Products also
supports Rotary Power Enterprise and Alturdyne Energy Systems by engineering
and packaging their products. RealCold Products will also support Channel
Freeze Technologies by designing and packaging their accompanying refrigeration
systems. Management believes that the recent acquisition of Channel Freeze and
Alturdyne Energy Systems should provide improved revenues and profits for
RealCold Products in 1999, based upon its expertise in custom manufacturing
systems. There are proposed alliances with other refrigeration companies,
whereas RealCold Products will package various components adding value for a
total turnkey refrigeration system.
Nauticon Inc. - manufactures and markets a product line of patented evaporative
heat exchange systems for the HVAC and refrigeration industry. The new
patented products are innovative and unique in design, use new material
technology, and are simple to manufacture, and have a low operating cost. They
are used for condensers, fluid coolers, subcoolers, and cooling towers.
Nauticon products can save power cost in the refrigeration industry by 20% to
30%, making these units contribute to the utilities needs to reduce power
demand. There are over 100 systems installed in the US.
Technicold Services, Inc. - offers consulting engineering services, including
process safety management compliance and ammonia refrigeration and carbon
Sequential Page 8 of 12
dioxide system design. TSI also provides operation, maintenance and safety
seminars for ammonia refrigeration technicians and supervisors. TSI also
publishes a quarterly newsletter, COLD TALK, which reaches over (2000)
refrigeration supervisors and technicians.
Rotary Power Enterprise, Inc. - was formed (September 1998) as a new PowerCold
entity to acquire the Natural Gas Business from Rotary Power International. The
agreement includes: the business assets including intellectual property,
inventory and manufacturing capability; a marketing agreement with the Hussmann
Corporation, the world's largest supplier of supermarket refrigeration equipment
for marketing the natural gas engine screw compressor systems to supermarkets;
the North American rights to the small 65 series Mazda natural gas engine block,
subject to Mazda Agreement; and Distributor Agreements for the Rotary Power 580
and 40 series engines form Rotary Power International, Inc.
Channel Freeze Technologies, Inc. - was formed (September 1998) as a PowerCold
subsidiary to acquire 80% of the assets of Channel Ice Technologies. Channel
Ice produces a proprietary patented and economical multi-purpose freezing
system, suitable for virtually any liquid or semi-liquid product, that is
inherently more efficient than prior technologies in a variety of industries
including; block ice - for ice plants, fish and produce industries; food and
food byproducts - for food suppliers and their leftover byproducts, fruit and
juice products. The most notable new application is for highly efficient
management of liquid and semi-liquid industrial waste products for municipal
water, pulp and paper plants and utilities. The freeze-thaw process; waste is
frozen the water in the frozen sludge drains almost immediately during thaw,
and the remaining materials are than disposed of at greatly reduced cost,
recycled or sold.
Alturdyne Energy Systems - PowerCold signed a Letter of Agreement (December
1998), to acquire a division of Alturdyne that produces natural gas engine
driven water chillers. The Company also announced a Strategic Alliance with
Alturdyne for manufacturing and marketing of their respective products.
Alturdyne is an innovative manufacturer of standby diesel generator sets,
turbine and rotary generator sets, pumps and natural gas engine-driven
chillers. Alturdyne's strength lies in its power engineering personnel, who
are knowledgeable in the generator set business, telephone company
applications, small turbines, rotaries and chillers.
Alturdyne Energy Systems, as an Alturdyne division installed over (140)
chillers systems. The manufacturing operations have been moved to the
Company's facility in Cibolo, Texas. The added expertise of RealCold Products
engineering and manufacturing should enhance the existing chiller business.
The Company is currently live on the INTERNET, a worldwide information network.
The real time system will provide anyone, shareholder, investor or customer,
with Company news releases, financial data and product information.
PowerCold Web Page http://www.powercold.com.
RESULTS OF OPERATIONS - Third Quarter 1999
Revenue for the three months period ended September 30, 1999 increased 34% to
$177,151 from $116,343 for the same period ended September 30, 1998.
Revenue for the six months period ended September 30, 1999 decreased (8%) to
$348,768 from $380,326 for the same period ended September 30, 1998.
Order BackLog - Company order backlog is approximately $800,000. The Company
has over $30M in back log customer order quotations for AES chiller systems,
Channel Freeze systems, Nauticon systems and engine products. Rotary Power
Enterprise has delivery four 65 series natural gas engines for use at gas well
field sites and has delivered the first commercial 500 hp 580 series natural
gas engine for testing at a customer location. Management believes that
revenues will continue to improve because of the new marketing and sales
programs implemented this year and because of the numerous proposals that are
continually being quoted to prospective customers for all product lines.
Net Loss for the three months period ended September 30, 1999 decreased (64%)
to ($114,912) from ($317,414) for the same period ended September 30, 1998.
Net Loss for the six months period ended September 30, 1999 increased (4%) to
($657,767) from ($630,131) for the same period ended September 30, 1998.
Sequential Page 9 of 12
Net Loss per share for the three months period ended September 30, 1999
decreased to
($0.01) from ($0.05) for the same period ended September 30, 1998.
Net Loss per share for the six months period ended September 30, 1999 decreased
to
($0.09) from ($0.10) for the same period ended September 30, 1998.
Net loss per share was based on weighted average number of shares of 7,438,943
for September 30, 1999 compared to 6,515,471 for the same three-month period in
1998.
The operating loss has continually decreased primarily because of tighter
management control of general operating expenses and should continue to
decrease as orders and revenue increases.
The Company's Consolidated Balance Sheets as of the third quarter ended
September 30, 1999 compared to the third quarter ended September 30, 1998
respectively: Total assets decreased (31%) to $2,076,408 compared to
$3,011,881; total current liabilities increased (22%) to $1,151,052 compared to
$894,397; total stockholders' equity decreased (56%) to $925,356 compared to
$2,117,484; and the Company has no long term debt.
Management intends to continue to utilize and develop the intangible assets of
the Company. It is Management's opinion that the Company's cash flow generated
from current intangible assets is not impaired, and that recovery of its
intangible assets, upon which profitable operations will be based, will occur.
Management believes that current operating working capital is not sufficient to
support its daily operations. Therefore, management is seeking additional
financing to support the Company's sales growth and manufacturing operations.
Financial Summary: (Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
---------- ---------- ----------- -----------
Revenue $177,151 $116,343 $348,768 $380,326
Net Loss ($114,912) ($317,414) ($657,767) ($630,131)
Net Loss Per Share ($0.01) ($0.05) ($0.09) ($0.10)
Shares Outstanding (Avg.) 7,438,943 6,515,471 7,174,407 6,277,489
Sept. 30, Sept. 30,
1999 1998
------------ ------------
Total Assets $2,076,408 $3,011,881
Total Liabilities - Current $1,151,052 $894,397
Total Liabilities - Long Term $0.00 $0.00
Total Stockholders Equity $925,356 $2,117,484
Sequential Page 10 of 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Management of the Company is seeking to recoup damages from the former
president and director of Nauticon in connection with Nauticon's acquisition by
the Company. Related to this matter is the ownership of certain patents, which
the company legally owns as part of the acquisition. It is the opinion of
management that this matter has no adverse effect on the Company at this time,
because the Company legally acquired all the assets of Nauticon including the
patents in exchange for stock. The former president of Nauticon has filed a
counter claim against the Company and two Company Executives/Directors.
Because of the financial and managerial problems incurred by the previous
Nauticon management, Nauticon has incurred bad debts and certain claims have
been filed against Nauticon.
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.
Sequential Page 11 of 12
POWERCOLD CORPORATION
FORM 10-Q
September 30, 1999
Signature
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 12, 1999
POWERCOLD CORPORATION
/s/Francis L. Simola
-----------------------
Francis L. Simola
President and CEO
Sequential Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 15835
<SECURITIES> 0
<RECEIVABLES> 419725
<ALLOWANCES> 0
<INVENTORY> 154430
<CURRENT-ASSETS> 798392
<PP&E> 43674
<DEPRECIATION> 0
<TOTAL-ASSETS> 2076408
<CURRENT-LIABILITIES> 1151052
<BONDS> 0
1250
0
<COMMON> 7519
<OTHER-SE> 925356
<TOTAL-LIABILITY-AND-EQUITY> 2076408
<SALES> 159715
<TOTAL-REVENUES> 177151
<CGS> 83197
<TOTAL-COSTS> 161937
<OTHER-EXPENSES> 18353
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (114912)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114912)
<EPS-BASIC> (0.01)
<EPS-DILUTED> 0
</TABLE>
