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, 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 1-10196
Dimensional Visions Incorporated
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 23-2517953
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2301 W. Dunlap, Suite 207, Phoenix, Arizona, 85021
--------------------------------------------------
(Address of principal executive offices)
(602) 997 - 1990
-------------------------
(Issuer's telephone number)
----------------------------------------------------
(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 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 [ ]
As of December 31, 1998, the number of shares of Common Stock issued and
outstanding was 3,641,978.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - December 31, 1998
and June 30, 1998 1
Condensed Consolidated Statement of Operations - For the three
and six months ended December 31, 1998 and 1997 2
Condensed Consolidated Statement of Cash Flows - For the six
months ended December 31, 1998 and 1997 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DIMENSIONAL VISIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,
1998 June 30,
ASSETS (Unaudited) 1998
----------- ----
Current assets
Cash $ 35,930 $ 15,910
Current portion of notes receivable 171,281 119,461
Accounts receivable, trade, net of
allowance for bad debts of $215,743 158,728 144,620
Inventory 82,995 69,364
Prepaid expenses 56,980 25,678
------------ ------------
Total current assets 505,914 375,033
------------ ------------
Equipment
Equipment 402,920 370,344
Furniture and fixtures 50,440 24,217
------------ ------------
453,360 394,561
Less accumulated depreciation 262,341 233,509
------------ ------------
191,019 161,052
------------ ------------
Other assets
Notes receivable net of current portion 272,388 342,377
Deferred costs 30,726 --
Patent rights and other assets 37,793 42,379
------------ ------------
340,907 384,756
------------ ------------
Total assets $ 1,037,840 $ 920,841
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Short-term borrowings $ 84,367 $ 79,500
Current portion of long-term debt -- 75,000
Current portion of obligations under
capital leases 22,788 16,476
Accounts payable, accrued expenses and
other liabilities 560,159 439,977
------------ ------------
Total current liabilities 667,314 610,953
Long-term debt, net of current portion 485,000 --
Obligations under capital leases 92,805 102,586
------------ ------------
Total liabilities 1,245,119 713,539
------------ ------------
Commitments and contingencies -- --
Stockholders equity (deficiency)
Preferred stock - $.001 par value, authorized
10,000,000 shares; issued and outstanding -
132,911 shares at December 31, 1998, and
133,321 shares at June 30, 1998 133 133
Additional paid-in capital 679,177 683,278
------------ ------------
679,310 683,411
Common stock - $.001 par value, authorized
100,000,000 shares; issued and outstanding
3,641,978 shares at December 31, 1998 and
3,612,101 shares at June 30, 1998 3,642 3,612
Additional paid-in capital 18,879,145 18,862,075
Deficit (19,769,376) (19,341,796)
------------ ------------
Total stockholders' equity (deficiency) (207,279) 207,302
------------ ------------
Total liabilities and stockholders'
equity (deficiency) $ 1,037,840 $ 920,841
============ ============
See notes to condensed consolidated financial statements.
(1)
<PAGE>
DIMENSIONAL VISIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December31, December31
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenue $ 219,311 $ 58,697 $ 410,400 $ 172,251
Cost of sales 152,279 58,731 245,561 164,876
---------- ---------- ---------- ----------
Gross profit 67,032 (34) 164,839 7,408
---------- ---------- ---------- ----------
Operating expenses
Engineering and development costs 47,808 53,555 97,085 113,380
Marketing expenses 115,376 56,787 168,324 114,079
General and administrative expenses 180,846 143,128 318,888 301,889
---------- ---------- ---------- ----------
Total operating expenses 344,030 253,470 584,297 529,348
---------- ---------- ---------- ----------
Loss before other income (expenses) (238,273) (253,504) (419,458) (521,940)
---------- ---------- ---------- ----------
Other income (expenses)
Interest expense (17,074) (26,225) (29,420) (29,590)
Interest income 10,527 7,008 21,298 7,212
Forgiveness of accrued compensation -- 106,149 -- 106,149
Loss on sale of equipment -- (18,881) -- (18,881)
Gain on sale of product line -- -- -- 410,000
---------- ---------- ---------- ----------
(6,547) 68,051 (8,122) 474,890
---------- ---------- ---------- ----------
Net income (loss) $ (244,820) $ (185,453) $ (427,580) $ (47,050)
========== ========== ========== ==========
Net income (loss) per share of
common stock $ (.07) $ (.06) $ (.12) $ (.02)
========== ========== ========== ==========
Weighted average shares of common
stock outstanding 3,622,049 2,931,548 3,617,089 2,883,038
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
(2)
<PAGE>
DIMENSIONAL VISIONS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended December 31,
1998 1997
---- ----
Cash flows from operating activities
Net income (loss) $(427,580) $ (47,050)
Total adjustments to reconcile net income
(loss) to net cash used in operating activities 131,974 (389,744)
--------- ---------
Net cash used in operating activities (295,606) (436,794)
--------- ---------
Cash flows from investing activities
Proceeds from payments on notes receivable 17,428
Proceeds from sale of equipment -- 10,000
Purchase of furniture and equipment (58,800) (10,200)
--------- ---------
Net cash used in investing activities (41,372) (200)
--------- ---------
Cash flows from financing activities
Payment of obligations under capital lease (3,469)
Payment of debt obligations (75,000) (25,000)
Proceeds from issuance of debt net of deferred
financing costs of $34,400 450,600 --
Repayment of short-term borrowing (15,133) --
Proceeds from secured promissory notes, net of
financing costs of $14,175 -- 229,325
Exercise of warrants to purchase common stock 10,000
Sale of common stock, net of offering costs -- 135,000
--------- ---------
Net cash provided by financing activities 356,998 349,325
--------- ---------
Net increase (decrease) in cash 20,020 (87,669)
Cash, beginning 15,910 109,566
--------- ---------
Cash, ending $ 35,930 $ 21,897
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 22,974 --
=========
Issuance of common stock in connection with
Consulting services $ 13,000 $ 21,250
========= =========
Compensation -- $ 2,750
=========
Supplemental disclosure of non-cash investing and financing activities:
During the six months ended December 31, 1998, 163 shares of the Company's
Common Stock were issued as a result of the conversion of 410 shares of Series C
Convertible Preferred Stock valued at $4,100.
See notes to condensed consolidated financial statements.
(3)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The June 30, 1998, balance sheet data were
derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. The
interim financial statements and notes thereto should be read in
conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1998. In the opinion of management, the interim financial statements
reflect all adjustments of a normal recurring nature necessary for a fair
statement of the results for the interim periods presented. The current
period results of operations are not necessarily indicative of results
which ultimately will be reported for the full year ending June 30, 1999.
NOTE 2 ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES
December 31, 1998 June 30,1998
----------------- ------------
Accounts payable $481,009 $370,633
Accrued expenses
Interest 24,480 20,886
Salaries 47,342 43,587
Payroll Taxes Payable 7,328 4,871
-------- --------
Total $560,159 $439,977
======== ========
NOTE 3 LONG-TERM DEBT
Long-term debt consisted of the following:
December 31, 1998 June 30, 1998
----------------- -------------
12% secured debentures due July 31, 2001 $485,000(1) $ --
10% secured notes due in January
and February 1998 -- 75,000
-------- -------
485,000 75,000
Less current portion -- 75,000
-------- -------
Long term portion $485,000 $ --
-------- -------
(1) Interest is calculated at 12% per annum and is payable yearly on
July 31, beginning July 31, 1999. The Company borrowed $475,000 net
of financing costs of $34,400. The Series A 12% Convertible Secured
Debentures include warrants to purchase 485,000 shares of the
Company's common stock at $0.50 per share. The warrants are
exercisable through January 15, 2001. The notes are secured by all
the assets of the Company, except for the Company's accounts
receivable and assets acquired pursuant to purchase-money financing
transactions. The notes are convertible into one share for each
$1.00 of outstanding debt and unpaid interest is also convertible to
common stock at the rate of one share for each $1.00 of unpaid
interest.
(4)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
NOTE 4 COMMITMENTS AND CONTINGENCIES
On January 1, 1998, the Company relocated its offices and entered into a
three year lease at a minimum rental of $44,950 per year.
Effective January 24, 1997, the Company vacated its studio and production
facilities in Philadelphia, Pennsylvania. There are several disputed
invoices outstanding that amount to less than $2,000 that management
expects to resolve in its favor.
On March 12, 1997, Douglas J. Wright filed a lawsuit in the United States
District Court, Eastern District of Pennsylvania, against the Company. Mr.
Wright is a former officer and employee of the Company. In the complaint,
Mr. Wright alleges that he was damaged by the Company's refusal to
register warrants to purchase stock in the Company. Mr. Wright alleges
damages in the amount of $1,549,375, representing the alleged difference
between the market price of the Company's stock and Mr. Wright's costs of
exercising the warrants. Mr. Wright alternatively seeks an injunction
against the Company "from withdrawing or completing its registration
statement without including the stock of the plaintiff." The Company moved
to dismiss the compliant for improper venue, or in the alternative, to
transfer to United States District Court, District of Arizona. The court
granted the Company's motion to transfer. On July 17, 1997, the Company
filed its answer, affirmative defenses and counterclaim. Mr. Wright did
not answer the counterclaim in a timely fashion and the court entered a
default judgement against Mr. Wright on the counterclaim on September 9,
1997. The Company is seeking summary judgement against Mr. Wright on this
claim.
In July 1996, the Company filed a complaint in the United States District
Court for the Eastern District of Pennsylvania (No. 96-CV-5259) against
Dimensional Graphic Sales, Inc. ("DGS"). In the complaint the Company
alleges that it delivered an order to DGS and properly invoiced DGS
pursuant to a sales and marketing agreement. DGS attempted to pay the
invoice in full by tendering a check for an amount less than the full
amount of the invoice and placing a restrictive endorsement on the check
which purported to constitute payment in full for the invoice. The Company
crossed out the restrictive endorsement and attempted to deposit the check
only to subsequently learn that DGS had stopped payment on the check. In
its complaint the Company is seeking $213,522 the full amount of the
invoice together with interest costs and such other relief as the court
deems just and proper. DGS filed a counterclaim against the Company for an
unspecified amount in excess of $100,000. The matter has moved to a
deferred status while the parties engage in settlement negotiation.
There are no other legal proceedings which the Company believes will have
a material adverse effect on its financial position.
The Company has not declared dividends on Series A or B Convertible
Preferred Stock. The cumulative dividends in arrears through December 31,
1998 was approximately $78,300.
NOTE 5 COMMON STOCK
As of December 31, 1998, there are outstanding 3,950,819 of non-public
warrants to purchase the Company's common stock at prices ranging from
$0.50 to $12.50 with a weighted average price of $0.86 per share.
(5)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
As of December 31, 1998, there were 132,911 shares of various classes of
Convertible Preferred Stock outstanding which can be converted to 98,764
shares of common stock.
As of December 31, 1998, there were $485,000 of secured debentures which
can be converted into 485,000 shares of the Company's common stock.
The total number of shares of the Company's common stock that would have
been issuable upon conversion of the outstanding debt, warrants and
preferred stock equaled 4,534,583 shares as of December 31, 1998, and
would be in addition to the 3,641,978 shares of common stock outstanding
as of December 31, 1998.
The Company issued on September 10, 1998, 127 shares of its common stock
as a result of a conversion of 318 shares of Series C convertible
Preferred Stock.
The Company issued on December 29, 1998, 36 shares of its common stock as
a result of a conversion of 92 shares of Series C convertible Preferred
Stock.
In November and December 1998 the Company issued 29,714 shares of its
common stock to two consultants to the Company.
NOTE 6 PREFERRED STOCK
The Company has authorized 10,000,000 shares of $.001 par value per share
Preferred Stock, of which the following were issued and outstanding:
Outstanding
----------------------------------
Allocated December 31, 1998 June 30, 1998
--------- ----------------- -------------
Series A Preferred 100,000 23,000 23,000
Series B Preferred 200,000 5,000 5,000
Series C Preferred 1,000,000 18,271 18,681
Series P Preferred 600,000 86,640 86,640
--------- ------- -------
Total Preferred Stock 1,950,000 132,911 133,321
========= ======= =======
The Company's Series A Convertible 5% Preferred Stock ("Series A
Preferred"), 100,000 shares authorized, is convertible into common stock
at the rate of 1.6 shares of common stock for each share of the Series A
Preferred. Dividends from date of issue are payable from retained
earnings, and have been accumulated on June 30 each year, but have not
been declared or paid.
The Company's Series B Convertible 8% Preferred Stock ("Series B
Preferred"), is convertible at the rate of 4 shares of common stock for
each share of Series B Preferred. Dividends from date of issue are payable
on June 30 from retained earnings at the rate of 8% per annum and have not
been declared or paid.
The Company's Series C Convertible Preferred Stock ("Series C Preferred"),
is convertible at a rate of 0.4 shares of common stock per share of Series
C Preferred.
(6)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
The Company's Series P Convertible Preferred Stock ("Series P Preferred"),
is convertible at a rate of 0.4 shares of common stock for each share of
Series P Preferred.
The Company's Series A Preferred and Series B Preferred were issued for
the purpose of raising operating funds. The Series C Preferred was issued
to certain holders of the Company's 10% Secured Notes in lieu of accrued
interest and also will be held for future investment purposes.
The Series P Preferred was issued on September 12, 1995, to InfoPak
shareholders in exchange for (1) all of the outstanding capital stock of
InfoPak, (2) as signing bonuses for certain employees and a consultant of
InfoPak, and (3) to satisfy InfoPak's outstanding debt obligations to
certain shareholders.
The 190,700 shares of Series B Preferred were issued to holders of
warrants to purchase such preferred stock. The funding for the exercise of
these warrants was the exchange of $1,907,000 of principal amount of
secured and unsecured notes. On December 3, 1996, 185,700 shares of Series
B Preferred were exchanged for 891,360 shares of the Company's common
stock.
The 26,275 shares of Series C Preferred were also issued in exchange for
$262,750 of interest due under the secured and unsecured notes. Holders of
8,004 shares of Series C Preferred Stock have subsequently converted their
shares into the Company's common stock.
NOTE 7 INCOME TAXES
There was no provision for current income taxes for the six months ended
December 31, 1998 and 1997. The federal net operating loss carry forwards
of approximately $16,539,000 expire in varying amounts through 2018.
The Company has had numerous transactions in its common stock. Such
transactions may have resulted in a change in the Company's ownership, as
defined in the Internal Revenue Code Section 382. Such change may result
in an annual limitation on the amount of the Company's taxable income
which may be offset with its net operating loss carry forwards. The
Company has not evaluated the impact of Section 382, if any, on its
ability to utilize its net operating loss carry forwards in future years.
NOTE 8 EVENTS SUBSEQUENT TO DECEMBER 31, 1998
On January 25, 1999, the Company received $50,000, less $5,000 in
commission, in exchange for a 12% Convertible Secured Debenture. The
Debenture is due and payable in full on July 25, 1999, but can be extended
until October 25, 1999, at an interest rate of 15%. The Debenture is
convertible into shares of the Company's common stock at the rate of one
share of common stock for every dollar converted.
(7)
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1998, the Company had a working capital deficiency of
$161,400, compared with a working capital deficiency of $235,920 as of December
31, 1997. On October 6, 1998, the Company received additional long-term
financing of $10,000 in the form of its Series A 12% Convertible Secured
Debentures.
The Company requires additional working capital and anticipates raising this
capital through either a private placement of preferred stock or through the
issuance of debentures. There can be no assurances that the Company can obtain
funds from either of these sources. The Company has been financing its accounts
receivable to meet its immediate cash needs.
RESULTS OF OPERATIONS
The net loss for the quarter ended December 31, 1998, was $244,820 compared to a
net loss of $185,453 for the quarter ended December 31, 1997. The quarter ended
December 31, 1997, would have resulted in a net loss of $291,602 without the
forgiveness of accrued compensation by certain officers of the Company totaling
$106,149. The loss before other income and expenses for the quarter ended
December 31, 1998, was $238,273 compared to a loss before other income and
expenses for the quarter ended December 31, 1997, of $253,504.
Revenue for the quarter ended December 31, 1998, was $219,311 compared to
revenue of $58,697 for the quarter ended December 31, 1997. The increase in
revenue was the result of substantial increases in the sales of the Company's
print products. For the quarter ended December 31, 1998, the Company recorded
sales totaling approximately $176,000 of its DV3D(R) AnimotionTM print products
compared to sales of approximately $28,000 for the quarter ended December 31,
1997.
In December 1998 the Company signed a Letter of Intent with 3D Image Technology,
Inc., Norcross, Georgia, to complete a consolidation of the two companies under
a single holding company. The two companies had entered into a beneficial
strategic marketing alliance which led the management of both companies to the
conclusion that a consolidation was in the best interest of both companies and
would strengthen both enterprises and enhance shareholder value. The plan of
consolidation, which has been approved by the Boards of Directors of both
companies, must be submitted for appropriate shareholder approval.
(8)
<PAGE>
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
LIQUIDITY AND CAPITAL RESOURCES
In July 1998 the Company paid off $75,000 of debt that was secured by all of the
assets of the corporation. During the six months ended December 31, 1998, the
Company raised $485,000 through the placement of its Series A 12% Convertible
Secured Debentures (see Note 3). Additionally, approximately $84,000 of accounts
receivable have been factored to meet short term cash needs.
The Company is focusing most of its resources and efforts towards marketing its
print products. Therefore, it has offered its subsidiary, InfoPak, Inc., for
sale. The Company needs additional funding in order to maintain current
operations. The Company is not to the point of generating sufficient revenues
from operations to cover its cost structure and has been funding its operations
by selling its securities in private placements, short-term borrowing, and sale
of its products.
RESULTS OF OPERATIONS
The net loss for the six months ended December 31, 1998, was $427,580 compared
to a net loss of $47,050 for the six months ended December 31, 1997. The six
months ended December 31, 1997, would have resulted in a net loss of $557,199
without the forgiveness of accrued compensation by certain officers of the
Company totaling $106,149 and without the sale of the InfoPak Real Estate
Product Line totaling $410,000. The loss before other income and expenses for
the six months ended December 31, 1998, was $419,458 compared to a loss before
other income and expenses for the six months ended December 31, 1997, of
$521,941.
Revenue for the six months ended December 31, 1998, was $410,400 compared to a
revenue of $172,251 for the six months ended December 31, 1997. For the six
months ended December 31, 1998, the Company recorded sales totaling
approximately $303,000 0f its DV3D(R) AnimotionTM print products compared to
sales of approximately $52,000 for the six months ended December 31, 1997. The
Company believes that the increase in revenue was the result of focused
marketing efforts, expedited product delivery, exacting quality standards and
increased customer service.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following documents are filed as part of this report:
1. The following Exhibits are filed herein: 27.0 Financial Data Schedule
2. Reports on Form 8-K filed: None
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, duly authorized.
DIMENSIONAL VISIONS INCORPORATED
DATED: February 5, 1999 By: /s/ John D. McPhilimy
--------------------------------------
John D. McPhilimy, Chairman, President
and Chief Executive Officer
(9)
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 35,930
<SECURITIES> 0
<RECEIVABLES> 374,471
<ALLOWANCES> 215,743
<INVENTORY> 82,995
<CURRENT-ASSETS> 505,914
<PP&E> 453,360
<DEPRECIATION> 262,341
<TOTAL-ASSETS> 1,037,840
<CURRENT-LIABILITIES> 667,314
<BONDS> 0
0
679,310
<COMMON> 3,642
<OTHER-SE> (890,231)
<TOTAL-LIABILITY-AND-EQUITY> 1,037,840
<SALES> 410,400
<TOTAL-REVENUES> 410,400
<CGS> 245,561
<TOTAL-COSTS> 245,561
<OTHER-EXPENSES> 584,297
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,420
<INCOME-PRETAX> (427,580)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (427,580)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> 0
</TABLE>
