SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT UNDER SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to____________
Commission File Number: 0-17843
REGAL ONE CORPORATION
(name of small business issuer as specified in its charter)
Florida 95-4158065
(State or other jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
551 Drift Stone Avenue, Las Vegas, Nevada 89123
(Address of Principal Executive Offices) (Zip code)
Issuer's telephone number: (702) 897-5331
Securities registered under section 12(b)
of the Exchange Act: None
Securities registered under section 12(g)
of the Exchange Act: Common Stock, no par
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES [ ] NO [X]
Check here if the disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this 10-KSB or
any amendment to this Form 10-KSB. [ ]
Revenues for the year ending December 31, 1998 were $ -0-.
The aggregate market value of the voting stock held by non-affiliates of
the Company, based upon the average bid price of the common stock on July 5,
1999 was approximately $436,954. As of July 5, 1999, the Company had 1,191,217
shares of common stock issued and outstanding and 208,965 shares of convertible
preferred stock issued and outstanding, each of which is convertible into 100
shares of the Company's common stock.
REGAL ONE CORPORATION
FORM 10-KSB
for the fiscal year ended December 31, 1998
TABLE OF CONTENTS
Part I Page
Item 1. Description of Business 3
Item 2 Description of Property 5
Item 3 Legal Proceedings 5
Item 4 Submission of Matters to a Vote of
Security Holders 5
Part II
Item 5 Market for the Company's Common Equity and
Related Stockholder Matters 6
Item 6 Management's Discussion and Analysis and
Plan of Operation 7
Item 7 Financial Statements 9
Item 8 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 10
Part III
Item 9 Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section
16(a) of the Exchange Act 11
Item 10 Executive Compensation 12
Item 11 Security Ownership of Certain Beneficial
Owners and Management 13
Item 12 Certain Relationships and Related Transactions 13
Item 13 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General and Background
Regal One Corporation (the "Company") is a Florida corporation
originally incorporated as Electro-Mechanical Services, Inc.
("EMS") in 1959. In 1974, Mr. Israel Rubinstein, currently the
President, a director and a shareholder of the Company, acquired
the Company, then named EMS, which at the time had no operations.
Pursuant to the merger agreement, Mr. Rubinstein transferred the
assets of Regal Muffler Centers, a franchise network of over 100
muffler shops that he founded in 1972 and solely owned, into EMS.
In March of 1975, EMS amended its certificate of incorporation and
changed its name to Regal International Holding Co., Inc. In 1976,
the Company sold substantially all of its assets, but Mr.
Rubinstein retained control of the Company. In June 1988, after
merging with its wholly owned Nevada Subsidiary, Regal One
Corporation, the Company changed its name to Regal One Corporation,
but remained a Florida entity.
From 1987 to 1992, the Company was engaged in the acquisition
and holding of real estate, primarily in the Western United States.
Until the end of 1992, the Company's assets consisted primary of
irrevocable options to acquire the real estate in exchange for
shares of the Company's common stock. Generally, the Company would
issue to the Seller of the property shares of its common stock with
a fair value equal to the value of the real estate on the date of
the agreement.
During 1992, due to the protracted depressed national real
estate market, the Company decided to abandon its real estate
operations and pursue opportunities in the pharmaceutical and
health fields.
Xechem, Inc.
In January, 1993, the Company executed an agreement to acquire
Xechem, Inc. The total costs incurred by the Company relating to
the proposed investment in Xechem were approximately $1,012,000.
On January 14, 1994, the agreement with Xechem was canceled and a
settlement agreement was entered into whereby the Company received
60,000 shares of common stock of Xechem, $250,000 in cash and the
satisfaction of $131,000 of liabilities at no cost to the Company.
Accordingly, based on this settlement agreement, the net realizable
cost of the Xechem investment was adjusted down to the estimated
fair value of $150,000, resulting in a loss of $142,645 in 1994.
The Company then sold 20,000 shares of Xechem (one third of its
investment) for $50,000. In 1995, the Company distributed the
remaining 40,000 shares of Xechem common stock to consultants or
advisors of the Company for services provided to the Company.
Carbonex Systems Corporation
In August, 1995, the Company acquired in a reverse acquisition
all of the issued and outstanding shares of common stock of
Carbonex Systems Corporation ("Carbonex"), a development stage
Delaware Corporation, owning certain exclusive rights to a
proprietary emission reduction system for internal combustion
engines. To effect the acquisition, the Company issued a total of
464,000 shares of 8.75% convertible, participating voting Series B
Preferred Stock (the "Preferred Stock"). Each share of Preferred
Stock is convertible into 100 shares of common stock and has 100
votes for each vote allowed to a share of common stock.
In June, 1996, the Company entered into a Stock Exchange
Settlement Agreement and General Release whereby the Company
exchanged all of the issued and outstanding shares of common stock
of Carbonex for 255,035 shares of Preferred Stock owned by Gene
Bemel and certain members of his family. As part of the agreement,
the Company assumed certain specified accounts payable totaling
approximately $61,000. The net impact of this transaction was a
gain on sale of $295,803, primarily due to the forgiveness of debt
and accrued interest payable (see note 3 to the Financial
Statements). As a result of this transaction, the Company has
issued and outstanding 208,965 shares of Preferred Stock.
Quality Franchise Systems, Inc.
In November, 1996, the Company executed a Letter of Intent to
acquire all of the issued and outstanding stock of Quality
Franchise Systems, Inc. However, a final agreement was never
completed, and the Company is no longer pursuing this acquisition.
Safesight, Inc.
In July, 1997, the Company announced the acquisition of
Safesight, Inc., a development-stage company engaged in the design
of vehicle anti-collision warning products for the automobile,
commercial vehicle, recreational vehicle and motorcycle markets.
In August, 1997, the parties elected not to proceed with this
transaction because of the parties' inability to obtain adequate
funding for operations.
Current Operations
In April, 1998, the Company entered into an agreement to merge
a newly formed subsidiary of the Company with Infectech,
Inc.("Infectech"). Infectech, founded In 1989, is a development-
stage biotechnology company which owns 15 patents for the rapid
identification and antibiotic sensitivity testing of 34 disease-
causing bacteria. On August 5, 1998, the Company announced that
Infectech, Inc. had unilaterally acted to terminate the merger
agreement between the two parties. Infectech stated as its reason
that it had not been successful in raising the requisite $300,000
prior to June 30, 1998. Infectech further notified the Company
that it proposed to arbitrate the return of $56,000 paid by
Infectech for legal fees and certain other merger-related expenses
of the Company, as per the merger agreement. On November 18, 1998,
the Company and Infectech, Inc. resolved the matter subject to
arbitration, with the Company issuing 10,000 shares of restricted
common stock to Infectech, Inc. on November 24, 1998.
Employees
Mr. Israel Rubinstein has been President, Chief Executive Officer
and a Director of the Company since 1975, except for the period
from August 7, 1995 to June 1, 1996, when Mr. Gene Bemel was
President as part of the Carbonex acquisition. The Company has
no full-time employees and no employee of the Company earned in
1997, or is currently earning annually, as much as $50,000. (See
Item 10, "Executive Compensation")
ITEM 2. DESCRIPTION OF PROPERTY
As of December 31, 1998, the Company did not and currently does
not own or lease any real property.
The Company's current street and mailing address is:
Regal One Corporation
551 Driftstone Avenue
Las Vegas, NV 89123
(702) 897-5331
The Company did not and currently does not have any tangible
fixed assets as of December 31, 1998
ITEM 3. LEGAL PROCEEDINGS
The Company has no current legal proceedings pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
For the fourth quarter of the fiscal year ending December 31,
1998, there were no matters submitted to a vote of security holders
through the solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information
The Company's shares of common stock trade on the OTC Bulletin
Board under the symbol "RONE". The following table sets forth the
range of high and low bid quotes of the Company's common stock per
quarter as provided by NASDAQ Trading and Marketing Services (which
reflect inter-dealer prices without retail mark-up, mark-down or
commission and may not necessary represent actual transactions).
Common Stock 1998 1997 1996
High Low High Low High Low
Quarter ended:
March 31: 1.28 .3125 .75 .688 2.25 .375
June 30: 1.4375 .625 1.50 .50 1.625 .3125
September 30: .875 .25 1.23 .583 .75 .375
December 31: .375 .25 .563 .313 1.3125 .325
Quarter ended March 31, 1999:
High: .5625
Low: .25
Shareholders
As of July 5, 1999, there were approximately 604 shareholders
of record, inclusive of those brokerage firms and/or clearing
houses holding the Company's common shares in "street name".
Dividend Matters
The Company has not paid or declared any dividends upon its
common stock since its inception, and does not contemplate or
anticipate paying any dividends in the foreseeable future. Any
future declaration of cash or stock dividends will be at the
discretion of the Board of Directors and will depend upon the
financial condition, capital requirements, earnings, and liquidity
of the Company as well as other factors that the Board of Directors
may deem relevant.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following discussion should be read in conjunction with
the Company's financial statements and notes thereto included in
Item 7 of this Form 10-KSB report.
The Company was incorporated in 1959 in Florida. Since that
time, the Company has owned and operated, and subsequently sold
off, a number of businesses. During 1987, the Company pursued a
policy of using its common stock to purchase, either in fee simple
or as an irrevocable option to purchase, a number of parcels of
real estate, in the form of commercial, industrial, residential and
development stage land parcels. In 1992, market conditions for
real estate were no longer deemed to be favorable and the Company
decided to abandon its real estate operations and pursue other
courses of operation.
In January, 1993, the Company agreed to acquire Xechem, Inc.,
a development-stage company engaged in the research and development
of pharmaceuticals from plants and other naturally-occurring
sources. However, the transaction was terminated in January, 1994
pursuant to a settlement agreement.
In August, 1995, the Company acquired all of the issued and
outstanding common stock of Carbonex Systems Corporation
("Carbonex"). In June, 1996, the Company entered into a Stock
Exchange, Settlement Agreement and General Release whereby the
Company exchanged with its then-principal shareholders, Gene Bemel
and members of his family, all of the issued and outstanding common
stock of Carbonex for 255,035 shares of Preferred Stock.
In November, 1996, the Company executed a Letter of Intent to
acquire all of the issued and outstanding stock of Quality
Franchise Systems, Inc. However a final agreement was never
completed and the Company is no longer pursing this acquisition.
In July, 1997, the Company announced the acquisition of
Safesight, Inc., a development-stage company engaged in the design
of vehicle anti-collision warning products. However, in August,
1997, the parties elected not to proceed with the transaction
because of the inability to obtain adequate funding for operations.
In April, 1998, the Company entered into an agreement to merge
a newly formed subsidiary of the Company with Infectech.
Infectech, founded in 1989, is a development-stage biotechnology
company which owns 15 patents for the rapid identification and
antibiotic sensitivity testing of 34 disease-causing bacteria.
On August 5, 1998, the Company announced that Infectech, Inc.
had unilaterally acted to terminate the merger agreement between
the two parties. Infectech stated as its reason that it had not
been successful in raising the requisite $300,000 prior to
June 30, 1998. Infectech further notified the Company that
it proposed to arbitrate the return of $56,000 paid by Infectech
for legal fees and certain other merger-related expenses of the
Company, as per the merger agreement. On November 18, 1998,
the Company and Infectech, Inc. resolved the matter subject to
arbitration, with the Company issuing 10,000 shares of restricted
common stock to Infectech, Inc. on November 24, 1998. (See Item 1,
"Description of Business - Current Operations")
Plan of Operation
Through December 31, 1998, the Company had no active business
operations but continued to pursue acquisition candidates. The
independent auditor's report for the fiscal year ended December 31,
1997 will include an explanatory paragraph calling attention to a
going concern issue. The Company has suffered recurring losses
and, at December 31, 1998, has a stockholders' deficit. The
Company's ability to continue as a going concern depends upon the
Company obtaining additional financing to satisfy the operating
needs of the Company and/or complete a successful merger.
Liquidity and Capital Resources - December 31, 1998 Compared to
December 31, 1997
During the current year, the Company had continuing losses
from operations. There can be no assurances that the Company will
be able to secure long-term borrowings with which to finance its
future operations. The Company does not currently have any
established bank lines of credit. The Company's lack of liquidity
is reflected in the table below, which shows comparative working
capital (current assets less current liabilities) which is an
important measure of the Company's ability to meet its short-term
obligations.
December 31, 1998 December 31, 1997
Working Capital
(deficit) $ (187,151) $ (108,752)
The Company's financial condition at December 31, 1998
reflects an immediate inability to meet its short-term obligations.
At December 31, 1998, the Company had $4,818 cash on hand. The
liabilities of the Company at December 31, 1998 aggregated
$191,969, consisting primarily of accounts payable to accountants,
lawyers and other service providers. Accounts payable are due and
in default, and it is possible that persons to whom these
obligations are due may seek to collect the amounts due them.
The Company's Stock Option Plan is for its employees,
directors, officers, and consultants or advisors of the Company.
In May, 1995, the Company filed a registration statement on Form S-8
covering 3,000,000 shares of common stock for this Plan. Since
May, 1995, holders have exercised options to purchase 548,506
shares of common stock. No options were exercised during the year
ended December 31, 1998, leaving 2,451,494 yet available, with an
amended expiration date of March 31, 1999. (See the Company's 14c,
filed April 8, 1998).
Capital Expenditures and Commitments
During the fiscal year ended December 31, 1998, the Company
had no capital expenditures. The amount of capital expenditures
required is uncertain, and may be beyond that generated
from future operations. There can be no assurance that the
Company will be able to obtain any such capital or merger
acquisition candidate on satisfactory terms.
Results of Operations - The fiscal year ended December 31, 1998
compared to the fiscal year ended December 31, 1997.
The Company reported no revenues for the current or prior year.
During the years ended December 31, 1998 and 1997, operating
expenses were $103,397 and $67,666, respectively, primarily
consisting of professional and consulting fees. During the year
ended December 31, 1998, the Company had other income of $25,000,
resulting from expenses paid by Infectech, Inc. (See Item 1,
"Description of Business"). As a result, the Company reported net
losses of $78,397 and $67,666, for the years ended December 31, 1998,
and 1997, respectively.
Year 2000 Issues
Because many computer systems use only two digits to record the
year in date fields, such systems may not be able to accurately
process dates including the year 2000 and after. The effects of
this problem will vary from system to system and may adversely
affect a company's operations as well as the ability to prepare
financial statements. In order to determine the impact that Year
2000 issues have on the Company, (1) a complete assessment of all
systems potentially affected by Year 2000 issues needs to be
completed, and (2) management needs to determine the consequences
that its Year 2000 issues would have on its business, results of
operations, and financial condition. The Company's assessment of
its Year 2000 issues includes addressing whether third parties with
whom the Company has a material relationship are Year 2000 compliant.
Although the Company has not completed any evaluation of its Year
2000 issues or assessed third party issues, since the Company
currently has no operations and is not reliant on internal computer
systems for any matters, it believes that the impact of Year 2000
issues will have an immaterial effect on its business, results of
operations, and financial condition.
Factors that may affect future results
A number of uncertainties exist that may affect the Company's
future operating results, including the possibility of uncertain
general economic conditions, market acceptance of the Company's
planned future operations, the Company's ability to manage expense
growth and the ability to acquire long-term funding (including
costs of the Infectech merger).
ITEM 7. FINANCIAL STATEMENTS
The following financial statements listed in the table below have
been prepared in accordance with the requirements of Item 310 (a)
of Regulation SB (see Item 13).
Page
Independent Auditor's Report F-2
Balance Sheet at December 31, 1998 F-3
Statement of Operations for the fiscal years ended
December 31, 1998 and December 31, 1997 F-4
Statements of Shareholders' Equity (Deficit)
for the fiscal years ended December 31, 1998
and December 31, 1997 F-5
Statement of Cash Flows for the fiscal years ended
December 31, 1998 and December 31, 1997 F-6
Notes to the Financial Statements F-8
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements with accountants with respect to
accounting and/or financial disclosure for any periods reported
on in this Form 10-KSB.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT
The following table sets forth certain information concerning the
current directors and executive officers of the Company:
Name Age Position
Israel Rubinstein 71 President, Chief Executive
Officer and Director
Dr. Malcolm R. Currie 72 Chairman of the Board
Richard Babbit 73 Secretary, Treasurer and
Director
Michael Platt 57 Director
Each director holds office for a one-year term until his
successor has been elected and qualified at the annual meeting of
the Company's shareholders. The members of the Board of Directors
serve without remuneration. Corporate Officers are elected by the
Board of Directors and serve at the discretion of the Board.
Israel Rubinstein has been President, Chief Executive Officer
and a Director of the Company since 1975, except for the period
from August 7, 1995 to June 1, 1996, when Mr. Gene Bemel was
President as part of the Carbonex acquisition. From 1977 to 1984,
Mr. Rubinstein owned and operated several travel agencies and was
also involved in real estate development projects in Southern
California. In 1972, Mr. Rubinstein founded Regal Mufflers
Centers, a franchise network which grew to over 100 muffler shops
by 1976. This network was subsequently merged into the Company.
Previously, in 1961, Mr. Rubinstein formed Lawn-Mat Chemical and
Equipment Corporation, the first Company to utilize automated
mechanical equipment to serve suburban property owners' demand for
landscaping and lawn care services.
Dr. Malcolm Currie was appointed as Chairman of the Board of
Directors of the Company in August, 1995. From 1969 to 1973, Dr.
Currie was the Undersecretary of Research and Engineering for the
Office of Defense. From 1973 to 1977, Dr. Currie was President of
the Missile Systems Group for Hughes Aircraft Corporation. From
1977 to 1988, Dr. Currie started as Executive Vice President and
eventually became Chief Executive Officer and Chairman of the Board
of Delco Electronics Corporation. From 1992 to present, Dr. Currie
has been Chairman Emeritus of Hughes Aircraft Corporation. Dr.
Currie is also on the Board of Directors of Unocal Oil. Dr. Currie
obtained a graduate MBA from the University of California,
Berkeley, and a PhD in Research Engineering at the University of
California, Berkeley.
Richard Babbitt was appointed as the Secretary and Treasurer
and a member of the Board of Directors of the Company in August,
1995. Mr. Babbitt has been the President of the Medical Supply
Company, Bl Industries, American Safety Equipment Corporation, and
Bl Advisors. Mr. Babbitt is an international marketing consultant
to Teikuro Corporation and Cosmo Corporation in Japan. Mr. Babbitt
is also a member of the Board of Directors of Unisyn Biowaste
Technology and Interstate Safety Corporation. Mr. Babbitt obtained
an undergraduate degree from Purdue University.
Mr. Michael E. Platt was appointed as a member of the Board of
the Directors of the Company in August, 1995. Michael E. Platt is
President of Fresh Food Ventures, Inc. Mr. Platt co-founded
Peerless Industrial Group, Inc. ("Peerless") in 1983, and was
responsible for building it to an organization of more than 500
people, raising capital, taking the company public in 1985 and
developing 12 Fuddruckers Restaurants in four Midwestern states.
In 1994, Peerless sold its Fuddruckers Restaurants and in 1995
completed the acquisition of the Peerless Chain Company, a major
domestic marketer of various chain products. Mr. Platt served as
a Director of New Products for Kentucky Fried Chicken Corporation,
and in various marketing positions at General Foods Corporation.
Compliance with Section 16 of The Securities Exchange Act 1934
To the Company's knowledge, based on a review of such
materials as are required by the SEC, no officer, director, or
beneficial holder of more than five percent of the Company's issued
and outstanding shares of common stock has filed with the SEC any
form or report required to be so filed pursuant to section 16(a) of
the Securities Exchange Act of 1934 during the fiscal year ended
December 31, 1998 or prior thereto (see Item 11 for a list of the
Company's officers, directors and beneficial holders of more than
five percent of the Company's issued and outstanding shares of
common stock).
Based solely on a review of such materials as is required by
the SEC, the Company is not aware of any transactions that were not
reported.
ITEM 10. EXECUTIVE COMPENSATION
There was no cash compensation paid by the Company to the
executive officers of the Company for the fiscal years ended
December 31, 1998 and 1997.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The persons set forth on the chart below are known to the
Company to be the beneficial owners of more than five percent of
the Company's outstanding voting common stock as of July 5, 1999.
Information concerning the number and percentage of shares of
voting common stock of the Company owned on record and beneficially
by management is set forth on the chart below:
Shares of common Percent of
Name and Address of stock beneficially common stock
beneficial owner owned owned
Israel and Ahuva Rubinstein 131,840 10.9%
551 Drift Stone Avenue
Las Vegas, Nevada 89123
Yifal Shaham 60,625 5.0%
9720 Holcolm Street
Los Angeles, CA 90035
All Directors and Officers 131,840 10.9%
as a group (4 persons)
(1) Based upon 1,196,342 shares of common stock issued and
outstanding as of July 5, 1999. This does not take into
account 208,965 shares of Preferred stock representing in the
aggregate 24,296,500 common shares votes. Each share of
Preferred Stock is convertible into 100 shares of voting
common stock. Of the Preferred Stock outstanding, 96,750
shares (46.3%) are held by the Directors of the Company (Dr.
Malcolm Currie, 30,000 shares; Richard Babbit, 30,000 shares;
Michael Platt, 36,750 shares).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
None.
A copy of any of the exhibits listed or referred to above will
be furnished at a reasonable cost to any person who was a
shareholder of the Company on March 31, 1998 upon receipt from any
such person of written request for any such exhibit. Such request
should be sent to the Company with the attention directed to the
Corporate Secretary.
Reports on Form 8-K
In April, 1998, the Company entered into a Plan and Agreement
of Merger with Infectech, a Delaware Corporation ("Infectech").
The Company would have issued approximately 26,320,520 Shares of
common stock to Infectech's stockholders so that on the effective
date of the merger, the shareholders of Infectech would own, in the
aggregate, 85% of the common stock of the Company. Upon closing,
the Company would have changed its name to Infectech, Inc., and the
shareholders of Regal One as a group would own 15%. The Board of
Directors of Infectech would have become the Board of Directors of the
Company. For each share of Infectech's issued and outstanding
common stock, its stockholders would have received approximately 3.01
shares of Regal One common stock, subject to further adjustment
downward for issuances of securities by Infectech pursuant to stock
options, consulting agreements or other private offerings. The
Company was to cause holders of its Preferred Stock to convert their
shares into an aggregate of not more than 3,447,923 shares of
common stock, which together with a current 1,196,342 Shares of
common stock outstanding, would have resulted in a total of 30,964,785
shares to be outstanding upon closing of the merger. The transaction
was contingent upon the approval of the shareholders of both companies,
upon certain regulatory approvals and other conditions. One condition
of the merger was that the Securities and Exchange Commission must
declare effective the Company's registration of the Shares of common
stock to be issued to Infectech. Another condition of the merger was
that Infectech raise a minimum of $300,000 through an offering or other
funding source prior to June 30, 1998. On August 5, 1998, the Company
announced that Infectech unilaterally acted to terminate the merger
agreement between the two parties. Infectech stated as its reason
that it had not been successful in raising the requisite $300,000
prior to June 30, 1998. Infectech further notified the Company that
it proposed to arbitrate the return of $56,000 paid by Infectech for
legal fees and certain other merger-related expenses of the Company,
as per the merger agreement. On November 18, 1998, the Company and
Infectech resolved the matter subject to arbitration, with the Company
issuing 10,000 shares of restricted common stock to Infectech on November
24, 1998.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Exchange Act, the Company has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REGAL ONE CORPORATION
Date: July 15, 1999 /s/ Israel Rubinstein
Israel Rubinstein, President
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the Company and
in the capacities end on the dates indicated.
Signatures Title Date
/s/ Israel Rubinstein President, Principal July 15, 1999
Israel Rubinstein Executive Officer and
a Director
/s/ Malcolm R. Currie Chairman of the Board, July 15, 1999
Dr. Malcolm R. Currie and a Director
/s/ Richard Babbitt Secretary, Treasurer and July 15, 1999
Richard Babbitt a Director
/s/ Michael E. Platt Director July 15, 1999
Michael E. Platt
<PAGE>
Albright, Persing & Associates, Ltd.
CERTIFIED PUBLIC ACCOUNTANTS
1025 Ridgeview Dr., Suite 300
Reno, Nevada 89509
Phone (775) 826-5432
FAX (775) 826-5510
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Board of Directors
Regal One Corporation
We have audited the accompanying balance sheets of Regal One Corporation as
of December 31, 1998 and 1997, and the related statements of income and
comprehensive income, stockholders' equity (deficit) and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As explained in Note 9, the Company must provide Year 2000 disclosure in the
notes to the financial statements if (1) the Company's assessment of its Year
2000 issues is not complete, or (2) management determines that the consequences
of its Year 2000 issues would have a material effect on the Company's business,
results of operations, or financial condition. The Company claims, in Note 9,
that, since it is has no current operations and it does not rely on internal
computerized systems for any matters, it will be unaffected by Year 2000
concerns. We have been unable to satisfy ourselves as to the accuracy of that
representation.
In our opinion, except for the representation in Note 9 as discussed in the
preceding paragraph, the financial statements referred to above present fairly,
in all material respects, the financial position of Regal One Corporation as of
December 31, 1998 and 1997 and the results of its operation and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that Regal
One Corporation will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company's ability to generate sufficient cash
flows to meet its obligations, either through future revenues and/or additional
debt or equity financing, cannot be determined at this time. In addition, the
Company has suffered recurring losses and at December 31, 1998 and 1997, has a
stockholders' deficit. These uncertainties raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. These financial statements do
not include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.
Reno, Nevada
May 27, 1999
<PAGE>
REGAL ONE CORPORATION
BALANCE SHEETS
December 31, 1998 and 1997
(See Accountants' Audit Report)
<TABLE>
<S> <C> <C>
1998 1997
ASSETS
Current Assets
Cash $ 4,818 $ 55
--------- ---------
4,818 55
--------- ---------
Other Assets
Deferred tax asset, net - -
--------- ---------
Total Assets $ 4,818 $ 55
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Due to stockholders $ 54,190 $ 2,411
Accounts payable and accrued
liabilities 137,779 106,398
--------- ---------
Total Current Liabilities 191,969 108,809
--------- ---------
Stockholders' Equity (Deficit)
Preferred stock, no par value.
Authorized 50,000,000 shares;
issued and outstanding 208,965
shares in 1998 and 1997 500 500
Common stock, no par value.
Authorized 50,000,000 shares;
issued and outstanding 1,191,217
shares in 1998 and 1,196,342
shares in 1997 5,997,113 5,941,113
Accumulated deficit (6,184,764) (6,050,367)
--------- ---------
Net Stockholders' Equity (Deficit) (187,151) (108,754)
--------- ---------
Total Liabilities and Stockholders'
Equity (Deficit) $ 4,818 $ 55
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
REGAL ONE CORPORATION
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31, 1998 and 1997
(See Accountants' Audit Report)
<TABLE>
<S> <C> <C>
1998 1997
Expenses:
Consulting and outside services $ 51,543 $ 14,575
Professional services 79,711 48,674
Other, selling, general and
administrative expenses 3,143 4,417
--------- ---------
134,397 67,666
--------- ---------
Net Loss Before Extraordinary Item (134,397) (67,666)
--------- ---------
Extraordinary item - gain on extinguishment
of debt (net of income tax of $0) - 15,690
--------- ---------
Net Income (Loss) $ (134,397) $ (51,976)
Other Comprehensive Income - -
--------- ---------
Comprehensive (Loss) (134,397) (51,976)
========= =========
Basic and Diluted Loss per Share
Before Extraordinary Gain $ (.11) $ (.05)
========= =========
Extraordinary Gain $ - $ .01
========= =========
Basic and Diluted Net Loss
per Common Share $ (.11) $ (.04)
========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
REGAL ONE CORPORATION
STATEMENTS OF STOCKHOLDERS' DEFICIT
Years Ended December 31, 1998 and 1997
(See Accountants' Audit Report)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net
Stockholders'
Preferred Stock Common Stock Accumulated Equity
Shares Amount Shares Amount Deficit (Deficit)
Balance, December 31, 1995 464,000 $ 500 1,024,674 $5,801,113 $(6,047,213) $ (245,600)
Return of series B preferred
stock in connection with
sale of Carbonex Systems (255,035) - - - - -
Warrants exercised for the
purchase of common stock
during 1996 - - 159,901 130,000 - 130,000
Warrants exercised for the
purchase of common stock
during 1996 - - 12,300 10,000 - 10,000
Net Income - - - - 48,822 48,822
--------- --------- --------- --------- --------- ---------
Balance, December 31, 1996 208,965 500 1,196,875 5,941,113 (5,998,391) (56,778)
Adjustment to number of shares
for prior stock split - - (533) - - -
Net (Loss) - - - - (51,976) (51,976)
--------- --------- --------- --------- --------- ---------
Balance, December 31, 1997 208,965 500 1,196,342 5,941,113 (6,050,367) (108,754)
Stock issued for cash - - 10,000 56,000 - 56,000
Adjustment to number of shares
for share cancellations
never reissued - - (15,125) - - -
Net (Loss) - - - - (134,397) (134,397)
--------- --------- --------- --------- --------- ---------
Balance, December 31, 1998 208,965 500 1,191,217 $5,997,113 $(6,184,764) $(187,151)
========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
REGAL ONE CORPORATION
STATEMENTS OF CASH FLOWS
December 31, 1998 and 1997
(See Accountants' Audit Report)
<TABLE>
<S> <C> <C>
1998 1997
Cash flows from operating activities:
Net income (loss) $ (134,397) $ (51,976)
----------- -----------
Adjustments to reconcile net
loss to net cash used by
operating activities:
Noncash consulting fees 42,000 -
Expenses paid by officer 814 -
Increase (Decrease) in accounts
payable and accrued liabilities 31,381 36,881
----------- -----------
Total Adjustments 74,195 36,881
----------- -----------
Net cash used by operating activities (60,202) (15,095)
----------- -----------
Cash flows from financing activities:
Proceeds from sale of stock 56,000 -
Proceeds from stockholder loans 8,965 -
----------- -----------
Net cash provided (used)
by financing activities 64,965 -
----------- -----------
Net increase (decrease) in cash 4,763 (15,095)
----------- -----------
Cash at beginning of year 55 15,150
----------- -----------
Cash at end of year $ 4,818 $ 55
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
REGAL ONE CORPORATION
STATEMENTS OF CASH FLOWS
December 31, 1998 and 1997
(See Accountants' Audit Report)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1998 1997
Cash paid during the year for interest $ - $ -
========= =========
Cash paid during the year for income taxes $ - $ -
========= =========
SUPPLEMENTAL DISCLOSURE OF OTHER INVESTING AND FINANCING ACTIVITIES:
During 1998, an officer of the Company paid expenses of $814.
The accompanying notes are an integral part of these financial statements.
<PAGE>
REGAL ONE CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Business
Regal One Corporation (the "Company") located in Las Vegas, Nevada, is a
Florida Corporation originally incorporated as Electro-Mechanical Services,
Inc., in 1959 in Florida. The Company has been involved in a variety of
industries including automobile mufflers, real estate, and the pharmaceutical
and health fields. The Company is currently not in formal business operations,
but is actively seeking a merger candidate.
The Company has not generated significant revenue during the years ended
December 31, 1998 and 1997, and has funded its operation primarily through the
issuance of equity. Accordingly, the Company's ability to accomplish its
business strategy and to ultimately achieve profitable operations is dependent
upon its ability to obtain additional debt or equity financing, or to merge
with a going concern Company. There can be no assurance that the Company will
be able to obtain additional funding, and, if available, will be obtained on
terms favorable to or affordable by the Company. The Company's management is
currently exploring a merger option. Ultimately, however, the Company will
need to achieve profitable operations and/or merge with a going concern Company
in order to continue as a going concern.
In addition, the Company has suffered recurring losses and at December 31,
1998 has a shareholders' deficit. These factors indicate that the Company's
ability to continue as a going concern is dependent upon the Company obtaining
additional financing to satisfy the operating needs of the Company. The
Company is seeking a merger candidate and believes that a successful merger
will occur in the near future.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.
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
disclosures 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 these estimates.
Fair Value of Financial Instruments
Effective July 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments" ("SFAS No. 107"). The carrying amounts reported in the balance
sheet for cash and cash equivalents approximate those assets' fair values.
Active markets for the Company's other financial instruments that are subject
to the fair value disclosure requirements of SFAS No. 107 do not exist and
there are no quoted market prices for these instruments. Accordingly, it is
not practicable to estimate the fair values of such financial instruments
because of (1) the limited information available to the Company, (2) the
significance of the cost to obtain independent appraisals for this purpose, and
(3) due to the immateriality of such amounts.
Income Taxes
In February, 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"). SFAS No. 109 required a change from the deferred
method of accounting for income taxes of APB Opinion 11 to the asset and
liability method of accounting for income taxes. Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
SFAS No. 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date.
Effective January 1, 1993, the Company adopted SFAS No. 109. The
application of SFAS No. 109 had an immaterial effect on the Company's financial
statements for the periods prior to January 1, 1993 due to operating losses
incurred by the Company in 1993 and prior years.
Concentrations of Credit Risk
Financial instruments which potentially subject the Company to credit risk
consist primarily of cash in bank. The Company maintains its cash in bank
deposit accounts which, at times, may exceed federally insured limits.
Earnings per share
In February, 1997, the Financial Accounting Standards Board issued SFAS
No. 128, Earnings per Share. SFAS No. 128 simplifies the standards for
computing earnings per share ("EPS") and was effective for financial statements
issued for periods ending after December 15, 1997, with earlier application not
permitted. Upon adoption, all prior EPS data was restated.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the fully diluted loss per share for 1998 and 1997 was antidilutive,
basic and diluted earnings per share are the same. Accordingly, options to
purchase common stock in 1998 and 1997 of 2,451,494 shares, and 20,896,500
common shares potentially issuable upon conversion of preferred stock existing
at the end of 1998 and 1997 were not included in the calculation of diluted
earnings per common share.
Comprehensive Income
In June, 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting and presentation of comprehensive income and its components in a
full set of general-purpose financial statements. This statement does not,
however, require a specific format for the disclosure, but requires the
Company to display an amount representing total comprehensive income for the
period in its financial statements. Comprehensive income is determined by
adjusting net income by other items not included as a component of net income,
such as the unrealized gain (loss) on certain marketable securities. During
the periods presented, the Company had no additional components that were not
a part of net income (loss), therefore, comprehensive income and net income
are the same amount.
NOTE 2 - ACQUISITION OF CARBONEX SYSTEMS CORPORATION
On August 7, 1995, the Company acquired all the outstanding shares of
common stock of Carbonex Systems Corporation ("Carbonex"), in a business
combination accounted for as a purchase. Carbonex Systems Corporation is a
development stage Delaware corporation owning certain exclusive rights to a
proprietary emission reduction system for internal combustion engines. The
results of operations of Carbonex Systems Corporation is included in the
accompanying financial statements since the date of acquisition. The total
cost of the acquisition was $-0-, because the fair market value of the assets
of Carbonex Systems was equal to the liabilities assumed.
During 1996, the Company entered into a "Stock Exchange, Settlement
Agreement, and General Release", effective June 1, 1996. The agreement called
for the exchange of all the outstanding Carbonex shares acquired in the above
acquisition for 255,035 shares of the Company's Preferred Series B stock
issued to effect the acquisition. The transaction resulted in a gain of
$295,803, which has been included in operations in 1996. The Company's share
of the equity in the undistributed earnings (loss) of Carbonex Systems for
1996, through the date of sale, was $(246,227), and is included in other
income.
Following is a summary of net assets and results of operations of
Carbonex Systems as of June 1, 1996, and for the periods then ended:
Cash and cash equivalents $ 70
Receivables 1,960
Patent, net of accumulated
amortization 2,858,738
---------
Total Assets 2,860,768
Accounts payable (66,095)
Contracts payable (2,800,000)
Other current liabilities (762,930)
---------
Net Assets $ (768,257)
=========
Sales and other revenue $ -
Expenses 246,227
---------
Income before income taxes (246,227)
Income taxes -
---------
Net Loss $ (246,227)
=========
NOTE 3 - PATENT RIGHTS
The Company had a license and Patent Assignment Agreement which grants it
an exclusive worldwide license to a proprietary emission reduction system for
internal combustion engines upon full payment of $3,000,000 plus interest at a
rate of 6% per annum payable over an 18 month period. The patent is being
amortized over its estimated life of 18 years. The following is a recap of
the patent:
1997 1996
Patent cost $ - $ -
Less: accumulated amortization - -
------ ------
Net Patent Cost $ - $ -
====== ======
In 1996, the patent was sold along with the sale of Carbonex (see Note 2).
NOTE 4 - CONTRACT PAYABLE
As a part of the acquisition of Carbonex (see Note 2), the Company assumed
the License and Patent Assignment Agreement between Carbonex and the patent
inventor. The agreement obligates Carbonex to pay the inventor, who is the
brother of the Chairman of the Board of Carbonex and the Chief Executive
Officer of the Company, $3,000,000 within 18 months, after which Carbonex will
own the issued patent together with all other proprietary rights thereto.
This note was transferred to Carbonex's responsibility on June 1, 1996 (Note
2).
NOTE 5 - STOCKHOLDERS' DEFICIT
The authorized number of shares of preferred stock is 50,000,000. The
Company's bylaws allow for segregating this preferred stock into separate
series. As of December 31, 1998, the Company has authorized 50,000 shares of
series A preferred stock and 464,000 shares of series B convertible preferred
stock. At December 31, 1998 and 1997, there were no outstanding shares of
series A preferred stock. At December 31, 1998 and 1997, 208,965 shares of
series B preferred stock were outstanding.
Holders of series A preferred stock shall be entitled to voting rights
equivalent to 1,000 shares of common stock. The series A preferred stock has
certain dividend and liquidation preferences over common stockholders.
Holders of series B preferred stock shall be entitled to voting rights
equivalent to 100 shares of common stock. The series B preferred stock is
entitled to a noncumulative dividend of 8.75% of revenues which exceed
$5,000,000. At the option of the holder of series B preferred stock, each
share can be converted to common stock at a rate of 100 shares of common for
each share of preferred.
As of December 31, 1998 and 1997, no dividends have been declared on the
series A or series B convertible preferred stock.
NOTE 6 - STOCK OPTIONS
On May 3, 1995, the Company adopted a stock option plan to provide
incentives to those individuals who serve or have served the Company as
employees, officers, directors or consultants. Under the plan, the Board of
Directors is authorized to grant option to individuals who have contributed,
or will contribute to the well being of the Company.
The Company applies APB Opinion 25 in accounting for its fixed stock option
plan. Accordingly, since the market value and the option price of the
Company's stock were equal on the measurement date, no compensation cost has
been recognized for the plan in 1997 or 1996. Had compensation cost been
determined on the basis of fair value pursuant to FASB Statement No. 123, net
income (loss) and earnings per share would have been impacted as follows:
1998 1997
Net Income (Loss)
As reported $ (134,397) $ (51,976)
=========== ==========
Pro forma $ (338,246) $ (663,524)
=========== ==========
Basic Earnings Per Share
As reported $ (.11) $ (.04)
=========== ==========
Pro forma $ (.29) $ (.55)
=========== ==========
Diluted Earnings Per Share
As reported $ (.11) $ (.04)
=========== ==========
Pro forma $ (.29) $ (.55)
=========== ==========
For purposes of estimating the fair value of each option granted in
accordance with FASB 123, the Black-Scholes Model was used. The following
assumptions were made in estimating fair value:
Dividend yield 0%
Risk-free interest rate 5.50% to 8.50%
Expected life 3 years
Expected volatility 124.42%
Compensation expense that would have been charged to operations had the
provisions of FASB 123 been applied were $203,849 in 1998 and $611,548 in 1997.
Following is a summary of the status of options outstanding during the
years ended December 31, 1998 and 1997:
Year Ended 12/31/98 Year Ended 12/31/97
Weighted Weighted
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
Outstanding at January 1 2,451,494 $ .8125 2,623,695 $ .8125
Granted - - - -
Exercised - - (172,201) .8125
Forfeited - - - -
--------- -------- --------- --------
Outstanding at December 31 2,451,494 $ .8125 2,451,494 $ .8125
========= ======== ========= ========
Options exercisable at
December 31 2,451,494 $ .8125 2,451,494 $ .8125
========= ======== ========= ========
Weighted average fair value
of options granted during
1998 and 1997 $ - $ -
========= ======== ========= ========
NOTE 7 - EARNINGS PER SHARE
The following data show the amounts used in computing earnings per share
and the effect on income and the weighted average number of shares of dilutive
potential common stock.
1998 1997
Income from continuing operations before
extraordinary items $(134,397) $ (67,666)
Less: preferred dividends - -
-------- --------
Income available to common stockholders
used in basic EPS $(134,397) $ (67,666)
======== ========
Income available to common stockholders
used in basic EPS $(134,397) $ (67,666)
Convertible preferred stock - -
-------- --------
Income available to common stockholders
after assumed conversions of dilutive
securities $(134,397) $ (67,666)
======== ========
Weighted average number of common
shares used in basic EPS 1,182,614 1,196,342
Effect of dilutive securities:
Stock options - -
Convertible preferred stock - -
-------- --------
Weighted number of common shares and
dilutive potential common stock used in
diluted EPS 1,182,614 1,196,342
======== ========
NOTE 8 - INCOME TAXES
As discussed in Note 1, the Company adopted Statement of Financial
Accounting Standards No. 109 effective January 1, 1993. One of the provisions
of Statement 109 enables companies to record deferred tax assets for the
benefit to be derived from the utilization of net operating loss carryforwards
and certain deductible temporary differences. At December 31, 1998 and 1997,
the tax effects of temporary differences that give rise to significant portions
of deferred tax assets are presented below:
1998 1997
Net operating loss carryforwards $ 627,617 $ 582,779
Less: valuation allowance (627,617) (582,779)
---------- ---------
$ - $ -
========== =========
Due to operating losses incurred by the Company, the Company established a
related valuation allowance of $627,617 at December 31, 1998.
As of December 31, 1998, the Company has net operating loss carryforwards of
approximately $1,803,933 for Federal income tax return purposes, which expire
through 2013. The future tax benefits are dependent upon the Company's ability
to generate future earnings.
NOTE 9 - YEAR 2000 ISSUES
Because many computer systems use only two digits to record the year in date
fields, such systems may not be able to accurately process dates including the
year 2000 and after. The effects of this problem will vary from system to
system and may adversely affect a company's operations as well as the ability
to prepare financial statements. In order to determine the impact that Year
2000 issues have on the Company, (1) a complete assessment of all systems
potentially affected by Year 2000 issues needs to be completed, and (2)
management needs to determine the consequences that its Year 2000 issues would
have on its business, results of operations, and financial condition. The
Company's assessment of its Year 2000 issues includes addressing whether third
parties with whom the Company has a material relationship are Year 2000
compliant.
Although the Company has not completed any evaluation of its Year 2000
issues or assessed third party issues, since the Company currently has no
operations and is not reliant on internal computer systems for any matters, it
believes that the impact of Year 2000 issues will have an immaterial effect on
its business, results of operations, and financial condition.
<PAGE>
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] DEC-31-1998
[CASH] 4818
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 4818
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 4818
[CURRENT-LIABILITIES] 191969
[BONDS] 0
[COMMON] 5997113
[PREFERRED-MANDATORY] 0
[PREFERRED] 500
[OTHER-SE] (6184764)
[TOTAL-LIABILITY-AND-EQUITY] 4818
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 134397
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (134397)
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (134397)
[EPS-BASIC] (.11)
[EPS-DILUTED] (.11)
</TABLE>
