SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------
For Quarter Ended September 30, 1998 Commission File No. 33-28562
TOUCAN GOLD CORPORATION
(Exact name of registrant as specified in charter)
Delaware 75-2661571
- - --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
8201 Preston Road, Suite 600
Dallas, Texas 75225
- - --------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (214) 890-8088
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
As of September 30, 1998, there were 7,714,600 shares of the common stock, $.01
par value, of the registrant issued and outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
--- ---
1
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TOUCAN GOLD CORPORATION
September 30, 1998
INDEX
PART I. FINANCIAL INFORMATION
Page No.
--------
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1998 and December 31, 1997
(unaudited)...................................................................................F-1
Consolidated Statements of Operations for the three months ended September 30, 1998
and 1997 (unaudited)..........................................................................F-2
Consolidated Statement of Operations for the nine months ended September 30, 1998
and 1997 and the period beginning on November 3, 1995 and ending on
September 30, 1998 (unaudited)................................................................F-3
Consolidated Statement of Stockholders' Equity for the nine months ended
September 30, 1998 and the year ended December 31, 1997 (unaudited)...........................F-4
Consolidated Statements of Cash Flows for the nine months ended September 30, 1998
and 1997 and the period beginning on November 3, 1995 and ending on September 30,
1998 (unaudited)..............................................................................F-5
Notes to Consolidated Financial Statements (unaudited)........................................F-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.........................................................................3
PART II. OTHER INFORMATION...............................................................................6
Item 1. Legal Proceedings...............................................................................6
------
Item 2. Changes in Securities...........................................................................6
------
Item 3. Default Upon Senior Securities..................................................................6
------
Item 4. Submission of Matters to a Vote of Security Holders.............................................6
------
Item 5. Other Information...............................................................................6
------
Item 6. Exhibits and Reports on Form 8-K................................................................6
------
SIGNATURES........................................................................................................7
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Toucan Gold Corporation
(a development stage company)
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, December 31,
ASSETS 1998 1997
-------------- ---------------
Cash $ 5,776 $ 504,795
Prepaid expenses 14,815 16,375
------------ -----------
Total current assets 20,591 521,170
Mineral rights 3,461,534 3,087,895
------------ -----------
$ 3,482,125 $ 3,609,065
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Amounts payable to related parties $ 563,336 $ 131,139
Accrued expenses and other liabilities 195,848 67,974
------------ -----------
Total current liabilities 759,184 199,113
Stockholders' equity
Preferred stock, par value .01 per share; authorized, 2,000,000
shares; issued and outstanding, none - -
Common stock, $.01 par value per share; authorized 30,000,000
shares; issued and outstanding, 8,039,933 shares 80,399 80,399
Additional paid-in capital 4,488,606 4,488,606
Deficit accumulated during the development stage (1,846,064) (1,159,053)
------------ -----------
Total stockholders' equity 2,722,941 3,409,952
------------ -----------
$ 3,482,125 $ 3,609,065
============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-1
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Toucan Gold Corporation
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended September 30,
(unaudited)
1998 1997
------------------- -----------------
Cost and expenses
Legal and professional fees $ 21,169 $ 26,803
Consulting fees 39,195 120,707
Claims abandoned 282,375 -
Travel costs 6,318 43,151
Shareholder relations 15,647 20,220
Other 19,389 84,646
------------------- -----------------
Total cost and expenses 384,093 295,527
Other (income) expense
Interest income - (12,238)
Interest expense 9,659 -
------------------- -----------------
Total other (income) expense 9,659 (12,238)
------------------- -----------------
Net loss $ 393,752 $ 283,289
=================== =================
Loss per share - basic and diluted $ .05 $ .04
=================== =================
Weighted average shares outstanding 8,039,933 7,458,230
=================== =================
</TABLE>
The accompanying notes are an integral part of these statements.
F-2
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<S> <C> <C> <C>
Toucan Gold Corporation
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine months ended September 30,
(unaudited)
For the period
November 3, 1995
(commencement of
operations) through
1998 1997 September 30, 1998
------------ ----------- ------------------
Cost and expenses
Legal and professional fees $ 97,298 $ 235,168 $ 568,247
Consulting fees 140,228 330,180 401,516
Claims abandoned 312,875 - 362,875
Travel costs 10,836 96,536 249,907
Shareholder relations 53,934 27,330 147,202
Other 58,241 98,793 131,194
------------ ----------- -----------
Total cost and expenses 673,412 788,637 1,860,941
Other (income) expense
Interest income (1,893) (51,951) (78,711)
Interest expense 15,492 - 63,834
------------- ----------- -----------
Total other (income) expense 13,599 (51,951) (14,877)
------------- ----------- -----------
Net loss $ 687,011 $ 736,686 $ 1,846,064
============= =========== ===========
Loss per share - basic and diluted $ .09 $ .10
============= ===========
Weighted average shares outstanding 8,039,933 7,447,918
============= ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
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Toucan Gold Corporation
(a development stage company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the nine months ended September 30, 1998
and the year ended December 31, 1997
(unaudited)
Deficit
accumulated
Common stock Additional during
--------------------- paid-in development
Shares Amount capital stage Total
--------------------- ---------- ------------ ---------
Balance at January 1, 1997 7,432,600 $ 74,326 $4,050,679 $ (434,506) $3,690,499
Issuance of common stock 607,333 6,073 437,927 - 444,000
Net loss - - - (724,547) (724,547)
--------- --------- ---------- ------------ ----------
Balance at December 31, 1997 8,039,933 80,399 4,488,606 (1,159,053) 3,409,952
Net loss - - - (687,011) (687,011)
--------- --------- ---------- ------------ ----------
Balance at September 30, 1998 8,039,933 $ 80,399 $4,488,606 $ (1,846,064) $2,722,941
========= ========= ========== ============ ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
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Toucan Gold Corporation
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30,
(unaudited)
For the period
November 3, 1995
(commencement
of operations)
through
1998 1997 September 30, 1998
------ ------ --------------------
Operating activities
Net loss $(687,029) $ (736,686) $(1,846,082)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Claims abandoned 312,875 - 362,875
Net changes in operating assets and liabilities
Prepaid expenses 1,560 (23,397) (14,815)
Accrued expenses and other liabilities 127,874 58,664 195,848
Amounts payable to related parties 432,197 - 563,336
---------- ---------- -----------
Net cash provided by
(used in) operating activities 187,477 (701,419) (738,838)
Investing activities
Acquisition of mineral rights (686,496) (470,929) (3,458,391)
Financing activities
Net borrowings from related parties - (9,051) -
Issuance of common stock, net of expenses - 14,000 4,103,005
Proceeds from merger with Starlight Acquisitions, Inc. - - 100,000
----------- ---------- -----------
Net cash provided by financing activities - 4,949 4,203,005
----------- ---------- -----------
Net increase (decrease) in cash (499,019) (1,167,399) 5,776
Cash at beginning of period 504,795 2,031,045 -
----------- ---------- -----------
Cash at end of period $ 5,776 $ 863,646 $ 5,776
=========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
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Toucan Gold Corporation
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
NOTE A - BASIS OF PRESENTATION
Organization
------------
The consolidated financial statements contained herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, all adjustments necessary
for a fair presentation of the consolidated financial position as of
September 30, 1998, and the consolidated results of operations for the three
(3) months and nine (9) months ended September 1998 and 1997, and the
consolidated cash flows for the nine (9) months ended September 30, 1998
have been made. In addition, all such adjustments made, in the opinion of
management, are of a normal recurring nature. The results of operations for
the periods presented are not necessarily indicative of the results to be
expected for the full fiscal year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the interim reporting
rules of the Securities and Exchange Commission. The interim consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements and related notes for the year ended
December 31, 1997, included in the Company's 1997 Annual Report on Form
10-KSB.
NOTE B - COMMITMENT
Under an agreement with a Brazilian individual, the Company is committed to
acquire 10 additional priority claims upon clearance of title by the DNPM.
The consideration for each claim will be $36,000 in cash and 12,000 shares
of common stock. In addition, a bonus payment of 50,000 shares is due to the
seller if all 10 claims are delivered to the Company.
NOTE C - COMMITMENT TO ISSUE COMMON STOCK
In connection with the acquisition of certain claims, the Company incurred
obligations to issue a total of 325,333 shares of common stock. At September
30, 1998, these shares have not been issued. However, the shares have been
reflected as outstanding in the accompanying balance sheets and in the
calculation of weighted average shares outstanding for the three and nine
month periods ended September 30, 1998.
F-6
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Effective May 10, 1996, Starlight Acquisitions, Inc., a Colorado
corporation ("Starlight") acquired all of the outstanding capital stock of
Toucan Mining Limited, an exploration stage company incorporated under the laws
of the Isle of Man (British Isles) ("Toucan Mining") in exchange for shares of
Starlight Common Stock (the "Share Exchange"). As a result of the Share
Exchange, a change in control of Starlight occurred, whereby Toucan Mining is
deemed to have acquired Starlight. See "Notes to the Consolidated Financial
Statements."
Toucan Mining is a development stage company that conducts its
operations primarily through its wholly-owned subsidiary, Mineradora de Bauxita
Ltda. ("MBL"), which is an authorized mining company organized under the laws of
Brazil. MBL has been financed entirely by Toucan (as hereinafter defined) for
the purpose of conducting mineral exploration, specifically gold exploration.
During July 1996, Starlight formed Toucan Gold Corporation, a Delaware
corporation ("Toucan" or the "Company"), as a wholly-owned subsidiary. On July
29, 1996, Starlight merged into the Company, and pursuant to the terms of the
merger, the outstanding shares of Starlight Common Stock were canceled in
exchange for shares of the Company's Common Stock.
The consolidated financial statements for the fiscal year ended
December 31, 1997, reflect the results of Toucan's operations, which consisted
of opening and operating a Brazilian exploration office, completion of a 5,000
meter reverse circulation drilling program, maintenance of Toucan Mining and
MBL's various claims and purchase of new claims which were capitalized in the
financial statements. Legal, accounting, investor relations, consulting, travel,
and other general administrative costs were expensed.
The Company has begun a program of mineral exploration to target and
explore selected areas of its mining claims to determine which areas are most
likely to contain economic gold mineralization or to effectuate this program
through joint ventures. In order to facilitate these activities, the Company, in
March 1997, opened an office in Brazil. The Brazilian office is staffed by six
employees and consultants, consisting of geologists, land acquisition personnel,
mapping specialists and various support personnel.
The Company has completed a 5,000 meter reverse circulation drilling
program involving six separate locations in the Cuiaba District on which
artisanal mine works ("nugget patches") have taken place. The Company believes
that these nugget patches are de facto geochemical anomalies reflecting the
possible presence of disseminated gold mineralization in the subsurface. A total
of 73 holes were drilled to an average depth of 69 and sampled at one-meter
intervals. In addition to intersecting variable quantities of "visible gold" at
all six of the localities tested, drilling has revealed the presence of
metasediments which imbedded with metavolcanic rocks of Proterozoic age. Samples
weighing approximately 25 kg. were split, and approximately 3 kg. from each
sample were sent for assay testing at two well-known Canadian laboratories.
The Company's drilling program was designed to penetrate the upper
saprolite and geochemically sample lower saprolitic material. Management
expected any gold mineralization in the lower saprolite to be finer grained,
more homogeneous and reliably sampled by reverse circulation drilling. However,
the assay reports reflected a wide variation of results. Because such results
can occur when sampling "coarse gold" mineralization, management conducted
additional testing of the samples utilizing a commonly practiced manual
inspection technique, which revealed the presence of "visible gold" in some of
the samples, many of which had appeared, on the basis of the prior assay, to
have negligible gold content. Based on such testing, management believes that
the weathering of the saprolite extends deeper into the surface than was
originally estimated and that its drilling did not sample the lower saprolite.
Because of the indication of coarse gold mineralization, management concluded
that it could not rely upon the individual values obtained in the original
assay. Accordingly, management resubmitted 132 larger samples containing
"visible gold" for re-assaying to one of the Canadian laboratories that tested
the original samples in order to use such laboratory's special method of sample
preparation suited for the detection and measurement of coarse gold
mineralization. Most of the later assayed samples were found to contain
consistently higher gold content than the previously assayed samples. Management
believes that almost all of the drilling to date has intersected fringe-type
mineralization of the type often found near stronger potential economic
mineralization.
3
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Management is encouraged by the results of the overall geochemical
testing program and believes that the new sample collection and processing
method will more accurately reflect the level and grade of gold mineralization
present in the upper saprolite. Accordingly, subject to raising additional
capital, the Company has planned a detailed program on the six previously
mentioned locations and their adjacent areas of advanced technology soil
geochemistry testing and detailed ground geophysics using electric and magnetic
methods. The program will also cover further geological mapping of the remaining
nugget patches. More reverse circulation drilling on all of these areas (testing
appropriately larger samples) is expected to follow. This program is expected to
take fourteen (14) months and is designed to establish whether there are
potential orebodies in the upper saprolite in these areas. This program could
involve joint ventures and other arrangements that may result in a dilution of
the Company's interest in its mining claims.
Subject to the Company's ability to raise additional capital,
additional regional exploration, to be carried out concurrently with the
detailed "nugget patch" exploration, is planned and will be aimed at identifying
the mineralization potential of all MBL claims in order to discard those without
any potential. This is to be carried out by revision of all geologic information
and supported by Landsat Thematic Mapper, extensive field work, and a regional
airborne geophysical survey over the area of highest potential.
However, the program to fully explore and develop its entire claim area
will take several years and require the raising of additional capital, which
could involve joint ventures or other arrangements that may result in a dilution
of the Company's interest in its claims. In the event of encouraging results in
a particular area, a more concentrated study will be undertaken to provide the
basis of a feasibility study for mineral development. MBL will also be working
to acquire additional claims in the Cuiaba Basin and will cease to explore those
claims that appear to have little or no scope for gold mineralization or will
not be useful for operational infrastructure.
As part of the process described above, during the three month period
ended September 30, 1998, the Company's activities in Brazil consisted of
continuing its review of its extensive claim area to determine which claims that
management believes should be abandoned. To date, the Company has abandoned
eight-five (85) claims, which leaves the Company with approximately 600,000
hectares of claims. Currently, the Company is not contemplating further
abandonment of claims in the near future; however, it may do so in light of
further exploration activities. No significant exploration has been performed on
any of the abandoned claims. For the nine months ended September 30, 1998, the
Company has incurred an expense of $312,875 related to such abandoned claims.
See "Financial Statements--Consolidated Statements of Operations for the nine
months ended September 30 (unaudited)."
The Company will incur major expenses to establish the existence of
gold reserves. Accordingly, to fund the Company's exploration program through
the next calendar year and to pay for normal expenses during that period, the
Company believes that it will need to raise approximately $2 million or enter
into joint ventures with industry partners who agree to provide such funds. The
amount does not include any expenditures for lease acquisitions. There can be no
assurance that the Company will be able to raise such capital if needed or on
terms that are favorable to the Company or to enter into such joint ventures on
terms favorable to the Company. The Company is currently involved in active
negotiations in these matters. The plan will be subject to review depending upon
the results obtained. Costs could rise if, among other things, the weather
proves atypically harsh, unforeseen ground conditions are encountered, equipment
becomes difficult to source, the availability of drilling operators becomes
increasingly scarce and their rates increase accordingly, or negotiations with
surface owners become prolonged. MBL may spend more or less on claim
acquisitions than currently estimated. There can be no assurance that the
exploration program will result in the discovery of economic gold
mineralization. The Company's financial statements have been prepared assuming
that the Company will continue as a going concern. Furthermore, the
recoverability of the cost of mineral rights is dependent on the Company's
ability to continue exploration, establish the existence of economically
recoverable reserves, develop these reserves, and achieve profitable production
or obtain sufficient proceeds from the disposition of the rights. The Company's
financial statements do not include any adjustments that might result from the
outcome of these uncertainties. The matters discussed herein contain
forward-looking statements that involve certain risks, uncertainties and
additional costs detailed herein. The actual results that are achieved may
differ materially from any forward-looking projections, due to such risks,
uncertainties and additional costs.
4
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The Company has raised approximately $3.6 million in net proceeds
through the issuance of 1,600,000 Units at $2.50 per Unit, each Unit consisting
of one share of Company Common Stock and a warrant to purchase a share of
Company Common Stock at an exercise price of $3.50, in an offering exempt from
registration under the Securities Act pursuant to Regulation S. This offering
was completed on November 1, 1996. The expiration date for such warrants was set
at the close of business on October 31, 1997, subject to adjustment in
connection with certain anti-dilution provisions. On October 31, 1997, the
expiration date for the warrants was extended by the Company from October 31,
1997 to January 31, 1998. The warrants have expired by their terms.
The Company has used certain of the proceeds from the sale of the Units
to finance the purchase of additional mining claims in the Cuiaba Basin, to
begin its exploration program, and for general working capital purposes. The
Company has entered into an agreement to acquire up to 25 claims in the Cuiaba
Basin. Under this agreement, the Company is committed to acquire 10 additional
priority claims upon clearance of title by the DNPM. The consideration for each
claim will be $36,000 in cash and 12,000 shares of common stock. In addition, a
bonus payment of 50,000 shares is due to the seller if all 10 claims are
delivered to the Company. The Company's obligations thereunder are subject to
its review of documentation relating to such claims. There can be no assurance
that the acquisition of the remaining claims will be consummated.
In order to finance the Company's exploration activities and general
working capital needs, including maintaining its Brazilian office and paying the
personnel of the Brazilian office, the Company will require additional capital.
The Company is addressing the additional capital requirement by exploring
several strategic alternatives that may involve any one or a combination of a
joint venture or sale of part of all of its exploration assets, further capital
raising, merger, restructuring or other business arrangement. The Company is
currently in active negotiations related to these strategic alternatives, but
has reached no definitive agreements with respect to such strategic
alternatives. The Company is currently funding its day-to-day operations with a
demand loan from Zalcany Limited ("Zalcany"), a company affiliated with Roy G.
Williams, while it continues to seek additional financing. The loan from Zalcany
bears interest at the annual rate of 10% and is unsecured. As of November 11,
1998, the principal amount of the loan was $350,796 and is to be repaid from the
proceeds of any additional financing. Although Zalcany continues to provide
additional short term financing on the same basis, it is not obligated to do so.
As of November 11, 1998, Robert Jeffcock, Igor Mousasticoshvily, Sr.
and Robert Pearce had advanced the Company $117,373, $112,000 and $39,450,
respectively, by providing cash advances to the Company and foregoing
compensation and/or fees owed to them by the Company. Of the amount owing to
Igor Mousasticoshvily, Sr., the equivalent in Brazilian Reals of $48,000 bears
interest at the annual rate of 24%.
Certain of the information contained in this Annual Report on Form
10-QSB constitutes forward looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended, that involves certain risks, uncertainties and additional costs
described herein. The actual results that are achieved may differ materially
from any forward looking projections, due to such risks, uncertainties and
additional costs. Although the Company believes that the expectations reflected
in such forward looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved. Subsequent written and
oral forward looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by reference to such risks,
uncertainties and additional costs.
5
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
(a) None
(b) None
(c) None
Item 3. Default Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
During the three month period ended September 30, 1998, the Company's
activities in Brazil consisted of continuing its review of its extensive claim
area to determine which claims that management believes should be abandoned on
the basis that as such claims either have little or no scope for gold
mineralization or will not be useful for operational infrastructure. To date,
the Company has abandoned eighty-five (85) claims, which leaves the Company with
approximately 600,000 hectares of claims. Currently, the Company is not
contemplating further abandonment of claims in the near future; however, it may
do so in light of further exploration activities. No significant exploration has
been performed on any of the abandoned claims. For the nine months ended
September 30, 1998, the Company has incurred an expense of $312,875 related to
the abandoned claims. See "Financial Statements-Consolidated Statements of
Operations for the nine months ended September 30 (unaudited)."
Item 6. Exhibits and Reports on Form 8-K.
EXHIBITS
The following exhibit is furnished in accordance with Item 601 of Regulation
S-B.
27* Financial Data Schedule
- - ------------------
* filed herewith
Form 8-K: No reports on Form 8-K have been filed with the
Securities and Exchange Commission in the quarter ended
September 30, 1998.
6
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Quarterly Report to be signed on its behalf
by the undersigned thereunto duly authorized.
TOUCAN GOLD CORPORATION
(Registrant)
Date: November 16, 1998 By: /s/ Robert P. Jeffcock
-----------------------
Robert P. Jeffcock, President and Chief
Executive Officer (Principal Executive Officer)
Date: November 16, 1998 By: /s/ Robert A. Pearce
------------------------
Robert A. Pearce, Chief Financial Officer
(Principal Financial Officer and Chief
Accounting Officer)
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Sheet for Toucan Gold Corporation
</LEGEND>
<CIK> 0000850083
<NAME> Toucan Gold Corporation
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 5,776
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,591
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,482,125
<CURRENT-LIABILITIES> 759,184
<BONDS> 0
0
0
<COMMON> 80,399
<OTHER-SE> 4,488,606
<TOTAL-LIABILITY-AND-EQUITY> 3,482,125
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 384,093
<OTHER-EXPENSES> 9,659
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,659
<INCOME-PRETAX> (393,752)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (393,752)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
