UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number: 0-18271
-------
MAGELLAN TECHNOLOGY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Utah 87-0467614
----------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
13526 South 110 West
Draper, Utah 84020
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801)495-2211
-------------
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 and 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
----- ----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date:
Outstanding at
Class March 31, 1998
----- ---------------
Common Stock, $.0002 par value 15,557,600 shares
<PAGE>
FORM 10-QSB
Financial Statements and Schedules
Magellan Technology, Inc.
For the Quarter Ended March 31, 1998
The following financial statements and schedules of the
registrant and its consolidated subsidiaries are submitted herewith:
Part I - Financial Information
-------------------------------
Item 1. Financial Statements
Condensed consolidated balance sheet
for March 31, 1998 and year-end
for December 31, 1997 2
Condensed consolidated statement of
operations for the three months
ended March 31, 1998 and 1997 4
Condensed consolidated statement of cash flows for
the three months ended March 31, 1998 and 1997 5
Notes to condensed consolidated
financial statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 5. Other information 10
Item 6(a) Exhibits 10
Item 6(b) Reports on Form 8-K 10
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
ASSETS March 31,1998 Dec. 31 1997
(Unaudited) (Audited)
--------------- ---------------
Current Assets:
Cash $ 141,465 $ 111,402
Other Current Assets 837,352 570,808
Current Assets 978,817 682,210
Property and Equipment, net 452,850 336,421
Net Asset in Discontinued
Operations 1,324,829 1,325,027
Goodwill,net 327,685 344,039
------------------ ---------------
Total Assets 3,084,181 2,687,697
================== ===============
2
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
LIABILITIES AND STOCKHOLDERS' EQUITY March 31,1998 Dec. 31, 1997
(Unaudited) (Audited)
------------- -----------
Current Liabilities:
Current Portion of long-term debt $ 181,564 $ 173,537
Notes Payable 2,734,918 2,210,022
Related Party Notes Payable 400,000 750,000
Accounts Payable 407,900 478,702
Accrued Liabilities 181,746 206,749
------------ -----------
Current Liabilities 3,906,128 3,819,010
Long-Term Debt 526,621 591,717
------------ -----------
Total Liabilities 4,432,749 4,410,727
------------ -----------
Stockholders' Equity:
Common Stock, par value $.0002 per share;
25,000,000 shares authorized,
15,557,600 & 13,620,838 shares issued
and outstanding at March 31, 1998 and
December 31, respectively 3,111 2,774
Additional Paid-in Capital 8,086,633 6,890,419
Unearned Compensation (209,717) (236,000)
Retained Deficit (9,228,595) (8,380,223)
----------- ------------
Total Stockholders' Equity (1,348,568) (1,723,030)
----------- ------------
Total Liabilities and Stockholders'
Equity $ 3,084,181 $ 2,687,697
=========== ============
3
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operation
(Unaudited)
Three Months Ended
March 31,
--------------------------------
1998 1997
-------------- -------------
Revenue from Sales: $ 242,617 $ -
Cost of Sales: 46,719 -
--------------- --------------
Gross Margin: 195,898 -
--------------- --------------
Operating Expenses:
Selling, General and Administrative 567,347 226,708
Depreciation & Amortization 36,642 3,356
Compensation Expense-Stock Options 26,283
R & D Expenses 320,657 137,024
---------------- ---------------
Total Operating Expenses 950,929 367,088
---------------- ---------------
Income(Loss) from Operations: (755,031) (367,088)
Other Income (Expense):
Loss from Discontinued Operations (198) (44,687)
Interest Expense (93,145) (17,070)
Other, net - 752
----------------- ----------------
Net Income (Loss) $ (848,374) $ (428,093)
----------------- ----------------
----------------- ----------------
Net Income (Loss) per share $ (0.06) $ (0.03)
----------------- ----------------
----------------- ----------------
Weighted average shares outstanding 14,434,203 13,620,838
================= ================
4
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
------------------------------
Cash Flows from Operating Activities: 1998 1997
-------------- ------------
Net Income (Loss) $ (848,374) $ (428,093)
Adjustments to Reconcile Net Income (Loss)
to Net CAsh used in Operating Activities:
Depreciation & Amortization 36,644 3,356
Loss From Discontinued Operations 198 44,687
Stock Compensation 26,283
(Increase) Decrease in:
Accounts Receivable (12,950)
Other Current Assets (253,594) (76,791)
Increase (Decrease) in:
Accounts Payable (70,802) 18,161
Accrued Liabilities (25,003) 11,910
Deferred Revenue - -
--------------- ------------
Net Cash used in Operating Activities (1,147,598) (426,770)
--------------- -----------
Cash Flows from Investing Activities:
Purchase of Machinery and Equipment (136,717) (9,710)
---------------- -----------
Net Cash used in Investing Activities (136,717) (9,710)
---------------- -----------
Cash Flows from Financing Activities:
Net Proceeds from Notes Payable,
Related Party Notes Payable
and Long-Term Debt 509,000 375,000
Reduction of Long-Term Debt (391,173) (6,244)
Proceeds from Issuance of Common Stock 1,196,551
(Conversion of Debt to Common Stock) ---------------- ----------
Net Cash Provided by Financing
Activities: 1,314,378 368,756
---------------- -----------
Net Increase (Decrease) in cash 30,063 (67,724)
Cash, Beginning of Period 111,402 88,687
---------------- -----------
Cash, End of Period $ 141,465 $ 20,963
================ ===========
5
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
------------------------------
1998 1997
-------------- ------------
Cash paid during the period for:
Interest $ 59,497 $ 13,806
============== ============
Income Taxes $ 500 $ -
============== ============
6
<PAGE>
MAGELLAN TECHNOLOGY, INC.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(1) The unaudited condensed consolidated financial
statements include the accounts of Magellan Technology,
Inc. (The Company) and its wholly owned subsidiaries,
ProHealth, Inc. (formerly known as Satellite Image
Systems, Inc. (SIS, Inc.)) and SIS Jamaica, LTD (SIS
Jamaica), SkyHook Technologies, Inc. (SkyHook), which
the Company acquired effective October 15, 1996, and
BioMeridian International, Inc. (BioMeridian) (formerly
BioSource, Inc.) which the Company acquired effective
October 15, 1997. The acquisition of SkyHook included
the issuance of 4,874,936 shares of Magellan common
stock and cash for all of the outstanding shares of
SkyHook common stock. The transaction was accounted
for as a purchase transaction. The acquisition of
BioSource included the issuance of 225,000 shares of
Magellan common stock and cash for all of the
outstanding shares of BioSource common stock. The
transaction was accounted for as a purchase
transaction. The Company recognized goodwill of
$358,997. On August 1, 1996 the Company transferred
its interest in the assets, liabilities, and operations
conducted by SIS, Inc. to Satellite Image Systems, LLC
(SIS, LLC), a joint venture. As of March 31, 1998 the
Company was the owner of a 46.5% interest in SIS, LLC.
The financial statements reflect the investment in SIS,
LLC under the equity method of accounting.
(2) The unaudited condensed consolidated financial
statements include all adjustments (consisting of
normal recurring items) which are, in the opinion of
management, necessary to present fairly the financial
position as of March 31, 1998 and the results of
operations for the three months ended March 31, 1998
and 1997 and cash flows for the three months ended
March 31, 1998 and 1997. The results of operations for
the three months ended March 31, 1998 are not
necessarily indicative of the results to be expected
for the entire year.
(3) (Loss) per share is based on the weighted average
number of shares outstanding at March 31, 1998 and 1997,
respectively.
(4) During the three months ended March 31, 1998, the
Company borrowed $10,000 under a line-of-credit agreements.
The Company also borrowed $499,000 under a term credit
agreement. The funds from each of these agreements were
used to finance operations. As of March 31, 1998 the
company had the following outstanding balances payable under
credit agreements; 745,000 due April 15, 1998, $750,000 due
July 20, 1998 and $1,199,000 due May 19, 1998. Each of
these credit agreements are secured by inventory and the
personal guarantees of the Company's Chief Executive
Officer, a Director, and a major shareholder. Notes
payable at March 31, 1998 also include a small line of
credit for approximately $25,000 and a note payable to an
individual for approximately $15,000.
(5) During the three months ended March 31, 1998 the
Company borrowed $800,000 from the Company's Chief Executive
Officer, or from entities controlled by this individual,
under five separate $100,000 unsecured note payable
agreements and under two separate $150,000 unsecured note
payable agreements. Each note payable bears interest at 12%
and is payable upon demand. The funds were used to finance
operations.
(6) Effective February 27, 1998 $1,150,000 of related party
notes payable were converted to common stock of the
Company. In addition, interest payable of approximately
$46,500 was used by the individuals to exercise warrants to
purchase common stock.
(7) Subsequent Event. Effective May 12, 1998 the Company
entered into an agreement to sell its 46.5% interest in SIS,
LLC. Terms of the agreement include an initial payment of
$1,500,000 and additional payments not to exceed $1,000,000
that will be earned over the next 27 months based upon the
operating results of SIS, LLC. The Company intends to use
the funds for working capital and debt reduction.
7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2 - Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
-----------------------------------
Operations for the three months ended March 31, 1998
Results of SkyHook
During the three months ended March 31, 1998 the Company
continued to aggressively pursue development and marketing
of the SkyHook External Cargo Management System (SkyHook
ECMS). The Company also continued to improve the SkyHook
Light Ariel Delivery System (SkyHook LADS). This new lower
cost system is designed to carry three or four separate
loads with total system load capacity of 12,000 pounds. The
SkyHook LADS compliments the SkyHook ECMS which is designed
to carry three or six separate loads with a total system
capacity of 36,000 pounds. With the introduction of the
LADS system to compliment the ECMS product, the company can
effectively meet the varying needs of its customers. Both
the SkyHook ECMS and SkyHook LADS were tested and
demonstrated with potential customers. Marketing and sales
professionals have participated in several trade shows and
other marketing activities. These activities included
demonstrations of the product and visits to potential
customers. Both products have received favorable reviews in
industry publications. Notwithstanding these continued
favorable preliminary results, there is no assurance that
marketing of the SkyHook CMS or the SkyHook LADS will be
successful.
Results of BioMeridian
For the three months ended March 31, 1998 BioMeridian
achieved sales of $242,617 which resulted in an operating
loss of $132,864. BioMeridan continues to focus its efforts
on enhancing domestic and international distribution
channels for its Computerized Electro-Dermal Screening
(CEDS) products. Management of BioMeridian believes that
the company is being well positioned to experience
significant growth in the alternative health care
marketplace. On May 6, 1998 the Company announced that it
has entered into an agreement to acquire Digital Health,
LLC, a competitor to BioMeridian in the CEDS marketplace.
The combined companies will pool their resources and
expertise to maintain leadership through technological
advantages and superior distribution channels.
Results of SIS, LLC
Since the formation of SIS, LLC, the Company has accounted
for the earnings and transactions of SIS, LLC under the
equity method of accounting. For the three months ended
March 31, 1998 the Company's books reflect a net loss of
$198, its 46.5% share of the income of SIS, LLC for the
Quarter based upon revenues of $1,188,000. These results
compare favorably with the three month period ended March
31, 1997 during which time period the Company record a loss
of $44,687 for its 49% ownership of SIS, LLC on total
revenues of $772,172.
Liquidity and Capital Resources
During the three months ended March 31, 1998, the Company
borrowed $10,000 under a line-of-credit agreements. The
Company also borrowed $499,000 under a term credit
agreement. The funds from each of these agreements were
used to finance operations. As of March 31, 1998 the
company had the following outstanding balances payable under
credit agreement; 745,000 due April 15, 1998, $750,000 due
July 20, 1998 and $1,199,000 due May 19, 1998. Each of
these credit agreements are secured by inventory and the
personal guarantees of the Company's Chief Executive
Officer, a Director, and a major shareholder.
8
<PAGE>
During the three months ended March 31, 1998 the Company
borrowed $800,000 from the Company's Chief Executive Officer
or from entities controlled by this individual, under five
separate $100,000 unsecured note payable agreements and
under two separate $150,000 unsecured note payable
agreements. Each note payable bears interest at 12% and is
payable upon demand. The funds were used to finance
operations.
Effective February 27, 1998 $1,150,000 of related party
notes payable were converted to common stock of the
Company. In addition, the interest payable of approximately
$46,500 was used by the individuals to exercise warrants to
purchase common stock.
SkyHook Technologies, Inc. is still in the development stage
and is not expected to generate any revenue through sales of
products or services until the third quarter of 1998. As a
result, the Company must rely solely on its lines-of-credit
and its ability to raise additional debt and equity
financing in order to finance continued product development,
sales and marketing, and all operating activities related to
the SkyHook CMS and the SkyHook LADS. On-going operations
of the Company are currently consuming approximately
$195,000 of cash each month and the Company expects to
continue to incur substantial additional expenses in
connection with the finalization of the development of the
SkyHook product lines and their introduction into the market
place. BioMeridian has also experience operating losses
duringthe three month period ended March 31, 1998. The
Company is forecasting profitable operations for BioMeridian
as of the third quarter 1998. There can be no assurance
that the Company will be able to obtain needed financing on
terms favorable to the Company. If the company is unable to
raise additional capital, the ability of the Company to
successfully market and distribute the SkyHook CMS and its
financial condition would be materially adversely affected.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings: None.
Item 2. Changes in Securities: None.
Item 3. Defaults upon Senior Securities: None.
Item 4. Submission of Matters to a Vote of Security Holders: None.
Item 5. Other information:
On May 6, 1998 the Company signed a Letter of Intent to
acquire Digital Health of Draper, Utah. Digital Health is
an international leader in Computerized Electro-Dermal
Screening (CEDS), a revolutionary computer-based technology
used to assist healthcare practitioners to screen a broad
range of health disorders.
On May 12, 1998 the Company entered into an agreement to
sell its 46.5% interest SIS, LLC. Terms of the agreement
include a $1,500,000 initial payment and additional payments
not to exceed $1,000,000 that will be earned over the next
27 months based upon the performance of SIS, LLC. The
Company intends to use the funds for working capital and
debt reduction.
Item 6. Exhibits and Reports on Form 8-K:
(a) Sale Purchase Agreement
(b) None.
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange
Act, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MAGELLAN TECHNOLOGY, INC.
-------------------------
(Registrant)
/s/ Douglas M. Angus May 14, 1997
___________________________ --------------
Douglas M. Angus Date
Vice President - Finance
EXHIBIT 6 (a)
SALES AND PURCHASE AGREEMENT
THIS AGREEMENT is entered into this ___ day of _______,
1998, by and between MAGELLAN TECHNOLOGIES , INC.
("Magellan"), a Utah corporation (the "Seller"), and
INSURDATA INCORPORATED (" Insurdata"), a Texas corporation
(the "Purchaser") for the purpose of Purchaser aquiring
Seller's membership interest in SATELLITE IMAGE SYSTEMS,
LLC, a Texas limited liability company (the "LLC").
WHEREAS, Magellan became a 49% owner of the entity now
known as Satellite Image Systems, LLC, in a certain
transaction styled "Agreement between Magellan Technologies,
Inc. and UICI regarding Satelite Image Systems, Inc.",
effective August 1, 1996 , in which Magellan agreed to
award a total of 5% ownership of LLC to certain key managers
in equal amounts over two years on each August 1, being
August 1, 1997 and August 1, 1998. Magellan agrees to, and
hereby does, advance the August 1, 1998 award date to May 1,
1998 so that the key managers will have been awarded a total
of 5% ownership of LLC as of the effective date of the Sale
and Purchase Agreement; and
WHEREAS, following such accelerated award to key
managers, Magellan is the owner and holder of a forty-four
percent (44%) membership interest in the LLC; and
WHEREAS, Insurdata is the owner and holder of a fifty-
one percent (51%) membership interest in the LLC; and
WHEREAS, the Purchaser desires to purchase from the
Seller and the Seller is willing to sell to the Purchaser
its equity interest in the LLC;
NOW, THEREFORE, for and in consideration of the above
recitals, which are incorporated herein, and the mutual
covenants and agreements hereinafter set forth, the parties
hereto hereby agree as follows:
1. Seller hereby sells, conveys, and assigns to
Purchaser, subject to the terms of this Agreement, its forty-
four percent (44%)membership interest in the LLC.
The purchase price shall be paid in part in cash at closing
and in part by quarterly "Earn-out" payments based upon the
LLC's earnings results for the years 1998, 1999 and the
first two quarters of 2000, as follows:
a)Simultaneously with the execution of this Agreement,
Purchaser shall pay to Sellar, by wire transfer, the sum of
One Million Five Hundred Thousand Dollars ($ 1,500,000).
b)Quarterly "Earn-out" payments shall be made based upon
LLC's results for the years 1998, 1999 an dthe first two
quarters of 2000. Each payment is calculated as 50% of
Profits Before Tax (PBT), subject to a cumulative ceiling of
$ 1,000,000. The parties agree that for the first quarter
of 1998, LLC broke even, and that no Earn-out payment is due
to Seller.
<PAGE>
c)Fifty percent of each earn-out payment shall be paid to
Seller in cash. The other fifty of each Earn-out payment
shall be applied to the principal balances of the two notes
payable from Magellan to LLC. The first not is a promissory
note in the amount of $150,000 dated September 5, 1996 and
the second note is a promissory note in the amount of $
350,000 dated October 3, 1996.
d)Earn-out payments shall be made to Seller and applied
to the note within 30 days of the close of each quarter.
e)Magellan would only be required to make principal
payments in cash if the cumulative Earn-out at any point in
time is less than the normal amortization of the notes on a
monthly principal payment due date. After the end of the
Earn-out period , any remaining principal will be paid by
Magellan in accordance with the normal terms of the notes.
Interest payents on the notes will be make as scheduled
based upon the outstanding principal at the time so long as
a balance exists.
2. Seller hereby assigns to Purchaser any right,
title of interest it has as a Member with regard to the
business, property and rights of the LLC, including the
right of its officers, directors, employees, agents or
appointees to serve as members of the "Managing Board" of
LLC. Seller agrees to deliver resignations of all of its
designated or appointed members of the Managing Board at the
time and place of execution of this Agreement or within
three business days thereafter and, if such resignations
cannot be obtained within such a time, then Purchaser may
remove and replace such members as provided for in the
Regulations of the LLC.
3. Purchaser hereby agrees to assume sole
responsibility for any leases, contracts, obligations or
expenses of the LLC.
4. The Seller hereby warrants and represents that it
is the sole owner of and has the sole right to sell,
transfer, and assign its membership interest in the LLC to
Purchaser as set forth in this Agreement and that said
interest is free of any liens or encumbrances. The
execution, delivery and performance of this Agreement have
been duly authorized and approved as may be required as may
be required of Seller and constitutes a valid and binding
agreement of Seller in accordance with its terms.
5. Purchaser represents and acknowledges that it
entered into this Agreement on the basis of its own
examination, personal knowledge and opinion of the value of
the business. Purchaser has not relied on any
representations, warranties or statements made by Seller,
other than those contained in this Agreement .
<PAGE>
6. If at any time during the terms of this Agreement
any dispute, difference, or disagreement shall arise upon or
in respect of the Agreement, and the meaning and
construction thereof , every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed
upon by the parties, or if no single arbiter can be agreed
upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration
Association, and such dispute, difference, or disagreement
shall be settled by arbitration in accordance with the then
prevailing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction
thereof.
7. Each party (the "Indemnifying Party") agrees to
indemnify and hold harmless the other party from and against
any and all losses, claims, demands, liabilities, costs,
damages, and expenses (including reasonable attorney's fees)
arising out of out our caused by the Indemnifying Party's
negligence, breach of this Agreement or misconduct by it,
its employees, or its authorized representatives in the
performance of its obligations under this Agreement.
8. This Agreement contains the entire contract and
supersedes any and all other agreements, oral or written,
between the parties hereto with respect to the subject
matter hereof and contains all of the covenants and
agreements between the parties with respect to such matters.
However, nothing contained herein shall supersede, replace
or modify the terms of any contracts of agreements between
the LLC an dSeller or any affiliate of Seller entered into
prior to the date of the Agreement.
9. This Agreement may not be modified, changed, or
amended in any respect unless agreed upon in writing and
signed by the parties hereto.
10. This Agreement shall be governed by and construed
in accordance with the laws of the State if Texas.
11. This Agreement may be executed in several
counterparts, each of which shall have the same force and
effect of an original.
12. This Agreement shall be binding upon and inure to
the benefit of the parties, their successors, assigns and
legal representatives.
13. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from
all such action as may be necessary or appropriate to
achieve the purposes of the Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written, but
effective as of May 1, 1998.
SELLER:
MAGELLAN TECHNOLOGIES INC.
By: /s/ William A. Fresh
------------------------------------
William A. Fresh, President and CEO
PURCHASER:
INSURDATA INCORPORATED
By: /s/ Dennis B. Maloney
------------------------------------
Dennis B. Maloney,President & CEO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MAGELLAN
TECHNOLOGY, INC. MARCH 31, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 141,465
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 837,352
<PP&E> 531,021
<DEPRECIATION> 78,171
<TOTAL-ASSETS> 3,084,181
<CURRENT-LIABILITIES> 3,906,128
<BONDS> 526,621
0
0
<COMMON> 3,111
<OTHER-SE> (1,351,679)
<TOTAL-LIABILITY-AND-EQUITY> 3,084,181
<SALES> 242,617
<TOTAL-REVENUES> 242,617
<CGS> 46,719
<TOTAL-COSTS> 997,648
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 93,145
<INCOME-PRETAX> (848,374)
<INCOME-TAX> 0
<INCOME-CONTINUING> (848,176)
<DISCONTINUED> (198)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (848,374)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
