FORM 10-QSB
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________ to ____________
Commission File Number: 0-18344
---------------
SOONER HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Oklahoma 73-1275261
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2680 W. I-40, Oklahoma City, OK 73108
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (405) 236-8332
--------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES NO X
--------- ----------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
YES NO
--------- ----------
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 6,412,528 shares of
common stock as of August 12, 1996.
<PAGE>
SOONER HOLDINGS, INC.
Form 10-QSB for the quarter ended June 30, 1996
- --------------------------------------------------------------------------------
TABLE OF CONTENTS AND INFORMATION REQUIRED IN REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Part 1. Financial information
<S> <C>
Page
Item 1. Financial Statements (unaudited): ----
Consolidated Balance Sheet as of June 30, 1996 3
Consolidated Statements of Operations for the quarters and
six months ended June 30, 1996 and June 30, 1995 4
Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and June 30, 1995 5
Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operation 10
Part II. Other information
Page
----
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES: 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SOONER HOLDINGS, INC.
Consolidated Balance Sheet
(unaudited)
<TABLE>
<CAPTION>
June 30,
1996
----------------
ASSETS
<S> <C>
Current assets:
Cash $ 7,000
Accounts receivable 3,459
Advances 9,800
Inventories, net 43,846
Prepaid expenses and deposits 759
----------------
Total current assets 64,864
Land held by trust 522,630
Other receivables (Note 4) 58,000
Property and equipment, net (Note 2) 2,464,619
Other assets, net 32,332
----------------
$3,142,445
================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 66,947
Real estate taxes payable 193,299
Accrued liabilities to related parties 297,225
Accrued liabilities 26,386
Notes payable 744,239
Net current liabilities of discontinued operations, payable to affiliates 81,547
----------------
Total current liabilities 1,409,643
----------------
Long-term debt 1,326,714
Road trust improvements payable 350,000
Commitments, contingencies and subsequent events (Note 5) -
----------------
Stockholders' equity:
Preferred stock; undesignated, authorized 10,000,000 shares, no shares
issued and outstanding -
Common stock; $.001 par value, authorized 100,000,000 shares,
6,412,528 shares issued and outstanding 6,413
Additional paid-in-capital 5,456,612
Accumulated deficit (5,406,937)
----------------
Total stockholders' equity 56,088
----------------
$ 3,142,445
================
</TABLE>
The accompanying notes are an integral part of this consolidated balance sheet.
3
<PAGE>
SOONER HOLDINGS, INC.
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the quarter ended For the six months ended
June 30, June 30,
1996 1995 1996 1995
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues $ 193,603 $ 74,813 $460,717 $ 159,718
---------------- --------------- ---------------- ---------------
Expenses:
Cost of products sold 1,063 2,554 1,648 5,119
General and administrative 55,776 61,217 156,618 115,659
Marketing and advertising - 300 500 300
Depreciation and amortization 19,654 20,763 38,558 41,525
Interest expense 55,538 62,126 114,400 117,748
---------------- --------------- ---------------- ---------------
Total expenses 132,031 146,960 311,724 280,351
---------------- --------------- ---------------- ---------------
Income (loss) from continuing operations
61,572 (72,147) 148,993 (120,633)
Loss from discontinued operations - (11,163) - (44,947)
---------------- --------------- ---------------- ---------------
Net income (loss) $ 61,572 $ (83,310) $148,993 $ (165,580)
================ =============== ================ ===============
Net income (loss) per common share:
Income (loss) from continuing operations .01 (.02) .02 (.02)
Loss from discontinued operations - * - (.01)
================ =============== ================ ===============
Net income (loss) per common share $ .01 $ (.02) $ .02 $ (.03)
================ =============== ================ ===============
Weighted average number of shares
outstanding 6,412,528 4,999,083 6,412,528 4,999,083
================ =============== ================ ===============
* less than $.01
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
SOONER HOLDINGS, INC.
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
For the six months ended
June 30,
1996 1995
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $148,993 $ (165,580)
---------------- ---------------
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Depreciation and amortization 38,641 41,525
Changes in assets and liabilities:
Accounts receivable (1,012) (5,135)
Advances (9,800) -
Inventories 791 5,785
Prepaid expenses and deposits 1,118 (474)
Bank overdraft (5,500) -
Accounts payable 30,932 18,002
Real estate taxes payable 7,658 7,825
Accrued liabilities to related parties 92,284 25,368
Accrued liabilities 3,257 890
Net liabilities of discontinued operations (545) 55,208
---------------- ---------------
Total adjustments 157,824 148,994
---------------- ---------------
Net cash used in operating activities 306,817 (16,586)
---------------- ---------------
Cash flows from investing activities:
Advances to Dynamicorp (30,000) -
Purchases of property and equipment (36,011) -
---------------- ---------------
Net cash used in investing activities (66,011) -
---------------- ---------------
Cash flows from financing activities:
Repayments of notes payable (259,046) (22,103)
Borrowings on notes payable - 3,482
Borrowings on notes payable to related parties 21,750 34,609
---------------- ---------------
Net cash provided by financing activities (237,296) 15,988
---------------- ---------------
Net increase (decrease) in cash 3,510 (598)
Cash at beginning of year 3,490 1,729
---------------- ---------------
Cash at end of period $ 7,000 $ 1,131
================ ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 95,210 $ 103,136
================ ===============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
SOONER HOLDINGS, INC.
Notes to the Consolidated Financial Statements
(Unaudited)
June 30, 1996
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and operations
- ---------------------------
Sooner Holdings, Inc., an Oklahoma corporation (the "Company"),
operates through its subsidiaries which conducts business in several industries.
Charlie O Beverages, Inc. (Beverages) is engaged in the manufacture and
distribution of an in-home soda fountain appliance and supplies for the
preparation of carbonated beverages. Charlie O Business Park Incorporated
(Business Park) is engaged in the ownership and rental of a business park in
Oklahoma City, Oklahoma. SD Properties, Inc. (SDPI) holds an interest in a trust
that owns land for resale in Coconino County, Arizona, and solicits and manages
construction activities. During 1995, the Company formed Dynamicorp
Restructuring Corp. (DRC) which acquired an ownership interest in Dynamicorp,
Inc. (see Note 4). On TV Incorporated (ONTV) was engaged in the business of
marketing consumer products until its operations were discontinued during 1995.
Basis of presentation
- ---------------------
The unaudited consolidated financial statements presented herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations for interim financial information and the instructions to Form
10-QSB and Regulation S-B. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted. These unaudited
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1995 (the "1995 Form
10-KSB"). In the opinion of management, the unaudited consolidated financial
statements reflect all adjustments (consisting of normal recurring accruals
only) which are necessary to present fairly the consolidated financial position,
results of operations, and changes in cash flow of the Company. Operating
results for interim periods are not necessarily indicative of the results which
may be expected for the entire year.
Principles of consolidation
- ---------------------------
The Company's consolidated financial statements have been prepared on
the basis of generally accepted accounting principles and include the accounts
of Sooner Holdings, Inc. and its subsidiaries. All significant intercompany
transactions have been eliminated. All of the Company's consolidated
subsidiaries are wholly owned, except for ONTV. The minority shareholders'
interest in the accounts of ONTV have not been presented in the accompanying
consolidated financial statements as the amounts are not material.
6
<PAGE>
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment at June 30, 1996 is comprised of the following:
Land $ 1,191,400
Buildings and improvements 1,439,973
Machinery 375,677
Furniture and fixtures 13,787
Tooling 172,820
-----------------
3,193,657
Less accumulated depreciation (729,038)
-----------------
Property and equipment, net $ 2,464,619
=================
A total of $1,705,903 in liabilities are secured by first, second and
third liens against the Company's property.
NOTE 3 - RELATED PARTIES
As more fully described in the 1995 Form 10-KSB, the following are
related parties:
R.C. Cunningham II ("Cunningham"), the Chairman and President of the
Company and its subsidiaries. Cunningham is also the majority shareholder of the
Company and has an incentive compensation agreement which will pay him 5% of the
Company's gross revenues.
Bulldog Investment Company, L.L.C. ("Bulldog"), a Phoenix,
Arizona-based financial and management advisory services company. The Company
has contracted with Bulldog for consulting services and Bulldog is a shareholder
of the Company. Messrs. Michael S. Williams and Lanny R. Lang, who are officers
and/or directors of the Company and its subsidiaries are principals of Bulldog.
ShareData Inc. ("ShareData"), a Phoenix, Arizona-based holding company,
owns approximately 13% of the Company. Messrs. Lang and Williams are officers of
ShareData. ShareData's Plan of Reorganization (the "Plan") was confirmed in
December 1995 (Case No. 93-13311). The Plan calls for the distribution of all of
ShareData's holdings of common stock of the Company to certain ShareData
creditors.
Wheel of Bargains, Inc. (formerly Bulldog Leasing and Financing Corp.)
("WOB"), is a Phoenix, Arizona-based company formerly specializing in leasing
and financing to higher risk companies. WOB is a subsidiary of ShareData and
Messrs. Williams and Lang are officers and directors of WOB.
7
<PAGE>
Phoenix Financial Reporting Group, Inc. ("PFRG"), is a Phoenix,
Arizona-based company specializing in financial annual report design and
publishing for public companies. PFRG is a subsidiary of ShareData. Messrs. Lang
and Williams are officers and directors of PFRG.
Talbot Investment Co. ("Talbot") is an Oklahoma City, Oklahoma-based
commercial real estate brokerage firm. Mr. David Talbot, an officer and a
director of the Company and Business Park, a subsidiary, is also the principal
agent for Talbot. Talbot handles all the property management services for
Business Park and receives normal and customary commissions and fees for
providing these services.
The following table reflects the approximate amounts of related party
obligations, which are due and payable by the Company to officers, directors,
shareholders and/or management consultants, included in their respective
captions on the balance sheet at June 30, 1996:
<TABLE>
<CAPTION>
L.T. Accounts Accrued
Debt Payable Liabilities
---- ------- -----------
<S> <C> <C> <C>
Cunningham $ 139,200 $ - $ 78,010
Bulldog 18,050 5,003 215,214
ShareData 3,000 - 22
WOB 37,250 1,224 3,979
PFRG - 14,000 -
Talbot - 150 -
---------------- ---------------- ----------------
Total related party liabilities $ 197,500 $ 20,377 $ 297,225
================ ================ ================
</TABLE>
In addition, Cunningham has personally guaranteed $1,129,215 of the
long term debt and $590,688 of notes payable.
NOTE 4 - INVESTMENT IN DYNAMICORP, INC.
During 1994, the Company had acquired 50,000 shares (less than 1%) of
the common stock of Dynamicorp, Inc. (Dyna) for $50,000. As discussed in the
1995 Form 10-KSB, Dyna filed for relief under Chapter 11. Due to the bankruptcy
filing, the Company reserved for its investment and recognized a loss of $50,000
during the year ended December 31, 1994.
During 1995, the Company formed Dynamicorp Restructuring Corp. (DRC).
The Company subsequently exchanged 8.5% of DRC's common stock for 3,605,500
shares (approximately 43%) of the common stock of Dyna. Due to the circumstances
discussed in the 1995 Form 10-KSB no value has been assigned to the Dyna stock
held by DRC.
DRC had entered into an agreement with Dyna to lend Dyna funding to
assist it in its restructuring under Chapter 11, subject to Bankruptcy Court
approval as post-petition funding. Through February 1996, the Company had
advanced $58,000 to Dyna. On February 29, 1996, the Bankruptcy Court appointed a
trustee for Dyna and Dyna was no longer a debtor-in-
8
<PAGE>
possession. Subsequently, due to the appointment of a trustee, the company
withdrew its application to the Bankruptcy Court to provide additional
post-petition lending. The Company does not expect to provide any further
funding to Dyna and the amount advanced to Dyna remains outstanding as of June
30, 1996.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company was a defendant in a lawsuit filed in fiscal 1990 by a
vendor seeking to enforce payment of amounts due plus reasonable costs. In April
1991, a judgment was entered against the Company requiring it to pay the vendor
$57,945, plus accrued interest and costs. In June 1994, Bulldog acquired this
judgment directly from the vendor and the Company is now obligated to pay
Bulldog. The judgment continues to accrue interest as stipulated in the judgment
and the amount due Bulldog, which is recorded as accrued liabilities in the
accompanying consolidated financial statements was $89,891 and $86,248 as of
June 30, 1996 and 1995, respectively.
In July 1996, the Company was sued for $90,000 under an indemnification
agreement related to certain sales which took place in 1990. The Company
believes it has no liability under this claim due to various defenses which it
intends to vigorously assert. However, such defense will likely cost the Company
legal fees and expenses which it may be unable to recover from the plaintiff.
NOTE 6 - SUBSEQUENT EVENTS
Subsequent to the quarter end, SDPI completed its major project and was
paid in full. The funds were used to reduce current liabilities.
NOTE 7 - LIQUIDITY
For the fiscal year ending December 31, 1995, the independent auditor's
report included an explanatory paragraph calling attention to a going concern
issue. The accompanying consolidated financial statements have been prepared
contemplating continuation of the Company as a "going concern." Prior to fiscal
1996, the Company sustained recurring operating losses and is expected to need
additional amounts of working capital for its operations and to pay its current
liabilities. At June 30, 1996, current liabilities exceeded current assets by
approximately $1,344,779. In view of these matters, realization of a major
portion of the assets is dependent upon continued operations of the Company,
which in turn is dependent upon the Company's ability to meet its financing
requirements and the success of its future operations. Management believes that
actions presently being taken to revise the Company's operating and financial
requirements provide the opportunity for the Company to continue as a going
concern. However, there can be no assurance management will be successful in
this endeavor.
9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Introduction
The following discussion should be read in conjunction with the
Company's financial statements and notes thereto included elsewhere in this Form
10-QSB report. In addition, the discussion of the Company's expected Plan of
Operation, included in the 1995 Form 10-KSB, is incorporated herein in its
entirety as the discussion of the Plan of Operation as required by Item 303(a)
of Regulation S-B.
Liquidity and Capital Resources - June 30, 1996 compared to June 30, 1995
The Company has had severe liquidity problems for the last several
years. The Company's liquidity is reflected in the table below, which shows
comparative working capital deficit. Working capital, or current assets less
current liabilities, is an important measure to the Company's ability to meet
its short term obligations.
<TABLE>
<CAPTION>
June 30, Dec. 31,
1996 1995 1995,
---- ---- -----
<S> <C> <C> <C>
Working capital (deficit) $(1,344,779) $(1,467,606) $ (1,482,980)
=============== =============== ================
</TABLE>
Although the Company's working capital is negative, the Company's
ability to meet its obligations has remained stable due to the financial support
from certain of the Company's related parties. The Company's current working
capital continues to be provided by Mr. R.C. Cunningham II, the Company's
Chairman of the Board and President ("Cunningham"), or by Bulldog Investment
Company, L.L.C., a Phoenix, Arizona-based merchant banking and private
investment company ("Bulldog") or by Bulldog's other affiliated companies.
Future Working capital requirements
- -----------------------------------
Beverages has sufficient inventory to allow it to increase its sales
with a minimum of additional cash. Business Park needs approximately $40,000 in
working capital to bring its real estate taxes current and cure the default on
the Oklahoma Industrial Finance Authority loan.
The only cash requirements that are not expected to be funded by
revenues are the real estate taxes payable, both current and those in arrears,
on SDPI's lots and some interest expense related to Business Park. These cash
requirements for the next 12 months are estimated to be less than $200,000.
Exclusive of funds required by debt repayment, the Company believes that it can
borrow these funds from Bulldog or Cunningham, although there can be no
assurance that such funds will be available when needed. In the event that the
Company cannot refinance, or obtain forbearance on its current liabilities or on
its long-term liabilities as they come due, the Company will undoubtedly face
further severe liquidity problems which may lead to litigation, the inability to
transact business, and/or foreclosure actions being initiated against a majority
of the Company's assets.
10
<PAGE>
In November 1995, DRC, a newly formed subsidiary of the Company,
acquired an approximate 43% equity interest in Dyna and sought to obtain
permanent control of this company (see footnote 4 to the Consolidated Financial
Statements). If the Company had gained permanent control of Dyna, it had agreed
to lend Dyna funding to assist it in its restructuring under Chapter 11, subject
to Bankruptcy Court approval as post-petition funding. Through February 1996,
the Company had advanced $58,000 to Dyna. On February 29, 1996, the Bankruptcy
Court appointed a trustee for Dyna and Dyna was no longer a
debtor-in-possession. Subsequently, due to the appointment of a trustee, the
Company withdrew its application to the Bankruptcy Court to provide additional
post-petition lending. The Company does not expect to provide any further
funding to Dyna and the amount advanced to Dyna remains outstanding as of June
30, 1996.
Results of Operations - The quarter and six months ended June 30, 1996 compared
to the quarter and six months ended June 30, 1995
Revenues increased by $118,790 (160%) and $300,999 (190%) for the
quarter and six months ended June 30, 1996 compared to the same quarter and six
month periods in 1995. This was due to the increase of SDPI revenues in both the
first and second quarters of 1996. SDPI entered into a new business in late 1995
whereby it acts as marketing representative for construction contractors to
develop business opportunities for these contractors for a fee. The Company is
evaluating methods of continuing the SDPI business. Beverages continues to have
very modest revenues. The Company is seeking new strategic partners for
Beverages to expand its marketing efforts and increase revenues. If the Company
is unable to obtain a strategic partner, it will likely exit the beverage
business.
Total expenses for the quarter and six months ended June 30, 1996 were
$132,031 and $311,724, respectively, as compared to total expenses for the
comparable 1995 periods of $146,960 and $280,351, respectively. The increase in
the 1996 expenses for the six months was due primarily to an increase in general
and administrative ("G&A") expenses. Such G&A expenses consist primarily of
professional and management fees. G&A expenses increased in the 1996 periods due
to the recognition of fees due Bulldog and Cunningham relating to their
incentive based compensation agreements.
The Company recorded net income for the quarter and six month periods
of 1996 of $61,572 and $148,993, respectively, as compared to net losses of
$(83,310) and $(165,580) for the comparable 1995 periods, respectively. The net
income in 1996 was due to the increase in revenues primarily from the SDPI
subsidiary. The Company is currently evaluating additional investments to
maintain and potentially expand the SDPI business. Without such additional
investments, the likelihood of continued expanded revenue, further revenue
growth and continued profitability are uncertain.
Capital Expenditures and Commitments
During the second quarter ending June 30, 1996, the Company had $36,000
in capital expenditures primarily for leasehold improvements at the Business
Park. The Company has no future commitments for material capital expenditures.
If the Company is to grow it will have to invest
11
<PAGE>
additional money in marketing and advertising expenses if such cash can be
obtained from vendors, related parties or the sale of debt or equity securities.
Factors that may affect future results
A number of uncertainties exist that may affect the Company's future
operating results. These include the uncertain general economic conditions,
uncertain market acceptance of the Company's products, the Company's ability to
manage its expenses at a very minimum level, the ongoing support of Bulldog and
Cunningham, the ability of the Company to refinance its long term liabilities on
satisfactory terms, if at all, and the Company's ability to acquire sufficient
funding to sustain its operations and develop new businesses.
The Company is actively seeking to sell its interest in ONTV. In the
event the Company exits the beverage business and sells the inventory, equipment
and tooling relating to this business, it is uncertain whether the Company will
be able to realize the value of these assets shown on the books.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In July 1996, the Company was sued for $90,000 under an indemnification
agreement related to certain sales which took place in 1990. The Company
believes it has no liability under this claim due to various defenses which it
intends to vigorously assert. However, such defense will likely cost the Company
legal fees and expenses which it may be unable to recover from the plaintiff.
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
1995 Annual Meeting. The Company has scheduled its 1995 Annual Meeting
for October 16, 1996 at the Company's corporate offices in Oklahoma City,
Oklahoma. A preliminary proxy statement is expected to be filed with the
Securities and Exchange Commission on or about August 15, 1996, with respect to
this Annual Meeting.
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SOONER HOLDINGS, INC.
------------------------------------------
(Registrant)
Dated: August 12, 1996
--------------------
By: /s/ R.C. Cunningham
------------------------------------------
R. C. Cunningham, Chairman and
President
By: /s/ Lanny R. Lang
------------------------------------------
Lanny R. Lang, Treasurer
(Chief Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 7,000
<SECURITIES> 0
<RECEIVABLES> 3,459
<ALLOWANCES> 0
<INVENTORY> 43,846
<CURRENT-ASSETS> 64,864
<PP&E> 3,193,657
<DEPRECIATION> 729,038
<TOTAL-ASSETS> 3,142,445
<CURRENT-LIABILITIES> 1,409,643
<BONDS> 0
0
0
<COMMON> 5,463,025
<OTHER-SE> (5,406,937)
<TOTAL-LIABILITY-AND-EQUITY> 3,142,445
<SALES> 460,717
<TOTAL-REVENUES> 460,717
<CGS> 1,648
<TOTAL-COSTS> 195,676
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 114,400
<INCOME-PRETAX> 148,993
<INCOME-TAX> 0
<INCOME-CONTINUING> 148,993
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 148,993
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
