<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period ________________ to ______________
Commission File number 1-10799
ADDVANTAGE MEDIA GROUP, INC.
(Exact name of small business issuer as specified in its charter)
OKLAHOMA 73-1351610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 East Skelly Drive
Meridian Tower, Suite 1080
Tulsa, Oklahoma 74135-6552
(Address of principal executive office) (Zip Code)
(918) 665-8414
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No ___
---
Shares outstanding of the issuer's $.01 par value common stock as of May 11,
1999 is 1,476,646. Transitional Small Business Issuer Disclosure Format (Check
one): Yes ___ No x
---
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
----------------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 243,646 $ 421,722
Accounts receivable 82,716 124,777
Other current assets 12,780 13,434
----------------------------
Total current assets 339,142 559,933
Property and equipment, at cost:
Calculators 722,905 722,905
Office and production equipment 842,521 840,596
Furniture and fixtures 99,732 100,332
----------------------------
1,665,158 1,663,833
Accumulated depreciation 501,386 489,152
----------------------------
1,163,772 1,174,681
Patent, net of accumulated amortization of
$740,665 and $717,961 at March 31, 1999
and December 31, 1998, respectively 167,445 190,150
Investment in Ventures Education
Systems Corporation 786,251 883,626
Other assets 278,030 280,196
----------------------------
Total assets $ 2,734,640 $3,088,586
============================
</TABLE>
2
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
----------------------------------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 36,710 $ 45,604
Other accrued liabilities 84,588 18,786
----------------------------------
Total current liabilities 121,298 64,390
Long-term obligations 395,637 359,495
Shareholders' equity:
Preferred Stock, $1.00 par value, 1,000,000
shares authorized, none issued
Common Stock, $.01 par value, 10,000,000
shares authorized, 1,476,646 shares issued and
outstanding at March 31, 1999 and
December 31, 1998, respectively 14,766 14,766
Capital in excess of par value 8,756,194 8,756,194
Accumulated deficit (6,553,255) (6,106,259)
----------------------------------
Total stockholders' equity 2,217,705 2,664,701
----------------------------------
Total liabilities and stockholders' equity $ 2,734,640 $ 3,088,586
==================================
</TABLE>
3
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------------------------
<S> <C> <C>
Revenues:
Advertising $ -- $ 2,916,001
Other 6,760 32,615
------------------------------
6,760 2,948,616
Costs and expenses:
Cost of advertising services 59,902 1,044,684
Selling expenses 55,161 137,696
General and administrative expenses 242,893 404,388
------------------------------
357,956 1,586,768
------------------------------
Operating income (loss) (351,196) 1,361,848
Equity in loss of Ventures Education
Systems Corporation 95,800 --
Interest expenses -- 3,820
------------------------------
Income (loss) before income taxes (446,996) 1,358,028
Provision for income taxes -- 524,768
Net income (loss) (446,996) 833,260
Preferred stock dividends -- (22,651)
------------------------------
Net income (loss) applicable to common stock $ (446,996) $ 810,609
==============================
Net income (loss) per share $ (0.30) $ 0.55
==============================
Shares used in computing net income (loss)
per share 1,476,646 1,476,646
==============================
</TABLE>
4
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (446,996) $ 833,260
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income tax -- 441,787
Depreciation and amortization 36,514 241,354
Equity in loss of investment 95,800 --
Accrual of long-term obligations 36,142 32,856
Changes in assets and liabilities:
Accounts receivable 42,061 1,247,767
Other current assets 654 13,266
Deferred charges 2,166 (46,937)
Notes payable -- 333,724
Accounts payable (8,894) (292,640)
Income taxes payable -- (22,326)
Other accrued liabilities 65,802 (264,421)
Unearned advertising revenue -- (194,402)
-------------------------------------
Net cash provided by operating activities (176,751) 2,323,288
INVESTING ACTIVITIES
Purchases of property and equipment (1,325) (615,136)
-------------------------------------
Net cash used in investing activities (1,325) (615,136)
FINANCING ACTIVITIES
Payment of preferred stock dividends -- (22,651)
-------------------------------------
Net cash used in financing activities -- (22,651)
-------------------------------------
Increase (decrease) in cash (178,076) 1,685,501
Cash at beginning of period 421,722 2,003,165
-------------------------------------
Cash at end of period $ 243,646 $ 3,688,666
=====================================
Supplemental disclosures of cash information:
Interest paid $ -- $ 3,820
=====================================
</TABLE>
5
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting only of
normal recurring adjustments which are, in the opinion of management, necessary
in order to make the financial statements not misleading.
NOTE 2 - DESCRIPTION OF BUSINESS
ADDvantage Media Group, Inc. (the "Company") markets and sells in-store
advertising to national advertisers. This advertising is positioned on solar
powered calculators attached to the handles of shopping carts. The patented
calculators are marketed under the registered trademark "Shoppers
Calculator(R)."
On September 1, 1995, the Company and Wal-Mart Stores, Inc. ("Wal-Mart") entered
into a four-year contract in settlement of a lawsuit related to prior contracts
under which the Company would install and maintain Shoppers Calculator(R) in all
of Wal-Mart's Supercenters in the continental United States and Wal-Mart was
responsible for selling the advertising for the calculators during the initial
phase of the contract. Under the contract, the Company had the right to retain
90% of the advertising revenue. During the last quarter of 1996, the Company
assumed the responsibility for sales of advertising and this arrangement was
formalized in an amendment to the Wal-Mart contract dated August 25, 1997. Wal-
Mart agreed to guarantee advertising revenues to the Company of $23.5 million,
subject to the Company's obligation to install and service the Shoppers
Calculators(R) during the revenue guaranty period. In May 1998, the Company
received the final revenue guarantee payment. The Company had the option to
continue the contract to October 6, 1999, however, Wal-Mart notified the Company
that it would not agree to a new contract or an extension of the current
contract past its present term. Based on Wal-Mart's decision not to renew the
present contract, the Company made the decision to commence de-installation of
the Shopper Calculator(R) program beginning June 15, 1998. Such de-installation
was completed by September 15, 1998.
On September 2, 1998 the Company filed a civil complaint against Wal-Mart in the
United States District Court for the Western District of Arkansas, Fayetteville
Division, seeking both compensatory and punitive damages based on various
allegations of wrongdoing by Wal-Mart. The lawsuit generally alleges that, at
the direction of Wal-Mart's President and CEO, David Glass, Wal-Mart breached
contracts with the Company, including a September 1, 1995 contract which was
executed in connection with the settlement of claims which the Company had
asserted against Wal-Mart in previous litigation. The lawsuit also alleges that
based on a course of conduct approved by Mr. Glass, Wal-Mart is liable to the
Company for misrepresentation, deceptive trade practices, injurious falsehood,
and intentional interference with contractual relationships and business
expectancies. The lawsuit also includes a claim for damages under the doctrine
"promissory estoppel".
6
<PAGE>
The civil complaint alleges that the Company has suffered substantial damages as
a consequence of the conduct of Wal-Mart, as alleged in the lawsuit. The civil
complaint does not, however, refer to a specific dollar amount of damages which
the Company seeks to recover from Wal-Mart in the lawsuit.
In response to the lawsuit, on October 6, 1998, Wal-Mart filed a counterclaim
against the Company and a third-party complaint against Charles H. Hood, Gary
Young, and unidentified "John Doe" defendants. In the counterclaim, Wal-Mart
alleged that the Company was liable to Wal-Mart for unspecified compensatory and
punitive damages on theories of promissory estoppel, breach of contract,
defamation and deceptive trade practices. In the third-party complaint, Wal-Mart
further alleged that Mr. Hood and Mr. Young were liable to Wal-Mart for
unspecified compensatory and punitive damages for defamation.
The Company expects to incur losses for the foreseeable future. Presently,
business activity is being limited to selling units, which provides
unpredictable cash flow, and contacting other retailers and advertisers about
the Shoppers Calculator program. The Company has continued to downsize its staff
and overhead requirements in order to continue with limited operational activity
while the lawsuit against Wal-Mart is being processed. The Company believes that
the outcome of the litigation which it has filed against Wal-Mart will likely
have a material impact on its future and the future of the Shoppers
Calculator(R) program.
The Company is currently evaluating a number of options and opportunities which
could include a merger, the sale of the Shoppers Calculator(R) assets or some
other business alliance.
NOTE 3 - INVESTMENT IN VENTURES EDUCATION SYSTEMS CORPORATION
On September 1, 1998 the Company acquired a 27% interest in Ventures Education
Systems Corporation, a private company engaged in the commercial development and
marketing of proprietary teaching techniques, services, products and materials,
principally to public primary and secondary schools. The Company paid $990,000
cash for the interest, which consists of 550,000 shares of common stock. Under
the terms of the investment, the Company was able to designate one member of the
Ventures Board of Directors. It is also contemplated that the Company may
provide certain assistance in connection with the development of Ventures'
future marketing and sales efforts and financial planning.
Ventures is a development stage company formed in May of 1997 and is
headquartered in New York, New York. Its innovative teaching methods, based on
cognitive science precepts, focus on student-centered learning and are designed
to improve student motivation. The products and services were developed from
the methods and techniques developed by its not-for-profit affiliate, Ventures
in Education, Inc., over a period of approximately 17 years. Its methods and
techniques strived for improved literacy, logical and quantitative reasoning and
problem solving skills. The company's principal customer base is comprised of
those public schools which are eligible for Federal "Title I" funds.
7
<PAGE>
Ventures Education Systems Corporation's operating results for the three months
ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
Three Months ended
March 31, 1999
(Unaudited)
------------------
<S> <C>
Total Revenues $ 344,481
Cost and Expenses 699,295
---------
Net Loss $(354,814)
=========
ADDvantage Media Group, Inc.
equity in the net loss for the period $ (95,800)
=========
</TABLE>
NOTE 4 - INCOME TAXES
As a result of Wal-Mart's decision to terminate its contract with the Company,
management has reevaluated the likelihood of realizing the deferred tax assets
resulting from its net operating loss and tax credit carryforwards. During the
second quarter of 1998 management determined that the Company no longer met the
criteria to continue to recognize these tax carryforwards as assets.
Consequently, the second quarter tax provision was increased to reverse the
deferred tax asset.
NOTE 5 - REVERSE STOCK SPLIT
On October 7, 1998, the Company's shareholders approved an amendment to the
Company's Certificate of Incorporation to effect a one for four reverse stock
split. The amendment became effective at the close of business on October 8,
1998.
As a result of the reverse stock split, the total number of issued and
outstanding shares of the Company were reduced from 5,906,584 to 1,476,646. The
number of shares held by each shareholder was reduced to an amount equal to 25%
of the number owned prior to the effectiveness of the reverse split. The number
of shares subject to outstanding options and warrants was reduced accordingly.
The earnings per share and the shares outstanding have been reported herein on a
post-split basis.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
- -------------------------------------------------------------------------------
The Company entered into a contract with Wal-Mart effective as of September 1,
1995, whereby the Company agreed to install and maintain its Shoppers
Calculators in all of Wal-Mart's Supercenter stores in the continental United
States. Under the contract, Wal-Mart guaranteed that the Company's share of
advertising revenues would be $2,700 per installed store, per four-week
advertising cycle, until a total of approximately $23,500,000 had been received
by the Company. At June 30, 1998, the total amount of the revenue guarantee had
been received, so therefore, the last half of 1998 and the first quarter 1999
did not include any revenue guarantee payments from Wal-Mart. The Company
commenced de-installation of the Wal-Mart Supercenter program on June 15, 1998
and completed such de-installation approximately September 15, 1998.
Advertising revenues decreased approximately $2,916,000 (100%) for the first
quarter ended March 31, 1999, as compared to the three months ended March 31,
1998. During the second fiscal quarter of 1998 the Wal-Mart revenue guarantee
was concluded with a final billing of $360,900 ($1,074 per store) for
advertising cycle number six which ended on June 14, 1998. There were no
significant advertising revenues earned after that date.
Operating income (loss) decreased $1,713,000 in 1999, as compared to 1998. The
Company's net loss applicable to Common Stock was $447,000 for 1999, as compared
to net income of $810,600 for the same period last year. As a result of
implementation of the September 1, 1995 Wal-Mart contract, 1995 earnings were
increased by $3,910,000 from the accounting recognition of the future tax
benefits of the Company's net operating losses and temporary differences
aggregating $10,290,000 at December 31, 1995. The 1998 tax expense of $524,800
reflects the amortization of the deferred tax asset recognized in 1995. As a
result of Wal-Mart's decision to terminate its contract with the Company,
management has reevaluated the likelihood of realizing the deferred tax assets
resulting from its net operating loss and tax credit carryforwards. During the
second quarter of 1998, management determined that the Company no longer met the
criteria to continue to recognize these tax carryforwards as assets.
Consequently, the tax provision for the second quarter of 1998 was increased by
$1,556,000.
Costs of advertising services (representing primarily labor to supervise,
service and clean the installed units and change advertising messages and the
depreciation of installed units) decreased approximately $984,800 (94%) in the
first quarter of 1999 as compared to the same period in 1998 as a result of
reduced labor costs and depreciation expense. On March 1, 1998 the Company began
reducing its field service staff and by the end of November 1998, all field
service staff employees except for warehouse personnel were terminated. Labor
costs and related expenses subsequent to June 30, 1998 related entirely to the
de-installation of the of the Wal-Mart Supercenter program which was completed
approximately September 15, 1998.
9
<PAGE>
Selling expenses decreased approximately $82,500 (60%) in 1999 compared to the
same period 1998. During 1999, payroll and payroll related expenses and sales
representative retainer expenses decreased $77,200. Marketing materials cost,
advertising and other expenses decreased $5,300 in 1999 as compared to 1998.
Sales efforts for the first quarter of 1999 were shifted from advertising sales
for the Wal-Mart Supercenter program to contacting other retailers and
advertisers regarding the Shoppers Calculator(R) program.
General and administrative expenses decreased $161,500 (40%) during the first
quarter of 1999 as compared to the same period in 1998. During 1999, payroll and
payroll related expenses decreased $21,800. Officer and management bonus
accruals decreased $82,500 in 1999 as compared to 1998. Executive retirement
plan accruals, including insurance cost to fund future payments, decreased
$19,700 during 1999. Expenses related to broker and analyst meetings and other
shareholder expenses decreased $16,000 over 1998. Decreases amounting to
$21,500 occurred in professional fees, occupancy costs and other expenses.
Equity in loss of Ventures Education Systems Corporation increased $95,800
during the first quarter of 1999 as compared to 1998. The Company acquired a 27%
interest in Ventures on September 1, 1998. Ventures has operated at a loss since
the acquisition date and the Company's share has been reflected as a charge to
earnings with a corresponding reduction in the carrying cost of the investment.
Interest expenses decreased approximately $3,800 (100%) during the first quarter
of 1999 as compared to the same period in 1998. During 1999, the Company
incurred no interest expenses.
FINANCIAL CONDITION AND LIQUIDITY
The termination of the Company's program with Wal-Mart has materially reduced
the Company's revenues. Consequently, the Company expects to incur losses for
the foreseeable future. Presently, business activity is being limited to
selling units, which provides unpredictable cash flow, and contacting other
retailers and advertisers about the Shoppers Calculator program. The Company has
continued to downsize its staff and overhead requirements in order to continue
with limited operational activity while the lawsuit which was filed against Wal-
Mart in September, 1998 is being processed.
Notwithstanding the cost-cutting steps that have been taken, the Company will
need additional financing or significantly increased funds from operations to
accomplish its current business plan, which could include a merger, the sale of
the Shoppers Calculator assets or some other business alliance. To the extent
that the Company cannot generate the necessary funding from cash flow from
operations, it will be required to seek capital from third parties in order to
accomplish its business plan. If however, the Company is unable to execute
these plans within the time frames anticipated, the Company has contingency
plans for further cost-cutting measures.
The Company believes that the outcome of the Wal-Mart litigation will have a
material impact on its future and the future of the Shoppers Calculator program.
10
<PAGE>
YEAR 2000
The Company is making an assessment of its Year 2000 date issues as it relates
to computer operations of the Company, the computer hardware and software owned
by the Company, the accounting software provided by its vendor, the software of
other suppliers and vendors, and the software of customers.
The most critical aspect for the Company regarding the Year 2000 problem
involves the Company's accounting software. The Company's vendor of the software
is addressing this issue and assures its users that all software will be revised
to permit the usage of the Year 2000 date without adverse consequences to the
software users' systems. The Company has made arrangements with its local
computer systems consultant to survey all of the Company's computers and non-
accounting software acquired and used in Company operations. This survey will
include alarm systems, office equipment, computers, "off-the-shelf" software,
and software designed by the Company. It has been determined that Year 2000
problems encountered by the Company's customers would not be material. However,
the Company does have equipment which will be affected by the Year 2000 problem.
The Company will contact vendors of such equipment supplied by the Company and
determine if the equipment requires modifications to address its customers' Year
2000 problems.
The Company has determined that the Year 2000 is not a material event or
uncertainty that would cause reported financial information not to be
necessarily indicative of future operating results or financial condition.
Additionally, the Company believes that the costs or consequences of incomplete
or untimely resolution of the Year 2000 issue is not a material event. These
determinations are based on three factors: the availability of accounting
software which has dealt with the Year 2000 problem, the relatively small amount
of reliance by the Company on specialized software or computer equipment, and
the inconsequential impact on the Company of any of the Company's customers'
Year 2000 problems.
FORWARD LOOKING STATEMENTS
Certain statements included in this report which are not historical facts are
forward-looking statements. These forward-looking statements are based on
current expectations, estimates, assumptions and beliefs of management; and
words such as "expects," "anticipates," "intends," "plans," "believes,"
"projects", "estimates" and similar expressions are intended to identify such
forward looking statements. These forward looking statements involve risks and
uncertainties, including, but not limited to, the Company's ability to obtain
new users of the Shoppers Calculator(R) program and to sell advertising for that
program, general economic conditions and conditions affecting the retail
environment, the availability of raw materials and manufactured components and
the Company's ability to fund the costs thereof, and other factors which may
affect the Company's ability to comply with future obligations. Accordingly,
actual results may differ materially from those expressed in the forward looking
statements.
11
<PAGE>
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
----------- -----------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K.
None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADDVANTAGE MEDIA GROUP, INC.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Charles H. Hood Director and President May 11, 1999
- -------------------
Charles H. Hood (Principal Executive Officer)
/s/ Gary W. Young Director, Executive Vice President May 11, 1999
- -----------------
Gary W. Young Finance and Administration and
Treasurer (Principal Financial Officer)
13
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
----------- -----------
11 Statement re: Computation of Per Share
Earnings
27 Financial Data Schedule
14
<PAGE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
The Company adopted SFAS No. 128, "Earnings Per Share," during 1997. SFAS No.
128 requires presentation of basic and diluted earnings per share. Basic
earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
reporting period. Diluted earnings per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. All prior period weighted average and
per share information has been restated in accordance with SFAS No. 128.
Outstanding stock options and warrants issued by the Company represent the only
dilutive effect on weighted average shares. A reconciliation between basic and
diluted weighted average shares outstanding and the related earnings per share
calculation is presented below:
Basic and diluted EPS for the three months ended March 31, 1999 and 1998, were
computed as follows: Earnings per share data has been restated to reflect the
one for four reverse stock split to holders of record at the close of business
on September 15, 1998 effective October 8, 1998.
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------------------------
<S> <C> <C>
Basic EPS Computation:
Net income (loss) $ (446,996) $ 833,260
Less preferred stock dividends -- 22,651
Net income (loss) available to common stockholders $ (446,996) $ 810,609
Weighted average shares outstanding 1,476,646 1,476,646
==============================
Basic EPS $ (0.30) $ 0.55
Diluted EPS Computation:
Net income (loss) available to common stockholders $ (446,996) $ 810,609
==============================
Weighted average shares outstanding 1,476,646 1,476,646
Incremental shares for assumed exercise
of securities
Options -- 98,023
------------------------------
1,476,646 1,574,669
==============================
Diluted EPS $ (0.30) $ 0.51
==============================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 243,646
<SECURITIES> 0
<RECEIVABLES> 82,716
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 339,142
<PP&E> 1,665,158
<DEPRECIATION> 501,386
<TOTAL-ASSETS> 2,734,640
<CURRENT-LIABILITIES> 121,298
<BONDS> 0
0
0
<COMMON> 14,766
<OTHER-SE> 2,202,939
<TOTAL-LIABILITY-AND-EQUITY> 2,734,640
<SALES> 0
<TOTAL-REVENUES> 6,760
<CGS> 59,902
<TOTAL-COSTS> 357,956
<OTHER-EXPENSES> 95,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (446,996)
<INCOME-TAX> 0
<INCOME-CONTINUING> (446,996)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (446,996)
<EPS-PRIMARY> (.30)
<EPS-DILUTED> (.30)
</TABLE>
