- -----------------------------------------------------------------------------
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
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No.: 0-20101
-----------------------------
URECOATS INDUSTRIES INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3545304
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4100 North Powerline Road, Suite F-1, Pompano Beach, Florida 33073
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(Address of principal executive offices)
(954) 977-5428
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(registrant's telephone number, including area code)
Check whether the registrant (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 [ ]
--- ---
The number of shares of common Stock, par value $.01 per share, deemed
outstanding as of March 31, 1999 was 68,550,284 shares.
- ------------------------------------------------------------------------------
URECOATS INDUSTRIES INC.
FORM 10-QSB
MARCH 31, 1999
INDEX
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PAGE
------
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998 ............................................... 3-4
Condensed Consolidated Statements of Operations for the three months
months ended March 31, 1999 and 1998 ................................ 5
Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 1999 and 1998 ....................................... 6-7
Notes to Condensed Consolidated Financial Statements................. 8
ITEM 2. MANAGEMENT'S PLAN OF OPERATION ............................. 9-11
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. LEGAL PROCEEDINGS ......................................... 12
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ................. 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ........................... 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ....... 13
ITEM 5. OTHER INFORMATION ......................................... 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .......................... 14
Page 2
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
MARCH 31, 1999 DECEMBER 31, 1998
------------------ -----------------
(UNAUDITED)
Current Assets:
Cash $ 10,379 $ 102,801
Loans Receivable 7,508 21,042
Prepaid Expenses 27,517 39,535
------------------ -----------------
Total Current Assets 45,404 163,378
------------------ -----------------
Property and Equipment, Net 291,651 207,036
------------------ -----------------
Other Assets:
Deposits 5,227 5,227
Intangibles, Net 998,024 997,777
------------------ -----------------
Total Other Assets 1,003,251 1,003,004
------------------ -----------------
Total Assets $ 1,340,306 $ 1,373,418
================== =================
See Accompanying Notes to Condensed Consolidated Financial Statements
Page 3
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
---------------------------------------
MARCH 31, 1999 DECEMBER 31, 1998
------------------ -----------------
(UNAUDITED)
Current Liabilities:
Accounts Payable and
Accrued Expense 849,288 1,460,515
Loans Payable 65,452 72,752
Notes Payable $ 184,453 $ 184,453
Due to Related Parties 389,178 232,623
------------------ -----------------
Total Current Liabilities 1,488,371 1,950,343
------------------ -----------------
Commitments and Contingencies 634,966 685,114
------------------ -----------------
Stockholders' (Deficit):
Preferred Stock, $1.00 Par
Value, 2,000,000 Shares
Authorized; Series A
Convertible, 750,000 Shares
Authorized; Issued &
Outstanding, 62,500 Shares
Unconverted (Less Offering
Costs of $7,465) 55,035 55,035
Common Stock $.01 Par Value,
100,000,000 shares Authorized;
68,550,284 Shares Issued &
Outstanding, March 31, 1999;
58,992,784 Shares Issued &
Outstanding, December 31, 1998. 685,503 589,928
Additional Paid-In-Capital 16,967,449 15,806,185
Accumulated (Deficit) -
Discontinued Operations (14,156,915) (13,379,285)
Accumulated (Deficit) -
Development Stage Operations (4,334,103) (4,333,902)
------------------ -----------------
Total Stockholders' (Deficit) (783,031) (1,262,039)
------------------ -----------------
Total Liabilities and
Stockholders' (Deficit) $ 1,340,306 $ 1,373,418
================== =================
See Accompanying Notes To Condensed Consolidated Financial Statements
Page 4
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
----------------- -----------------
(RESTATED)
Revenues $ -0- $ -0-
----------------- -----------------
Costs and Expenses:
Selling, General and
Administrative 523,232 333,564
Depreciation and Amortization 18,510 2,766
Research and Development 235,888 31,051
----------------- -----------------
Total Costs and Expenses (777,630) (367,381)
----------------- -----------------
Net (Loss) from Development Stage
Operations (777,630) (367,381)
(Loss) from Discontinued Operations $ (201) $ (220,691)
----------------- -----------------
Net (Loss) $ (777,831) $ (588,072)
----------------- -----------------
Net (Loss) Per Common Share
Basic and Dilutive
Development Stage Operations $ (0.012) $ 0.011
Discontinued Operations (0.000) 0.006
----------------- -----------------
Total $ (0.012) (0.017)
Weighted Average Shares Outstanding 63,771,534 32,900,109
----------------- -----------------
See Accompanying Notes to Condensed Consolidated Financial Statements
Page 5
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1999 1998
--------------- ---------------
Cash Flows from Operating Activities:
Net (Loss)
Development Stage Operations $ (777,630) $ (367,381)
Discontinued Operations (201) (220,691)
Adjustments to Reconcile Net (Loss)
to Net Cash (Required) by Operating
Activities:
Depreciation and Amortization
Development Stage Operations 18,510 2,766
Discontinued Operations 176 6,118
Changes in Assets and Liabilities:
Prepaid Expenses 12,018 789
Loans Receivables 13,534 -0-
Deposits -0- (9,595)
Accounts Payable and Accrued
Expenses (611,227) 74,919
Due to Related Parties 156,555 5,749
Decrease in Commitments and
Contingencies (50,148) -0-
--------------- ---------------
Net Cash (Required) by
Operating Activities (1,238,413) (507,326)
--------------- ---------------
Cash Flows from Investing Activities:
Acquisition of Property & Equipment
Development Stage Operations (103,267) (20,370)
Discontinued Operations - (135)
(Acquisition) Write-off of Intangibles
Development Stage Operations (281) -0-
Discontinued Operations -0- -0-
--------------- ---------------
Net Cash (Required) by
Investing Activities $ (103,548) (20,505)
--------------- ---------------
See Accompanying Notes to Condensed Consolidated Financial Statements
Page 6
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
(CONTINUED)
----------------------------
1999 1998
--------------- ---------------
(RESTATED)
Cash Flows from Financing Activities:
Proceeds from Issuance of
Common Stock 1,256,839 556,815
Payment of Notes (7,300) -0-
(Decrease)Increase from Loans -0- (27,271)
--------------- ---------------
Net Cash Provided by Financing
Activities 1,249,539 529,554
--------------- ---------------
Net Increase (Decrease) in Cash
Development Stage Operations (94,698) (17,298)
Discontinued Operations 2,276 15,585
--------------- ---------------
Net (Decrease) in Cash $ (92,422) 1,713
=============== ===============
Supplemental Disclosure of
Cash Flow Information:
Non-Cash Financing Activities:
Legal Fees $ 4,760 $ -0-
Consultant Fees 192,844 204,500
Repayment of Debts 846,860 5,000
Employee Compensation 212,375 -0-
--------------- ---------------
Totals $ 1,256,839 209,500
=============== ===============
See Accompanying Condensed Consolidated Financial Statements
Page 7
URECOATS INDUSTRIES INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited condensed consolidated financial statements
for the three month periods ended March 31, 1999 and 1998, have been prepared
in conformity with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Regulation
S-B. The financial information as of December 31, 1998, is derived from the
registrant's Form 10-KSB for the year ended December 31, 1998. Certain
information or footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities
and Exchange Commission.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. In the opinion of management, the accompanying financial
statements include all adjustments necessary (which are of a normal and
recurring nature) for the fair presentation of the results of the interim
periods presented. While the registrant believes that the disclosures
presented are adequate to keep the information from being misleading, it is
suggested that these accompanying financial statements be read in conjunction
with the registrant's audited consolidated financial statements and notes for
the year ended December 31, 1998, included in the registrant's Form 10-KSB for
the year ended December 31, 1998.
Operating results for the three month period ended March 31, 1999, are
not necessarily indicative of the results that may be expected for the
remainder of the fiscal year ending December 31, 1999. The accompanying
unaudited condensed consolidated financial statements: include the accounts
of the registrant and its wholly-owned subsidiaries. All significant inter-
company accounts and transactions have been eliminated in consolidation. The
unaudited condensed consolidated financial statements for the three months
ended March 31, 1998, have been restated to conform with the results indicated
in the December 31, 1998 Form 10-KSB.
NOTE 2 - INTANGIBLES
- --------------------
The registrant evaluates the amortization period of intangibles on an
ongoing basis in light of changes in any business conditions, events or
circumstances that may indicate the potential impairment of intangible assets.
The adoption of Statement of Accounting Standards 121, "Accounting for the
Impairment of Long-Lived Assets to be Disposed Of", and the evaluation by the
registrant, did not have a significant effect on the consolidated financial
position or results of operations of the registrant for the three months ended
March 31, 1999.
Page 8
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
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FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements. For this
purpose, any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or the negative or other variations
thereof or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainties, and actual results may differ materially depending on a variety
of factors.
PLAN OF OPERATION
Urecoats Industries Inc.'s (the "Company") plan of operation for the
next twelve (12) months, through its wholly-owned subsidiary, Urecoats
International, Inc., engaged in the business of acquiring, developing, and
marketing sealant and coating products containing recycled material in their
composition, for use in various industries, such as roofing, constructions,
automotive, shipping, trucking, and pavement. is to complete prototype
development of its spray application system for its "URECOATS 100" roofing
product ("Roofing Product"). The Company has set up a testing, training and
laboratory facility, for various research and development related to the
Company's current sealant products. In October 1997, Urecoats acquired all
right, title and interest in two formulae, including certain technologies for
their manufacture and application. Urecoats is also developing in its new
laboratory facility, an asphalt sealant product incorporating crumb rubber,
for the pavement industry ("Pavement Sealant").
Urecoats also entered into a Consulting Agreement on July 21, 1998,
effective June 1, 1998, with Creative Chemical and Ponswamy Rajalingam, Ph.D.
("Dr. Raja"), the owner and inventor, respectively, of the formulas purchased
by Urecoats International, including certain technologies for their spray
application (collectively referred to as "Raja Agreement"). Dr. Raja is a
chemist dedicated to researching, developing and commercializing products
incorporating recovered raw materials in their composition. The Company also
entered into a Consulting Agreement on January 31, 1999, effective January 1,
1999, with R. Uma Umarani, Ph.D. ("Dr. Umarani"), a chemist, for the research
and development of the Pavement Sealant formula. Dr. Raja and Dr. Umarani are
both expected to become full-time employees of a to be formed wholly-owned
subsidiary, Urecoats Laboratories, Inc., which entity will be responsible for
research and development efforts of the Company.
Page 9
MARKETS AND STRATEGY
The Company focuses on select value-added niche markets in which it can
establish strong market positions and have advantages in product development,
manufacturing and distribution.
The Company has identified the $20 billion Roofing Industry for the
introduction of its first Product. The Company plans to continue
implementation of product development for value-added end-use applications in
higher growth market segments, particularly sealant and coatings which
facilitate recycling and other environmentally useful sealants and coatings.
Management believes the Company's technologies provide it with advantages in
the development of new products and the penetration of new markets.
The Company intends is pursuing additional strategic acquisitions that
will allow it to establish its market position in targeted markets. Management
believes that the high degree of fragmentation in the adhesives, sealants and
coatings industry will continue to provide suitable acquisition candidates.
Potential acquisition candidates will be evaluated based upon the ability of
the Company to: (i) expand its product line; (ii) enhance its product
development capabilities; (iii) market products through new or expanded
distribution channels; and (iv) increase its international presence.
Management believes it has significant opportunities to establish its
products in international markets, to enter developing markets and to
establish new customer relationships. Management also believes it has a
world class "Rubber Sealant Membrane (RSM)" that will enhance, support and
change many industries.
MANUFACTURING, PACKAGING AND DISTRIBUTION
Urecoats has initiated plans to handle initial URECOATS 100 manufacturing,
packaging and distribution through contract manufacturers. These contract
manufacturers will prepare the various components of the product, as specified
by Urecoats, provide for private label packaging and assist with shipping of
product components to Mexico and other countries, for distribution to the
customer. The Company is also considering establishing a subsidiary to handle
its future manufacturing, packaging and distribution needs.
RESEARCH AND DEVELOPMENT
The Company presently conducts research and development activities,
primarily related to products containing recycled materials in their formula
and spray application systems, through outside consultants. As mentioned
above, Urecoats retained Dr. Umarani, to concentrate on research and
development of an Pavement Sealant formula, made for the pavement industry.
The goal of the Pavement Sealant is to develop a sealant with excellent
performance, longer duration and lower cost, as compared to existing asphalt
sealant products in the marketplace today.
The Company expended approximately $235,888 on research and development
of products and spray application systems for the quarter ended March 31, 1999.
Page 10
PATENTS, TRADEMARKS AND LICENSES
The Company has submitted information on its proprietary formula and
specially designed spray application system, to its intellectual property
legal counsel for review and, in August 1998, the formula became the
subject of a utility patent application filed by the Company with the
United States Patent and Trademark Office ("USPTO"). The prototype spray
application system is still being reviewed at this time.
The Company utilizes URECOATS 100 as a trademark name and is presently
marketing the Roofing Product under that trademark name. Management also
performed trademark research on the name "Rubber Sealant Membrane (RSM)",
which trademark will be used for sales and marketing efforts. Trademark and
servicemark applications are presently being prepared and expected to be
filed with the USPTO during the second quarter of 1999.
The Company is also currently gathering information, collecting data
from various tests, and working closely with its Patent Legal Counsel on
the preparation and expected filing of three additional patent applications,
seeking protection on its prototype spray application systems, for the
"Rubber Sealant Membrane (RSM)" Roofing Product and Pavement Sealant, as
well as the formula of the Pavement Sealant.
YEAR 2000 COMPLIANCE BY THE COMPANY AND OTHERS
Year 2000 compliance concerns the ability of certain computerized
information systems to properly recognize date-sensitive information, such as
invoices for the Company's services, as the year 2000 approaches. Systems
that do not recognize such information could generate erroneous data or cause
systems to fail; this problem may occur as early as calendar year 1999. The
Company has received notifications from its various vendors, suppliers, and
equipment manufacturers, of their Year 2000 compliant systems. The Company
also has updated its computer systems and hardware to be Year 2000 compliant.
However, there still remains a slight risk for the Year 2000 compliance of
those with whom the Company does business, primarily third party payors.
FINANCIAL CONDITIONS
The Company has suffered losses from discontinued operations resulting
in an accumulated (deficit) of $(14,156,915); and recurring losses from
development stage operations of $(4,334,103).
The Company currently does not have the liquidity or capital resources
to fund Urecoats without raising capital either from borrowing or from the
sale of additional shares of stock. In 1999, the Company borrowed
approximately $377,000 for its operations. The Company anticipates raising
further financing through the sale of additional unregistered, restricted
common stock. Management is continuing to negotiate with vendors and various
legal counsel to resolve all claims and judgments from former discontinued
operations.
Page 11
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
No material, and thus reportable, changes have occurred since the filing
of the Company's Form 10-KSB for the Year Ended December 31, 1998, with regard
to litigation of the Company. Refer to the Company's Form 10-KSB for the Year
Ended December 31, 1998 for more information.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- --------------------------------------------------
During the quarterly period ended March 31, 1999, the Company issued
restricted common stock, for certain private transactions, in reliance on
Section 4(2) of the Act, as described below:
(a) The Company issued 23,000 shares of restricted common stock,
on behalf of its Urecoats subsidiary, pursuant to a consulting arrangement.
This transaction was valued and recorded at $3,128.
(b) The Company issued 1,130,000 shares of restricted common stock,
on behalf of its Urecoats subsidiary, in payment of accrued consulting fees of
$120,570 and a vendor account payable of $2,500.
(c) The Company issued 3,126,000 shares of restricted common stock,
in payment of accrued consulting fees of $292, 140 and accrued legal fees of
$212,150.
(d) The Company issued 2,500,000 shares of restricted common stock,
in repayment of loans of $187,500 from Richard J. Kurtz, Chairman of the Board
of the Company.
(e) The Company issued 800,000 shares of restricted common stock,
in payment of accrued bridge loan fees. The transaction was valued and
recorded at $32,000.
(f) The Company issued 468,500 shares of restricted common stock,
in payment of consulting fees, 350,000 of which were issued to Charles
Gargano, a Director of the Company. These transactions were valued and
recorded at $63,716.
(g) The Company issued 35,000 shares of restricted common stock,
in payment of legal fees. The transaction was valued and recorded at $4,760.
(h) The Company issued 1,000,000 shares of restricted common stock,
as initial additional compensation to Larry T. Clemons, President of the
Company. The transaction was valued and recorded as $200,000.
Page 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
A Special Meeting of the Shareholders of the Company, under its former
name of Winners All International, Inc., was held at the offices of the
Company on February 8, 1999 pursuant to notice and proxy statement, wherein
the following matters were considered and approved by the requisite
majority voting requirements:
1. Authorized an amendment to the Company's Restated Certificate of
Incorporation increasing the authorized common stock of the
Company from a total of 60,000,000 shares of common stock having
a par value $.01 per share to 100,000,000 shares of Common Stock
having a par value of $.01 per share;
2. Authorized an amendment to the Company's Restated Certificate of
Incorporation to change the name of the Company to Urecoats
Industries Inc.;
3. Ratified the Company's 1999 Consultant and Employee Stock
Purchase and Option Plan covering a total of 8,000,000 shares of
common stock.
A list of the shareholders entitled to vote at the meeting and arranged
in alphabetical order was presented to the meeting for examination by any
shareholder present or by the Inspector of Elections. The list was certified
by the Company's Transfer Agent, Continental Stock Transfer & Trust Company,
in New York. The former President of the Company acknowledged that a total of
28,313,058 shares represented the amount necessary to constitute a quorum for
a valid meeting. There was present, by proxy and in person a total of
30,344,640 shares. Accordingly a quorum was present for the valid conduct of
business.
The Inspector of Elections' report reflected the following results:
1. A total of 29,162,320 shares were voted for Proposal #1
constituting more than a majority of those entitled to vote in
person and by proxy at this meeting;
2. A total of 31,248,205 shares were voted for Proposal #2
constituting more than a majority of the total number of shares
present at the meeting and entitled to vote in person or by proxy;
3. A total of 17,971,307 shares were voted for Proposal #3
constituting more than a majority of the total number of shares
present at the meeting and entitled to vote in person or by proxy
thereat.
Page 13
ITEM 5. OTHER INFORMATION
- --------------------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) EXHIBITS
10.1 EXECUTIVE COMPENSATION DESCRIPTION - LARRY T. CLEMONS
27.1 FINANCIAL DATA SCHEDULE - MARCH 31, 1999
27.2 RESTATED FINANCIAL DATA SCHEDULE - MARCH 31, 1998
(b) REPORTS ON FORM 8-K
1. Filed February 17, 1999
Page 14
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, in the City of Pompano Beach, and State of Florida on
May 20, 1999.
URECOATS INDUSTRIES INC.
(Registrant)
/s/ Larry T. Clemons May 20, 1999
- ---------------------------- -----------------
Larry T. Clemons Date
President and Treasurer
/s/ Michael T. Adams May 20, 1999
- ---------------------------- -----------------
Michael T. Adams Date
Vice President and Secretary
Page 15
EXHIBIT INDEX
-------------
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
10.1 EXECUTIVE COMPENSATION DESCRIPTION - LARRY T. CLEMONS
27.1 FINANCIAL DATA SCHEDULE - MARCH 31, 1999
27.2 RESTATED FINANCIAL DATA SCHEDULE - MARCH 31, 1998
Page 16
EXHIBIT 10.1
------------
The Board of Directors in a Special Meeting dated February 8, 1999,
appointed Larry T. Clemons as President of the Company. The Company agreed
to a compensation arrangement, which has not been set forth in a formal
executive employment agreement as of the date of this report, whereby Mr.
Clemons is to receive an initial annual salary in the amount of $75,000 and
1,000,000 shares of restricted common stock of the Company, beginning
February 8, 1999. The annual salary is subject to review on a quarterly
basis, and, based on each $.20 increase in the value of the stock of the
Company (with the base beginning value of the common stock as of February 8,
1999 of $.35), Mr. Clemons is eligible for increases of $10,000. Additionally,
Mr. Clemons has an option to purchase 1,000,000 shares of restricted common
stock at the end of his first year of employment at a price per share of $.16.
<TABLE> <S> <C>
<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> 10379
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45404
<PP&E> 291651
<DEPRECIATION> 18687
<TOTAL-ASSETS> 1340306
<CURRENT-LIABILITIES> 1488371
<BONDS> 0
0
55035
<COMMON> 685513
<OTHER-SE> 16967449
<TOTAL-LIABILITY-AND-EQUITY> 1340306
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (771831)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (777630)
<DISCONTINUED> (201)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (777831)
<EPS-PRIMARY> (.012)
<EPS-DILUTED> (.012)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2792
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35528
<PP&E> 79848<F1>
<DEPRECIATION> 5155<F2>
<TOTAL-ASSETS> 4366103
<CURRENT-LIABILITIES> 1861700
<BONDS> 0
0
55035
<COMMON> 357655
<OTHER-SE> 1308692
<TOTAL-LIABILITY-AND-EQUITY> 4366103
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 588072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (367381)
<DISCONTINUED> (220691)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (588072)
<EPS-PRIMARY> (.018)
<EPS-DILUTED> (.018)
<FN>
<F1>Figure is Property and Equipment, Net, plus accumulated Depreciation.
<F2>According to the registrant's records, Depreciation and Amortization are
$5,155 and $3,729, respectfully, for a total of $8,884.
</FN>
</TABLE>
