UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT OF 1934
For the transition period from __ to __
Commission File No. 0-22744
VIKING CAPITAL GROUP, INC.
--------------------------
(Exact name of small business issuer as specified in its charter)
Utah 87-0442090
---- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Two Lincoln Centre, Suite 300, 5420 LBJ FWY, Dallas, Texas 75240
----------------------------------------------------------------
(Address of principal executive offices)
(972) 386-9996
--------------
(Issuer's telephone number)
----------------------------------------------------------------
(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
As of March 31, 2000, approximately 33,366,957 shares of Common Stock of the
issuer were outstanding. As of March 31, 2000, 100,000 shares of Class B Common
Stock of the issuer were outstanding.
<PAGE>
VIKING CAPITAL GROUP, INC.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 2000 and
December 31, 1999 3
Consolidated Statements of Operations - For the three
months ended March 31, 2000 and 1999, and for the period
from inception (November 12, 1986) to March 31, 2000 5
Consolidated Statements of Cash Flows - For the three
months ended March 31, 2000 and 1999, and for the period
from inception (November 12, 1986) to March 31, 2000 6
Notes to Consolidated Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis or Plan of Operation. 10
PART II - OTHER INFORMATION
Item 2. Changes in Securities 12
Item 5. Other Information 12
Item 6. Exhibits 12
SIGNATURES 14
EXHIBITS 15
-2-
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
ASSETS
------
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 54,007 $ 8,434
Accounts receivable 8,850 14,024
Notes and other accounts receivable and accrued interest 68,585 76,617
------------ ------------
Total current assets 131,442 99,075
------------ ------------
Office furniture, equipment, software and capitalized software
development costs, net 807,900 823,260
OTHER ASSETS 85,027 90,359
------------ ------------
TOTAL ASSETS $ 1,024,369 $ 1,012,694
============ ============
</TABLE>
-3-
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 256,630 $ 376,671
Accrued payroll and payroll taxes 1,139,909 1,008,748
Lease obligation, current portion 27,881 20,923
Note payable and accrued interest 150,690 219,201
------------ ------------
Total current liabilities 1,575,110 1,625,543
------------ ------------
LONG-TERM DEBT
Obligations under capital leases, less current portion 10,373 14,389
------------ ------------
Total liabilities 1,585,483 1,639,932
------------ ------------
STOCKHOLDERS' DEFICIT
Preferred stock $1.00 par value; 50,000,000 shares authorized;
Series A Preferred Stock $1.00 par value; 2,500,000 shares
authorized, no shares issued and outstanding -- --
Series AA Preferred Stock $1.00 par value; 6,000,000 shares
authorized, no shares issued and outstanding -- --
Common stock $0.001 par value; 150,000,000 shares authorized;
33,892,582 and 32,029,192 issued as of
March 31, 2000 and December 31, 1999, respectively 33,892 32,029
Common stock Class B $0.001 par value; 100,000 shares
authorized and outstanding 100 100
Paid-in capital 9,723,457 9,197,191
Deficit accumulated in the development stage (9,505,323) (9,062,318)
------------ ------------
252,126 167,002
------------ ------------
Less treasury stock - 525,625 shares at cost (41,206) (41,206)
Less stock issued for notes receivable (772,034) (753,034)
------------ ------------
Total stockholders' deficit (561,114) (627,238)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,024,369 $ 1,012,694
============ ============
</TABLE>
-4-
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended March 31, 2000 and 1999 and
Period from November 12, 1986 (inception) to March 31, 2000
Three months ended Period from
March 31, November 12, 1986
2000 1999 to March 31, 2000
------------ ------------ -----------------
<S> <C> <C> <C>
Revenue $ 12,393 $ -- $ 471,787
Cost of Revenue 10,914 -- 88,872
------------ ------------ ------------
Gross Profit 1,479 -- 382,915
------------ ------------ ------------
Cost and expenses
Depreciation and amortization 15,360 10,106 144,277
General and administrative expenses 428,412 475,547 9,506,324
------------ ------------ ------------
Total cost and expenses 443,772 (485,653) 9,650,601
------------ ------------ ------------
Loss from operations (442,293) (485,653) (9,267,686)
Other income(expenses)
Interest income 9,691 10,310 94,618
Interest and penalty expense (7,338) (9,078) (260,708)
Other (3,065) (3,917) (40,325)
------------ ------------ ------------
Total other income(expense) (712) (2,685) (206,415)
------------ ------------ ------------
Loss before income taxes (443,005) (488,338) (9,474,101)
Income tax provision -- -- (32)
------------ ------------ ------------
Net loss $ (443,005) $ (488,338) $ (9,474,133)
============ ============ ============
Loss per common share attributable to
common stockholders
Basic $ (0.014) $ (0.018)
Weighted average common shares outstanding
Basic 32,670,373 27,904,866
</TABLE>
-5-
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31, 2000 and 1999 and
Period from November 12, 1986 (inception) to March 31, 2000
Three months ended Period from
March 31, November 12, 1986
2000 1999 to March 31, 2000
------------ ------------ -----------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (443,005) $ (488,338) $ (9,474,133)
Non-cash charges included in operations
Allowance for doubtful accounts - - 65,062
Depreciation and amortization 15,360 10,106 146,277
Common stock issued for services and interest 145,879 187,551 2,595,406
Note payable issued for services - - 3,200
Note payable issued for interest expense - - 3,660
Common stock issued for services and
accrued expenses, expense reimb. - - 23,097
Provision for doubtful notes receivable - - 54,515
Common stock issued for interest payable - - 141,296
Loss on assets - - 15,000
Changes in assets and liabilities
Accounts receivable 5,174 193 (8,645)
Accrued interest receivable (3,711) (283) (52,888)
(Increase) in deposits - (31,767)
(Increase) in other assets 5,332 5,024 (52,675)
(Increase) in notes and other receivables (11,968) - (11,968)
Accounts payable and accrued expenses (117,099) (255,156) 380,363
Accrued payroll and payroll taxes 131,161 (11,662) 1,050,793
Advances to stockholder expensed to consulting - - 57,706
------------ ------------ -------------
Net cash used for operating activities (272,877) (552,565) (5,095,701)
Cash flows from investing activities
Capital expenditures - (49,623) (837,940)
Loans made - (70,000) (315,748)
Loan repayments - - 94,500
Other - - (15,050)
------------ ------------ -------------
Net cash used for investing activities - (119,623) (1,074,238)
Cash flows from financing activities
Stock sale expenses - - (11,716)
Proceeds from sale of common stock 363,250 706,463 4,532,889
Proceeds from notes payable 40,000 - 2,494,071
Principal repayments of notes payable (84,800) - (721,819)
Principal payments on capital lease obligations - (7,438) (72,326)
Proceeds from preferred stock sale - - 20,000
Repurchase of preferred stock - - (11,319)
Preferred dividends paid - - (5,834)
------------ ------------ -------------
Net cash provided by financing activities 318,450 699,025 6,223,946
Increase (decrease) in cash 45,573 26,837 54,007
</TABLE>
- continued -
-6-
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
VIKING CAPITAL GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
Three months ended March 31, 2000 and 1999
and Period from November 12, 1986 (inception) to March 31, 2000
Three months ended Period from
March 31, November 12, 1986
2000 1999 to March 31, 2000
----------- ----------- -----------------
<S> <C> <C> <C>
Cash at beginning of period 8,434 47,506 -
----------- ----------- -----------
Cash at end of period $ 54,007 $ 74,343 $ 54,007
=========== =========== ===========
Cash flow information:
Interest paid $ 7,338 $ 9,010 $ 110,646
Income taxes paid $ - $ - $ 32
Non-cash investing activities:
Repayment of note receivable - non cash method $ - $ - $ 21,000
Common stock issued for:
Acquisition of NIAI $ - $ - $ 10,000
Acquisition of VISI $ - $ - $ 434
Oil lease $ - $ - $ 40,000
Non-cash financing activities:
Preferred stock issued for:
Note payable-related party $ - $ - $ 60,000
Accrued interest-related party $ - $ - $ 4,500
Accrued expenses-related party $ - $ - $ 25,500
Common stock issued for:
Repayment of notes payable $ - $ 106,318 1,419,235
Payment of interest $ - $ 6,872 141,297
Payment of accounts payable and exp reimbursement $ - $ - 15,000
Conversion of preferred stock $ - $ - 100,000
Payment of preferred stock dividend $ - $ - 25,556
Notes receivable $ 19,000 $ 110,222 772,032
Note payable issued for services $ - $ - $ 6,860
Assignment of oil lease in payment of note payable $ - $ - $ 40,000
Common stock acquired for conversion of
note receivable $ - $ - $ 6,406
Common stock canceled for conversion of
note receivable $ - $ - $ 5,600
Additions to equipment under capital leases $ - $ - $ 107,631
</TABLE>
-7-
The accompanying notes are an integral part of these financial statements.
<PAGE>
VIKING CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated interim financial statements include the accounts of Viking
Capital Group, Inc. and its wholly owned subsidiaries (collectively the
"Company").
The consolidated interim financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principals ("GAAP") have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Form 10-KSB as of and for the year ended December 31,
1999.
In the opinion of management, the unaudited interim consolidated financial
statements of the Company contains all adjustments, consisting only of those of
a normal recurring nature, necessary to present fairly the Company's financial
position and the results of its operations and cash flows for the periods
presented. The preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions. Such estimates and
assumptions affect the reported amounts of assets and liabilities, as well as
the disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
2. SOFTWARE DEVELOPMENT COSTS
The Company has capitalized certain software development costs in accordance
with SFAS No. 86 (see below).
During 1999, the Company began to amortize software costs of $96,962 associated
with the development of an e-commerce web-site and web based demonstration
software associated with IP Banker and Benefits IP, using an estimated useful
life of three years.
Financial Accounting Standard No. 86, "Accounting for the Cost of Computer
Software to be Sold, Leased, or Otherwise Marketed", provides for the
capitalization of certain costs related to development of computer software
products. Capitalized computer software costs include direct labor,
labor-related overhead costs and interest. The software will be amortized over
its expected useful life of 3 years after it is placed in service. Management
periodically evaluates the recoverability, valuation and amortization of
capitalized software cost. As part of this review, management considers the
undiscounted projected future net earnings. If the undiscounted future net
earnings are less than the stated value, software costs will be written down to
fair value.
3. RELATED PARTY TRANSACTIONS
During the current quarter, the Company entered into $35,000 of promissory notes
payables with related parties. At March 31, 2000, there were $0 in promissory
notes payable with related parties.
4. OPTIONS ISSUED
During the current quarter, the Company granted 603,752 share options
exercisable at $0.45 per share. All of these options are exercisable within one
year and expire within one year and were issued in conjunction with common
restricted stock sales.
-8-
<PAGE>
VIKING CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
5. OTHER
The financial statements have been prepared on the assumption that the Company
will continue as a going concern. Its continued existence depends upon the
success of management's efforts to raise additional capital necessary to meet
the Company's obligations as they come due and to obtain sufficient capital to
execute its business plan.
There can be no degree of assurance given that the Company will be successful in
completing additional financing transactions. Should the Company be unsuccessful
in its efforts to obtain adequate financing, it's current financial condition
may be affected adversely, and such affects may be material.
6. EVENTS SUBSEQUENT TO MARCH 31, 2000
Subsequent to March 31, 2000, approximately 36,667 share options for common
restricted stock were granted. These options are exercisable at the rate of
$0.45 per share and are exercisable and expire within one year. Also subsequent
to March 31, 2000, the Company issued 73,333 common restricted shares for cash
at $0.30 per share and 69,000 common restricted shares for services rendered,
valued at $0.30 per share.
-9-
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
Material Changes in Results of Operations
This Quarterly Report on Form 10-QSB contains certain "forward-looking"
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to the Company and its subsidiaries that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this report, the words "anticipate," "believe," "estimate," "expect" and
"intend" and words or phrases of similar import, as they relate to the Company
or its subsidiaries or Company management, are intended to identify
forward-looking statements. Such statements reflect the current risks,
uncertainties and assumptions related to certain factors including, without
limitations, competitive factors, general economic conditions, customer
relations, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in other
filings made by the company with the Securities and Exchange Commission. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.
Prior to and including the current quarter, the Company has been engaged in
preparing the necessary business alliances and relationships to fulfill its full
plan of operations including both growth through acquisitions of insurance
companies and growth through building of technology based revenue streams
through non-acquisition methods. The company's plan for non-acquisition revenue
growth has focused on its business model of being an application service
provider (ASP), formerly referred to as a "service bureau environment", in fee
and transaction fee generating areas. These areas consist of internet based
banking(IP Banker) , securities trading (IP Trader), human resource/benefit plan
information (Benefits IP), life insurance information relevant to policyholders
and agents (Universal IP) and direct marketing organizations (IP Marketer).
In support of these goals, the Company has developed software capabilities
encompassing various aspects of each of these functions and is currently focused
on pursuing bank clients. Sales efforts for bank clients have been hampered due
to lack of funds for sales support and financial stability factors required to
compete effectively. The Company has also developed strategic partners to handle
secure communications and bandwidth needs, implementation requirements, ongoing
maintenance, upgrade and training needs. The Company's marketing niche is small
to medium sized banks, credit unions, S&L's etc. focusing on their desire to
retain their current customer base and enhance fee income in the face of
sweeping regulatory changes and increased services based competition primarily
from larger institutions. Each service provided by or proposed to be provided by
the Company to a bank is added to the basic on-line banking service and marketed
through/with our bank client. Our business model generates additional fee income
for our clients by sharing fee income generated through the bank depositors' use
of different services. The business model has been well received in the
marketplace and the Company intends to continue to pursue these customers.
The lack of availability of cash has been a detriment to the Company in two
areas. The first area is that insurance company targets have almost exclusively
desired a cash purchase and the Company has not been able to move fast enough
before a competitor buys a potential target. The second area is that without a
larger cash balance, bank customers are not eager to sign contracts for reasons
of stability. While a lack of cash has hindered the Company's progress,
management does not believe that it will ultimately prevent the Company from
moving forward.
Active review of the options for the Company to unlock shareholder value include
acquisitions of revenue producing technology companies that fit or complement
our business model. Management believes, based upon discussions with potential
targets, that a stock acquisition of another company that is currently producing
revenue is viable. Technology companies are far more desirous of public company
status and are therefore more accepting of a non-cash transaction than insurance
companies. This method of growth is acceptable to Viking management. The Company
is actively reviewing acquisition candidates as the most expedient way to
increase shareholder value and move the Company forward. The Company has also
considered the spin-off of one or more of its subsidiaries to unlock shareholder
value.
-10-
<PAGE>
Material Changes in Financial Condition, Liquidity and Capital Resources
The Company is pursuing and intends to continue to pursue its full business
plan. On the insurance acquisition front, the Company continues to be solicited,
and continues to entertain such solicitations, by various state and local
government entities to place future acquired insurance company administrative
operations in their state or local area. The Company is seeking economic
incentive packages in the $20 to $30 million range in incentives and grants from
such entities. It is anticipated that this administrative business will employ
between 1,200 and 1,450 people. The Company has also been solicited by various
money managers to manage our future insurance company portfolios. The Company
has currently required that soliciting money managers must also be willing to
take an equity position in the Company. Such discussions are ongoing. If the
Company is successful in implementing its plan of operations, the Company will
be required to lease, acquire, or construct significant additional facilities
and equipment and hire substantial additional employees to carry out such
operations.
In connection with its efforts to attract capital and implement its plan of
business, the Company incurred losses for the quarters ended March 31, 2000 and
1999, of $443,005 and $488,338 respectively. The Company generated $12,393 in
revenue related to the sale of Video Conferencing PCs and a specialty Multimedia
board for PCs. The decrease in losses for the current quarter was due primarily
to decreased consulting costs reflecting attempts to reduce costs overall.
At March 31, 2000, the Company had cash on hand of $54,007, current assets of
$131,442 including cash and $8,850 in accounts receivable, total assets of
$1,024,369 and liabilities totaling $567,923 excluding accrued officer's salary
of $1,017,560. After March 31, 2000 the Company received additional cash in the
amount of $22,000 via private sale of restricted common stock. The Company
anticipates that the funds on hand will not sustain current operations beyond
the next six months and are not sufficient to implement any of the Company's
full plan of operations. Accordingly, in order to sustain operations past such
period and to implement the Company's full plan of operations, the Company must
secure additional funds. There can be no degree of assurance that the Company
will be successful in securing additional funds. If the Company is successful in
implementing its full plan of operations, the Company will be required to lease,
acquire or construct significant additional facilities and equipment and hire
substantial additional employees to carry out such operations.
-11-
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities
Prior to and during the quarter ended March 31, 2000, the Company sold common
restricted shares (Class A Common) in a private placement under exemption from
registration under the Securities Act pursuant to Section 4(2) and Regulation D,
Rule 506. Sales have been made to accredited investors only. On November 2, 1999
the first sale of this private placement of up to $500,000 was consummated. As
of 5/08/00, $500,000 of this private placement have been sold representing
1,666,667 common restricted shares at $0.30 per share and options to purchase an
additional 833,333 common restricted shares at $0.45 per share or 1.5 times the
original price paid for the common restricted shares. In summary for the
quarter, 1,207,499 common restricted shares were purchased for cash, 555,891
common restricted shares were issued for services rendered at values ranging
from $0.25 per share to $0.30 per share and 100,000 common restricted shares
were purchased pursuant to exercise of an option at $0.20 per share. These
shares were issued under exemption from registration pursuant to Section 4(2)
and/or Regulation D, Rule 506.
Item 5. Other Information
The Company's common stock trades on the OTC Electronic Bulletin Board.
Its symbol is "VGCP".
Company information can be found on the World Wide Web. The address is
www.vcgi.com.
Item 6. Exhibits and Reports
Exhibit 21.1 List of subsidiaries of the Registrant
Exhibit 27.1 Financial Data Schedule
-12-
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.1
21.1 List of Subsidiaries of the Registrant
27.1 Financial Data Schedule
-13-
<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.
VIKING CAPITAL GROUP, INC.
Dated: May 12, 2000 By: /s/ William J. Fossen
---------------------------------
William J. Fossen, President
Dated: May 12, 2000 By: /s/ Matthew W. Fossen
---------------------------------
Matthew W. Fossen
Chief Financial Officer
-14-
EX-21.1
Subsidiaries of the Registrant
EXHIBIT 21.1
Viking Capital Group, Inc. and Subsidiaries
List of subsidiaries of the registrant
The following are current subsidiaries of Registrant.
Subsidiary and Name Under Which Business is Done Where Organized
- ------------------------------------------------ ---------------
Viking Capital Financial Services, Inc. Texas
Viking Insurance Services, Inc. Texas
Viking Systems, Inc. Texas
Viking Administrators, Inc. Texas
NIAI Insurance Administrators, Inc. California
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENT OF THE COMPANY AS OF MARCH 31, 2000 INCLUDED IN THE 10QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10QSB
</LEGEND>
<CIK> 0000886093
<NAME> VIKING CAPITAL GROUP, INC
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 54007
<SECURITIES> 0
<RECEIVABLES> 201657
<ALLOWANCES> 124222
<INVENTORY> 0
<CURRENT-ASSETS> 131442
<PP&E> 952177
<DEPRECIATION> 144277
<TOTAL-ASSETS> 1024369
<CURRENT-LIABILITIES> 1575110
<BONDS> 10373
0
0
<COMMON> 33992
<OTHER-SE> (595106)
<TOTAL-LIABILITY-AND-EQUITY> 1024369
<SALES> 12393
<TOTAL-REVENUES> 22084
<CGS> 10914
<TOTAL-COSTS> 443772
<OTHER-EXPENSES> 3065
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7338
<INCOME-PRETAX> (443005)
<INCOME-TAX> 0
<INCOME-CONTINUING> (443005)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (443005)
<EPS-BASIC> (0.014)
<EPS-DILUTED> (0.014)
</TABLE>
