<PAGE>
Securities & 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 quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-25764
OneLink Communications, Inc.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1675041
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
10340 Viking Drive, Suite 150
Eden Prairie, MN 55344
(Address of principal executive offices)
612-996-9000
(Issuer's telephone number)
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 [ ]
APPLICABLE TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 6,978,092 shares
outstanding as of 8/11/99, par value $.01 per share.
Transitional Small Business Disclosure Format (check one); YES [ ] NO [X]
<PAGE>
OneLink Communications, Inc.
Form 10-QSB
Quarter Ended June 30, 1999
Table of Contents
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I Financial Information 3
Item 1. Financial Statements (Unaudited)
Balance Sheets at December 31, 1998 and
June 30, 1999 3
Statements of Operations for the three and six months
ended June 30, 1999 and 1998 4
Statements of Cash Flows for the six months
ended June 30, 1999 and 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operations 6
PART II Other Information 11
Item 1. Legal Proceedings 11
Item 4. Submission on Matters to a Vote of Security Holders 11
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Exhibit Index 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ONELINK COMMUNICATIONS, INC.
Balance Sheets
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(unaudited) 1998
---------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $1,258,682 $420,600
Trade accounts receivable, net of allowance for
doubtful accounts of $10,276 in 1999 and $10,000 in 1998 389,009 203,798
Computer parts and supplies, net of reserve for
obsolescence of $3,000 in 1999 and $0 in 1998 11,402 12,751
Prepaid expenses 33,792 14,190
------------ --------------
Total current assets 1,692,885 651,339
------------ --------------
Property and equipment:
Furniture and equipment 1,043,216 628,475
Accumulated depreciation (442,748) (359,334)
------------ --------------
600,468 269,141
------------ --------------
Other assets:
Deposits 11,524 14,916
------------ --------------
11,524 14,916
------------ --------------
Total Assets 2,304,877 935,396
============ ==============
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $230,194 $149,047
Current maturities of long-term debt 0 3,414
Deferred revenue 51,530 2,700
Other accrued liabilities 331,407 422,157
------------ --------------
Total current liabilities 613,131 577,318
------------ --------------
Long-term debt, net of current maturities -- --
Shareholders' equity:
Common stock, par value $.01 per share, Authorized shares--
50,000,000; Issued and outstanding shares: 1999
and 1998--6,966,092 and 5,015,607, respectively 69,661 50,156
Additional paid-in capital 10,340,239 8,491,886
Accumulated deficit (8,718,154) (8,183,964)
------------ --------------
Total shareholders' equity 1,691,746 358,078
------------ --------------
Total liabilities and shareholders' equity $2,304,877 $935,396
============ ==============
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
ONELINK COMMUNICATIONS, INC.
Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1999 1998 1999 1998
--------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $409,117 $399,454 $886,661 $676,622
Cost of revenues 233,084 258,862 517,929 449,100
--------------------------------------------------------
Gross profit 176,033 140,592 368,732 227,522
--------------------------------------------------------
Operating expenses:
Selling 114,563 112,099 216,626 233,626
General and administrative 324,876 319,515 640,682 637,305
Research and development 32,052 0 64,102 0
--------------------------------------------------------
Total operating expenses 471,491 431,614 921,410 870,931
--------------------------------------------------------
Operating loss from continuing operations (295,458) (291,022) (552,678) (643,409)
Interest income 14,251 6,443 18,509 17,110
Interest expense 0 (669) (21) (1,595)
Other expense 0 231 0 (19,842)
--------------------------------------------------------
Loss from continuing operations (281,207) (285,017) (534,190) (647,736)
Discontinued operations:
Discontinued operations income 0 36,990 0 57,682
Loss on disposal of assets from discontinued 0 (883) 0 (72)
operations
Net loss $(281,207) $(248,910) $(534,190) $(590,126)
========================================================
Net loss from continuing operations per common share:
Basic and Diluted $(0.04) $(0.06) $(0.09) $(0.13)
Net loss per common share:
Basic and Diluted $(0.04) $(0.05) $(0.09) $(0.12)
Weighted average number of shares outstanding (Basic and Diluted) 6,932,947 4,993,454 5,919,334 4,992,580
</TABLE>
4
<PAGE>
ONELINK COMMUNICATIONS, INC.
Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1999 1998
--------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Loss $(534,190) $(590,126)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization of goodwill 83,413 135,813
Net gain on sale of property and equipment -- 72
Changes in operating assets and liabilities:
Accounts receivable (185,211) (222,371)
Minimum lease pmts receivable -- 17,100
Computer parts and supplies 1,349 (40,185)
Prepaid expenses and deposits (16,210) (27,750)
Accounts payable and accrued expenses (11,075) 96,863
Deferred revenue 48,830 (16,091)
--------------- ----------------
Net cash used in operating activities (613,094) (646,675)
--------------- ----------------
INVESTING ACTIVITIES:
Sale of property and equipment 0 124,000
Purchases of property and equipment (414,741) (14,045)
--------------- ----------------
Net cash used in investing activities (414,741) 109,955
--------------- ----------------
FINANCING ACTIVITIES:
Proceeds from issuance of stock options 51,048 2,500
Payments on contingent notes payable (71,048) (2,500)
Proceeds from warrants excercised 1,887,857 --
Payments on short-term and long-term notes payable (1,940) (19,258)
--------------- ---------------
Net cash (used) provided by financing activities 1,865,917 (19,258)
--------------- ---------------
Increase/(Decrease) in cash and cash equivalents 838,082 (555,978)
Cash and cash equivalents at beginning of period 420,600 1,074,556
--------------- ---------------
Cash and cash equivalents at end of period $1,258,682 $518,578
=============== ===============
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
OneLink Communications, Inc.
Notes to Financial Statements
June 30, 1999
(Unaudited)
NOTE. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
INTERIM FINANCIAL INFORMATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to
such rules and regulations. Operating results for the six months ended June
30, 1999 are not necessarily indicative of the results that may be expected
for the year ending December 31, 1999. The accompanying financial statements
and related notes should be read in conjunction with the audited financial
statements of the Company, and notes thereto, for the fiscal year ended
December 31, 1998, included in the Company's Form 10-KSB for the year ended
December 31, 1998 and the Company's 1998 Annual Report to Shareholders.
The financial information furnished reflects, in the opinion of management,
all adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the results of the interim periods presented.
RECLASSIFICATIONS
Certain prior year items have been reclassified to conform with the 1999
presentation. The reclassifications had no effect on net loss or
shareholders' equity.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The accompanying management's discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction
with Management's Discussion and Analysis of Financial Condition and Results
of Operations and the audited financial statements of the Company, and notes
thereto, for the fiscal year ended December 31, 1998, included in the
Company's Form 10-KSB for the year ended December 31, 1998 and the Company's
1998 Annual Report to Shareholders.
6
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain Statements of Operations data as a
percentage of revenues.
<TABLE>
<CAPTION>
SIX SIX
SECOND SECOND MONTHS MONTHS
QUARTER QUARTER ENDED ENDED
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 57.0 64.8 58.4 66.4
Gross profit 43.0 35.2 41.6 33.6
Operating expenses:
Selling 28.0 28.1 24.4 34.5
General & administrative 79.4 80.0 72.3 94.2
Research & development 7.8 0.0 7.2 0.0
Total operating expenses 115.2 108.1 103.9 128.7
Other income (expense) 3.5 1.5 2.1 (0.6)
Loss from continuing operations (68.7) (71.4) (60.2) (95.7)
Discontinued operations income 0.0 9.3 0.0 8.5
Loss on disposal of assets from
discontinued operations 0.0 (0.2) 0.0 (0.0)
Net loss (68.7)% (62.3)% (60.2)% (87.2)%
</TABLE>
REVENUES FROM CONTINUING OPERATIONS
The Company's revenues from continuing operations of $409,117 increased
$9,663 or 2% for the three months ended June 30, 1999 compared to $399,454
for the three months ended June 30, 1998. The Company's revenues for the six
month period ending June 30, 1999 were $886,661, an increase of $210,039 or
31% from the same period in 1998. The increase in revenue is primarily
attributed to the service bureau operations of the Company's TeleSmart-TM- Data
Services. The service bureau revenues have increased by approximately
$445,000 for the six months ended June 30, 1999 compared to the same period
in 1998, due to increased processing of calls. The service bureau began
processing calls in the beginning of 1998. Revenues from the software product
increased by approximately $32,000 for the same period. These increases were
offset by a decrease in consulting revenues by approximately $270,000.
Consulting revenues in the first six months of 1998 included the final
development stages for U S West, the initial customer, consulting revenues
for the preparation of Cincinnati Bell Telephone for using the service bureau
and enhancements to the initial product offered. At the end of the second
quarter in 1999, the Company signed an additional consulting agreement with a
Midwestern Regional Bell Operating Company for the preparation of their
systems for using the service bureau.
COST OF REVENUES FROM CONTINUING OPERATIONS
The Company's cost of revenues from continuing operations of $233,084
decreased $25,778 or 10% for the three months ended June 30, 1999 compared to
$258,862 for the three months ended June 30, 1998. For the six month period
ending June 30, 1999, the Company's cost of revenues of $517,929 increased
$68,829 or 15% compared to $449,100 for the six months ended June 30, 1998.
The decrease in cost of sales for the second quarter is primarily attributed
to a reduction in the cost of revenues for the consulting business of
approximately $140,000. These costs were offset by increased costs from the
expanded operation of the service bureau of approximately $88,000 and the
development of a new version of the Call Graphics software with a cost of
approximately $20,000.
7
<PAGE>
The Company's gross margin for the three months ended June 30, 1999 increased
to 43% compared to 35% for the same period in 1998. This increase is a result
of a change in the mix of business. Gross margin percentage for the service
bureau is higher than the gross margin percentage for the consulting business
due to the higher personnel costs in the consulting business.
SELLING EXPENSES FROM CONTINUING OPERATIONS
The Company's selling expenses from continuing operations of $114,563
increased $2,464 or 2% for the three months ended June 30, 1999 compared to
$112,099 for the three months ended June 30, 1998. For the six month period
ending June 30, 1999, the Company's selling expenses of $216,626 decreased
$17,000 or 7% compared to $233,626 for the same period ending June 30, 1998.
The decrease in selling expenses is a result of lower personnel expenses of
approximately $62,000 and lower travel expenses by approximately $14,000.
These reductions were offset by an increase in marketing expenses of
approximately $57,000.
GENERAL AND ADMINISTRATIVE EXPENSES FROM CONTINUING OPERATIONS
The Company's general and administrative expenses from continuing operations
of $324,876 increased $5,361 or 2% for the three months ended June 30, 1999
compared to $319,515 for the three months ended June 30, 1998. For the six
month period ending June 30, 1999, the Company's general and administrative
expenses of $640,682 increased $3,377 or 0.5% compared to $637,305 for the
same period ending June 30, 1998. Personnel costs increased by approximately
$27,000 while professional fees decreased by approximately $26,000 for the
six months ended June 30, 1999 compared to the same period in 1998.
RESEARCH AND DEVELOPMENT EXPENSES FROM CONTINUING OPERATIONS
The Company incurred $32,052 in research and development expenses for the
three months ended June 30, 1999, and incurred no research and development
expenses for the three months ended June 30, 1998. For the six month period
ending June 30, 1999, the Company incurred $64,102 in research and
development expenses. The Company incurred no research and development costs
for the same period ending June 30, 1998. The research and development costs
incurred in 1999 are related to the new web-enabling product for the
TeleSmart Data Services. A prototype was completed in the second quarter of
1999. Since the development of the prototype, all costs associated with the
web-enabling product have been capitalized. In the first six months of fiscal
year 1998, the Company was not required to make research and development
investments to grow the business. Under the Company's revised business model,
development projects and product enhancements are generally paid for by the
customer requesting the change.
OTHER INCOME AND EXPENSE FROM CONTINUING OPERATIONS
Interest income of $14,251 increased $7,808 or 121% for the three months
ended June 30, 1999 compared to $6,443 for the three months ended June 30,
1998. For the six month period ending June 30, 1999, the Company's interest
income increased to $18,509 compared to $17,110 for the same period ending
June 30, 1998. The increase is a result of the increase in cash and cash
equivalents held by the Company during the three-month period ended June 30,
1999. Cash and cash equivalents on June 30, 1999 were
8
<PAGE>
$1,258,682 compared to $518,578 on June 30, 1998. The increase in cash and
cash equivalents is a result of the Company receiving proceeds in the first
quarter of 1999 of $1,900,000 through the calling of the warrants originally
issued in connection with the private placement of its stock in September of
1997 (the "Private Placement").
The Company had no interest expense for the three months ended June 30, 1999
compared to $669 for the three months ended June 30, 1998. For the six month
period ending June 30, 1999, the Company's interest expense decreased to $21
compared to $1,595 for the same period ending June 30, 1998. The decrease is
a result of the elimination of the bridge loans outstanding.
The Company had no other income or expenses for the three months ended June
30, 1999 compared to $231 of other income for three months ended June 30,
1998. There was also no other income or expenses for the six month period
ending June 30, 1999 compared to other expenses of $19,842 for the same
period ending June 30, 1998. The expense in 1998 was primarily the result of
the Company's negotiation, during the first quarter of 1998, of an out of
court settlement of $20,000 for a lawsuit that began in 1996.
DISCONTINUED OPERATIONS INCOME
The Company had no discontinued operations in either the three or six months
ended June 30, 1999. For the three months ended June 30, 1998, the Company's
revenues from discontinued operations were $360,676, cost of revenues from
discontinued operations were $223,131, general and administrative expenses
from discontinued operations were $90,555, and other expenses from
discontinued operations was $10,000. For the six months ended June 30, 1998,
the Company's revenues from discontinued operations were $601,923, cost of
revenues from discontinued operations were $346,336, general and
administrative expenses from discontinued operations were $188,218, and other
expenses from discontinued operations were $9,687. Since the Company had made
the decision to exit the IVR business in early 1998, there were no expenses
incurred in 1998 for selling or research and development. The Company had
completely exited the IVR business by the end of fiscal year 1998.
NET LOSS
The Company incurred a net loss of $281,207 for the three months ended June
30, 1999 compared to a net loss of $248,910 for the three months ended June
30, 1998, representing an increased net loss of $32,297 or 13%. For the six
month period ending June 30, 1999, the Company's net loss was $534,190,
representing a decrease of $55,936 or 9% compared to a net loss of $590,126
for the same period ending June 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash of $1,258,682 and working capital of $1,079,754 as of
June 30, 1999. Cash used in operating activities during the three and
six-month period ended June 30, 1999 was $311,929 and $613,094, respectively.
Cash used in investing activities for the three and six month period ended
June 30, 1999 was $276,921 and $414,741, respectively. These include costs
for the development of the web-enabling product for the TeleSmart Data
Services. Financing activities in the first six months of 1999 included the
calling of the warrants issued as part of the 1997 Private Placement. The
calling of
9
<PAGE>
these warrants raised $1,900,000. On August 1, 1999, the Company called
160,000 warrants for redemption, to be effective as of September 1,
representing the balance of the warrants issued in the Private Placement.
Assuming all such warrants are exercised prior to the redemption date, the
Company expects to realize gross proceeds of approximately $240,000.
Management believes working capital will be sufficient to support the
Company's operating capital needs for at least the remainder of the current
fiscal year, assuming the Company is able to generate sufficient revenues and
control expenses during the remainder of fiscal year 1999. However, the
Company may consider raising additional capital to pursue additional
development of its' web-enabling product and an expanded marketing and sales
effort. There could be a significant range of costs associated with the
web-enabling product beyond its initial release due to the various
enhancement options available to the Company.
Management's projections with respect to the Company's ability to meet its
working capital requirements in fiscal year 1999 are based upon: (i)
generating sales that exceed the Company's 1998 sales; and (ii) avoiding any
significant increase in expenses. Failure to meet either of these objectives
could have a material adverse effect on the Company's business.
Although the Company believes it can increase its revenues and improve its
cash flow, there are no assurances that it will be successful in doing so. If
management determines that additional financing is desirable, there is no
assurance that additional capital will be available to the Company on
acceptable terms if at all. In order to obtain additional capital, the
Company may issue equity securities at a price that would result in dilution
to existing shareholders.
YEAR 2000 REVIEW
The Company has instituted a Year 2000 project to address the issue of
computer programs and embedded computer chips being unable to distinguish
between the year 1900 and the year 2000. In the fourth quarter of 1997, the
Company conducted a review of its systems and operations to identify the
impact of the Year 2000 issue. The review concluded that the software created
by the Company and the Company's internal operations will not require Year
2000 modifications. The total cost associated with testing to become Year
2000 compliant was not material to the Company's financial position.
The Company's key customers are the Regional Bell Operating Companies and
Independent Telephone Operating Companies. The Company's Year 2000 readiness
also depends upon Year 2000 compliance of the Company's key customers and
suppliers. The failure on the part of the Company's key customers or
suppliers to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. In addition, Year 2000 issues at key customers and prospects
could slow down the deployment or delay new product launches as they devote
more resources to Year 2000 issues. Such failures or delays could materially
and adversely affect the Company's results of operations, liquidity and
financial condition.
10
<PAGE>
Due to the general uncertainty inherent in the Year 2000 problem, resulting
in part from the uncertainty of the Year 2000 readiness of third-party
suppliers and customers, the Company is unable to determine at this time
whether the consequences of Year 2000 failures will have a material impact on
the Company's results of operations, liquidity or financial condition.
Under the "worst case scenarios", the Year 2000 problem may cause
interruptions in telephone services provided by the Company's customers.
Interruptions in telephone services and the information behind the services
could have a material adverse effect on the Company's business. However, the
occurrence and duration of such interruptions is beyond the Company's control
such that no effective contingency plan is available. The Company will
endeavor to have sufficient cash reserves to meet its expenses if a
short-term interruption in telephone services occurs, but there can be no
assurance such reserves will be available or will be sufficient.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934. All statements included herein
that address activities, events or developments that the Company expects,
believes or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature
thereof), business strategy and measures to implement strategy, competitive
strengths, goals, expansion and other such matters are forward-looking
statements. Actual events may differ materially from those anticipated in the
forward-looking statements. Important factors that may cause such a
difference include general economic conditions, changes in interest rates,
increased competition in the Company's market area, acceptance by
telecommunications customers and increased regulation of the
telecommunications industry in general. For additional information regarding
these and other factors, see the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1998.
11
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings.
ITEMS 2. THROUGH 3. NOT APPLICABLE
ITEM 4. SUBMISSION ON MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of the stockholders of the Company was held on May 25,
1999. At the Annual Meeting, all of management's nominees for directors as
listed in the proxy statement were elected with the following vote:
<TABLE>
<CAPTION>
Shares Voted "Withhold
Shares Voted "For" Authority For"
------------------ ----------------------
<S> <C> <C>
Ronald E. Eibensteiner 4,431,509 44,400
Paul F. Lidsky 4,431,509 44,400
Vin Weber 4,431,509 44,400
John F. Stapleton 4,431,509 44,400
Thomas M. Kieffer 4,431,509 44,400
</TABLE>
The stockholders approved the appointment of Lund Koehler Cox & Arkema, LLP
as independent public accountants for the current fiscal year by a vote of
4,463,109 shares in favor, with 12,300 shares against, and 500 shares
abstaining.
The stockholders approved the reservation of Seven Hundred Fifty Thousand
(750,000) additional shares for issuance to employees, officers, directors,
consultants, and others under the Company's 1994 Stock Option Plan by a vote
of 2,735,033 shares in favor, with 147,700 shares against, and 14,000 shares
abstaining.
ITEM 5. NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<S> <C>
11. Computation of Earnings Per Common Share
27. Financial Data Schedule
</TABLE>
(b) REPORTS ON FORM 8-K
The Company filed a report on Form 8-K on May 11, 1999. Such Form
reported the Company's Press Release dated May 6, 1999, which
contained the first quarter earnings for the Company.
12
<PAGE>
SIGNATURES
Pursuant to the registration 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.
ONELINK COMMUNICATIONS, INC.
(Registrant)
Date: August 12, 1999 BY: /s/ Paul F. Lidsky
President, Chief Executive Officer, and
Director (Principal Executive and Financial
Officer)
13
<PAGE>
EXHIBIT INDEX
OneLink Communications, Inc.
Form 10-QSB
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
11 Computation of Earnings Per Common Share
27 Financial Data Schedule (filed only in electronic format)
</TABLE>
14
<PAGE>
OneLink Communications Inc.
Exhibit 11
COMPUTATION OF EARNINGS PER COMMON SHARE
Net income (loss) per common share is calculated based on the net income or
net loss for the respective period and the weighted average number of common
shares outstanding during the period. Common Stock equivalents (options and
warrants) are anti-dilutive for the respective three and six month periods
ended June 30, 1999 and 1998.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,258,682
<SECURITIES> 0
<RECEIVABLES> 399,285
<ALLOWANCES> (10,276)
<INVENTORY> 11,402
<CURRENT-ASSETS> 1,692,885
<PP&E> 1,043,216
<DEPRECIATION> (442,748)
<TOTAL-ASSETS> 2,304,877
<CURRENT-LIABILITIES> 613,131
<BONDS> 0
0
0
<COMMON> 69,661
<OTHER-SE> 1,622,085
<TOTAL-LIABILITY-AND-EQUITY> 2,304,877
<SALES> 886,661
<TOTAL-REVENUES> 886,661
<CGS> 517,929
<TOTAL-COSTS> 517,929
<OTHER-EXPENSES> 921,410
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (21)
<INCOME-PRETAX> (534,190)
<INCOME-TAX> 0
<INCOME-CONTINUING> (534,190)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (534,190)
<EPS-BASIC> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
