<PAGE> 1
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 quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-22808
PACIFIC RIM ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4374983
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
401 City Avenue, Suite 319
Bala Cynwyd, Pennsylvania 19004
(Address of principal executive offices) (Zip Code)
(610) 660-5755
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 .
- -
Number of shares of Common Stock outstanding as of the latest practicable date:
3,720,000
Number of Redeemable Warrants outstanding as of the latest practicable date:
146,554
<PAGE> 2
PACIFIC RIM ENTERTAINMENT, INC.
FORM 10-QSB
SEPTEMBER 30, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION 3
ITEM 1 Consolidated condensed unaudited financial statements 3
ITEM 2 Management's Discussion and Analysis or Plan of Operation 9
PART II - OTHER INFORMATION 11
ITEM 2 Changes in Securities and Use of Proceeds 11
ITEM 4 Submission of Matters to a Vote of Security Holders 13
ITEM 6 Exhibits and Reports on Form 8-K 14
SIGNATURES 14
EXHIBIT Financial Data Schedule (Filed electronically only)
</TABLE>
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED CONDENSED UNAUDITED FINANCIAL STATEMENTS
PACIFIC RIM ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Unaudited Audited
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
ASSETS
Cash $ 12,345 0
Film costs inventory, net (Note 2) 0 $ 500,000
Advance to Net Value, Inc. (Note 6) 35,000 0
Fixed assets, net 0 6,667
------------ ------------
TOTAL CURRENT ASSETS $ 47,345 $ 506,667
============ ============
LIABILITIES AND STOCK HOLDERS DEFICIT
Liabilities:
Accounts payable and accrued expenses (Note 8) $ 0 $ 887,737
Payable to related parties (Note 5) 25,200 323,650
Notes payable (Note 4) 450,000 0
------------ ------------
TOTAL CURRENT LIABILITIES $ 475,200 $ 1,211,387
============ ============
Stockholder's Deficit:
Common stock subscribed (123,080 shares) See Note 8 1,231 0
Common Stock, authorized 10,000,000 shares, par value
$.01 per share, 22,488 and 22,488 shares issued and outstanding as of
Sept. 30, 1997 and December 31, 1996 (NOTE 5 & 8) 225 225
Additional paid-in-capital 12,938,531 11,754,762
Accumulated deficit (13,367,842) (12,459,071)
------------ ------------
TOTAL STOCKHOLDER'S DEFICIT (427,855) (704,083)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 47,345 $ 506.667
============ ============
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART HEREOF
3
<PAGE> 4
PACIFIC RIM ENTERTAINMENT, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30 (UNAUDITED)
<TABLE>
<CAPTION>
9 mos. 3 mos. 9 mos. 3 mos.
1997 1997 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating Revenues $ 0 $ 0 $ 0 $ 0
Investment Losses (Note 2) (700,000) (400,000) 0 0
Compensation (100,000) (100,000) 0 0
Selling, general and administrative (90,772) (70,496) (86,033) (44,000)
--------- --------- --------- --------
Operating Loss (890,772) (570,496) (86,033) (44,000)
Interest expense (18,000) (9,000) (18,000) 6000
--------- --------- --------- --------
Loss before tax (908,772) (579,496) (104,033) (50,000)
Provision for California franchise tax $ 0 $ 0 $ 0 $ 0
--------- --------- --------- --------
Net loss (908,772) (579,496) (104,033) (50,000)
========= ========= ========= ========
Net loss per share ($40.41) ($25.76) ($4.62) ($2.22)
Weighted average shares outstanding 22,488 22,488 22,488 22,488
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART HEREOF
4
<PAGE> 5
PACIFIC RIM ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
Unaudited
1997 1996
---- ----
<S> <C> <C>
Cash Flow from Operating Activities:
Net Loss ($908,772) ($104,033)
Adjustments to Reconcile Net Loss to Net Cash
Used for Operating Activities:
Depreciation and Amortization 0 2500
Film Cost Write Down (Note 2) 300,000
Write-off investment in NSE(Note 2) 400,000
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Accounts payable
and accrued expenses (419,083) 101,533
--------- ---------
Net Cash Used for Operating Activities (627,855) 0
Cash Flows from Financing Activities:
Proceeds from notes payable (Note 5) 25,200
Proceeds from secured notes payable to Investors(Note 4) 450,000
---------
Net cash provided by Financing Activities 475,200
=========
Cash Flows from Investing Activities:
Investment in Net Value (35,000)
Sale of film investment (Note 2) 200,000
---------
Net Cash used in Investing Activities 165,000
=========
Net Increase in Cash 12,345 0
Cash at beginning of Period 0 0
Cash at end of Period $12345
---------
Supplemental Cash Flow Information:
Taxes Paid $ 0 0
========= =========
Interest Paid $ 0 0
========= =========
</TABLE>
Subsequent to the quarter, the Company issued 123,080 shares of common stock in
settlement of approximately $1,185,000 in payables.
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART HEREOF
5
<PAGE> 6
PACIFIC RIM ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE TWO YEARS AND NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
Common Stock Common Common Additional Paid Accumulated Total
Shares Subscribed to Capital Deficit
------ ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance-12-31-95
After reverse split 22,488 $225 11,754,762
====== ==== ==========
Balance-
12-31-96 22,488 $225 11,754,762 (12,459,070) (704,083)
Discharge of Debt 0 0 1,231 1,183,769 1,185,000
(Note 8)
Net Loss for the
Period ( 908,772) (908,772)
------------ ----------
Balance 9-30-97 22,488 $225 $1,231 $12,938,531 ($13,392,842) ( $452,855)
====== ==== ====== =========== ============= ===========
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENT ARE AN INTEGRAL PART HEREOF
6
<PAGE> 7
PACIFIC RIM ENTERTAINMENT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
The accompanying unaudited consolidated condensed financial statements of
Pacific Rim Entertainment, Inc. (a Delaware corporation), and subsidiaries
(collectively the "Company"), in the opinion of management, reflect all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the financial statements for such interim periods. Interim
results are not necessarily indicative of results for a full year.
Certain information and disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted (in accordance with the Securities and Exchange Commission
(the "SEC") rules pertaining to Form 10-QSB). It is suggested that these
consolidated condensed financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
annual report on Form 10-KSB for the fiscal year ended December 31, 1996 (the
"Form 10-KSB"), which was filed by the Company with the SEC on April 12, 1997 in
accordance with the Securities Exchange Act of 1934, as amended.
NOTE 2 - INVESTMENT LOSSES
Investment in film inventory at December 31, 1996 consisted of:
<TABLE>
<CAPTION>
<S> <C>
Costs incurred-unreleased film 2,634,000
Less valuation reserve (2,134,000)
----------
$ 500,000
==========
</TABLE>
At June 30, 1997, the Company took an additional loss provision of $300,000 in
anticipation of the disposition of these film properties. On August 22, 1997,
the Company sold all rights and materials related to film inventory for $200,000
cash. Accordingly, no gain or loss was recognized in the quarter ended September
30, 1997.
In August 1997, the Company terminated its May 1997 merger agreement with NSE
Technologies, Inc. ("NSE") whereby NSE was to be the principal business of the
Company. Upon termination the Company also discharged NSE of its obligation to
repay a $400,000 cash advance. Therefore, such transaction is reflected as an
investment loss as of September 30, 1997.
NOTE 3 - EARNINGS PER SHARE
The computation of the shares outstanding for the period is based on the
weighted average number of shares outstanding during the period. Warrants
outstanding have not been included in the earnings per share calculation as the
effect of their inclusion would be anti-dilutive.
NOTE 4 - PRIVATE PLACEMENT - SENIOR NOTES
On June 5, 1997, the Company completed a private placement offering in which it
sold $450,000 in principal amount of its 8% Senior Secured Notes and Warrants to
purchase additional shares of its Common stock for an aggregate purchase price
of $450,000. These notes are secured by a security interest in all of the
Company's property. From the proceeds of the offering, the Company advanced
$400,000 to NSE for working capital. (See Note 2) Subsequently, during December
1997, the warrants
7
<PAGE> 8
were surrendered by the holders in exchange for the issuance by the Company of
180,000 shares of its common stock.
NOTE 5 - - PRIVATE PLACEMENT
The Company completed two separate private offerings during the quarter ended
September 30, 1997, pursuant to which subscriptions were received for the
issuance of an aggregate of 2,520,000 post-split shares of its common stock. The
Company subsequently determined that it had insufficient authorized shares to
effectuate the offerings since they were completed prior to the reverse split
that became effective on October 31, 1997. (See Note 7) The investors in the
private offerings agreed to rescind their subscriptions in exchange for the
Company agreeing to repay all funds received (approximately $25,200) on a short
term basis.
NOTE 6 - - ADVANCE TO NET VALUE The Company advanced $35,000 to Net Value, Inc.
That advance was repaid to the Company in the fourth quarter.
NOTE 7 - - AMENDMENT TO CERTIFICATE OF INCORPORATION On November 21, 1997, the
Company amended its certificate of incorporation in order to reflect a 200 for 1
reverse stock split. The purpose of the amendment was to give legal effect to
two separate reverse splits which the Company's board of directors previously
approved, but which were determined to be invalid because stockholder approval
of amendments to the certificate of incorporation giving effect to the prior
reverse splits was never obtained and such amendments were never filed with the
Secretary of State of the State of Delaware.
NOTE 8 - - SUBSEQUENT EVENTS Subsequent to the quarter ended September 30, 1997,
the Company engaged in a number of material transactions:
a. The Company issued 123,000 shares of common stock in exchange for the
cancellation of over $1,185,000 of the Company's indebtedness;
b. The Company issued 3,185,080 shares in a private placement transaction to a
number of accredited investors at a price of $0.10 per share;
c. The Company entered into an Agreement and Plan of Reorganization on Nov. 5,
1997 to acquire Osage Computer Group, Inc. ("Osage"). The purchase price for the
acquisition of Osage consists of (i) $500,000 in cash; (ii) 1,100,000 shares of
common stock; (iii) $1.5 million face amount of preferred stock; and (iv)
800,000 options to purchase additional shares of the Company's common stock.
Also as part of the acquisition the Company agreed to issue 200,000 shares of
its common stock to an individual who had agreed to serve as an executive of
Osage. The shares vest 50% at the end of the first year of employment and 50%
after the end of the second year of employment.
8
<PAGE> 9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in
conjunction with the Company's financial statements and notes thereto. All per
share figures give effect to a one for two hundred share reverse stock split
approved by the Board of Directors during 1996, and more recently approved by
the Stockholders during the third quarter of 1997. An amendment to the Company's
Certificate of Incorporation reflecting the reverse split became effective on
November 21, 1997.
The Company was organized under the laws of Delaware in 1992.
From 1992 through 1995, the Company had been engaged principally in the animated
film production business. After several years of losses following its initial
public offering in 1993, the Company suspended its business operations in 1996
and has since then remained inactive while seeking to identify business
opportunities that would capitalize on its position as a public company. Towards
that end, management has examined a number of industries and conducted due
diligence on a number of private companies that may be suitable as an
acquisition target.
In May 1997, the Company entered into an Agreement and Plan of
Merger to acquire a Texas-based network integration business. Following a period
in which a due diligence examination was conducted, management elected to
terminate this agreement during October 1997.
Thereafter, on November 5, 1997, the Company entered into an
Agreement and Plan of Merger to acquire Osage Computer Group, Inc. ("Osage"), a
Phoenix, Arizona based provider of computer systems integration services and
products that provide network computing solutions. Pursuant to the Merger, the
Company is anticipated to acquire Osage in December 1997 for a purchase price
consisting of: (i) $500,000 in cash; (ii) 1,100,000 shares of common stock;
(iii) options to purchase an additional 800,000 shares of common stock; and (iv)
$1.5 million face amount of preferred stock. Closing of the Merger is contingent
upon satisfaction of certain conditions, including: (i) the settlement of all of
the Company's outstanding past trade indebtedness; and (ii) the completion of a
private offering which provides the Company with net cash proceeds, after
application of funds, of no less than $2.55 million. Towards that end, the
Company is presently offering in a private placement transaction an aggregate of
$3.66 million face amount of convertible preferred stock to accredited
investors.
There can be no assurances that the Merger will be completed.
If the Merger fails to close, the Company will remain inactive while it
continues to identify acquisition alternatives. If the Merger is completed,
management will resign and the Company will assume the historic operations
conducted by Osage, whose management will be appointed as the executive officers
of the Company.
RESULTS OF OPERATIONS.
During the nine months ended September 30, 1997, the Company
incurred a net
9
<PAGE> 10
loss of $908,772. This compares to a net loss of $104,033 for the equivalent
prior year period. During the quarter ended September 30, 1997, the Company
incurred a net loss of $579,496, as compared to a net loss of $50,000 for the
equivalent prior year period.
The increase in losses incurred by the Company during the
three and nine month periods ended September 30, 1997, is not reflective of a
trend towards higher losses. Rather, it reflects a significant amount of
investment losses realized during the quarter as the Company liquidated its
investment in film library and wrote-off a $400,000 loan made to a Texas-based
company in connection with a terminated merger transaction and incurred expenses
in connection with its attempt to complete the Osage transaction. The Company
also paid $100,000 to Steven B. Rosner, its current president, in return for
services for over one year by Mr. Rosner in connection with the financial and
administrative reorganization of the Company.
The results of operations of the Company for the three and
nine months ended September 30, 1997 are not reflective of the anticipated
operations of the Company should it complete the acquisition of Osage, at which
time, the Company would assume the historic operations of Osage. Should the
acquisition of Osage occur, as to which there can be no assurances, the Company
would file a Current Report on Form 8-K with the Securities and Exchange
Commission which would include certain historic financial statements of Osage.
Liquidity and Capital Resources.
At September 30, 1997, the Company's assets consisted solely
of a minimal amount of cash and an advance to a third party. This reflects a
reduction in assets from recent periods as during the quarter the Company
disposed of its investment in film library and wrote-off a $400,000 loan made to
a Texas-based company in connection with a terminated merger transaction.
At September 30, 1997, the Company's principal liabilities
consisted of approximately $25,200 in short-term notes; and $450,000 owed in the
form of 8% bridge notes issued in connection with the Company's terminated
merger transaction.
During the second quarter of 1997, the Company completed a
private placement of $450,000 in 8% Senior Secured Notes and Warrants to
purchase additional shares of common stock. The Notes were secured by all of the
Company's assets. Subsequently, during the fourth quarter of 1997, the holders
of the Notes agreed to extend the maturity date of the Notes and to exchange
their Warrants in exchange for 180,000 shares of common stock.
Subsequent to the quarter ended September 30, 1997, material
improvements in the Company's liquidity and capital resources were realized as
the Company: (i) completed the reorganization and settlement of principally all
of its outstanding trade payables through the issuance of 123,083 shares of its
common stock; and (ii) completed a private placement of 3,185,080 shares of its
common stock, which provided an additional $318,000 of working capital.
10
<PAGE> 11
Subsequent to the quarter ended September 30, 1997, the
Company signed an Agreement and Plan of Merger to acquire Osage. To secure
sufficient capital to satisfy one of the conditions to the acquisition, the
Company has also commenced a private offering of $3.66 million face amount of
preferred stock.
The Company intends to satisfy its obligations to the holders
of the Senior Secured Notes through the proceeds provided by the private
placement transaction, if completed. If the transaction is not completed, the
Company will have to seek alternative financing to continue as a going concern.
PART II - OTHER INFORMATION.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(a) During the quarter ended September 30, 1997 the registrant
offered and sold the following securities in private placement transactions that
were exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act") in reliance on Section 4(2) and Regulation D promulgated
thereunder:
(i) The registrant sold units consisting of Senior
Secured 8% Notes and Common Stock Purchase Warrants for proceeds of $450,000 to
the following individuals:
<TABLE>
<CAPTION>
Name Principal Amount
---- ----------------
<S> <C>
The Elanken Family Trust 65,000.
Elliot Braun 25,000.
Robert Brvenik 20,000.
Bernard Buchwalter 40,000.
Dune Holdings, Inc. 100,000.
Richard Friedman 75,000.
Jeffrey Markowitz 75,000.
Anthony Kamin 50,000.
</TABLE>
(b) During the quarter ended December 31, 1997, the registrant offered
and sold the following securities in private placement transactions that were
exempt from the registration requirements of the Act in reliance on Section 4(2)
and Regulation D promulgated under the Act:
11
<PAGE> 12
(i) The registrant exchanged shares of common stock with
holders of approximately $1,185,000 of trade payables:
<TABLE>
<CAPTION>
Name Shares Principal Amount of Debt
---- ------ ------------------------
<S> <C> <C>
Burt Ahrens 3,293 $ 32,932.
Arthur Anderson 2,267 45,349.
Robert Brvenik 6,500 6,500.
Catalina Plastics 3,500 40,826.
Stan Freberg 1,000 ***
Richard Friedman 5,000 5,000.
Anthony Kamin 5,000 5,000.
Sy Leslie 3,293 32,932.
Alan Livingston 21,730 217,298.
Christopher Livingston 2,500 ***
Jeffrey Markowitz 5,000 5,000.
Frank Piazza 2,500 ***
Robert Poulson 15,000 ****
Jason Rabinovitz 1,500 15,000.
R.R. Donnelly Co. 11,000 203,168.
Rubin Baum Levin Constant
Friedman 7,500 115,000.
Richard Someck 6,500 6,500.
Ike Suri 15,000 *****
</TABLE>
***Shares were issued in exchange for the Copyright and Music Rights to the
animation product.
****Shares issued in exchange for legal services provided to the Company.
*****Shares were issued in exchange for services rendered to the Company, as an
officer and director.
(ii) The registrant exchanged shares of common stock with
holders of Senior Secured 8% Notes and Warrants in exchange for extension of the
maturity dates of the Notes and surrender of the Warrants:
12
<PAGE> 13
(iii) The registrant issued 3,185,080 shares in a private
placement transaction for cash proceeds:
<TABLE>
<CAPTION>
Name Shares Purchase Price
---- ------ --------------
<S> <C> <C>
101 Investments, Inc. 5,000 $ 500.00
Howard & Shari Borenstein 15,000 1,500.00
Capital Growth Trust 180,000 18,000.00
Clifton Capital Ltd. 170,000 17,000.00
Cecile T. Coady 10,000 1,000.00
David M. Daniels 200,000 2,000.00
Diversified Investment Fund, L.P. 50,000 5,000.00
Jere Dumanic 50,000 5,000.00
Bermuda Trust Company 20,000 2,000.00
El Paso Holdings Ltd. 125,000 1,250.00
Bruce Ginsburg 15,000 1,500.00
Godwin Finance Ltd. 350,000 35,000.00
KAB Investments, Inc. 100,000 10,000.00
Michael Ibsen 20,000 2,000.00
Interbanc Mortgage Services, Inc. 200,000 20,000.00
Steven Levin 15,000 1,500.00
Millworth Investments, Inc. 175,000 1,750.00
Keith Myers 30,000 3,000.00
PRE Investors L.P. 641,692. 64,169.20
Steven B. Rosner 190,000 19,000.00
SPH Equities, Inc. 73,338 7,333.80
Chad Shusman 10,000 1,000.00
SPH Investments, Inc. Profit Sharing
Plan dtd 12/1/92 50,000 5,000.00
SPH Investments, Inc. 50,000 5,000.00
Harvey Sternberg 15,000 1,500.00
Synergy Group 250,000 25,000.00
West Tropical Investments Corp. 175,000 17,500.00
</TABLE>
(iv) The registrant issued 200,000 shares of its common stock
to Michael Glynn in connection with an employment agreement to be entered into
contingent upon completion of a Merger with Osage Computer Group, Inc. Fifty
(50%) percent of the shares are to be released upon Mr. Glynn's first
anniversary of employment and the remaining 50% upon his second anniversary of
employment.
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS.
On October 31, 1997, the Company distributed an Information Statement
to its stockholders of record as of October 21, 1997 pursuant to Section 14(c)
of the Securities
13
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Exchange Act of 1934. The purpose of the Information Statement was to inform the
holders of the Company's common stock of the approval by the Board of Directors
and the written consent of the holders of common stock entitled to cast at least
a majority of the votes entitled to be cast by the holders of common stock, of
an amendment to the Company's Certificate of Incorporation (the "Amendment")
pursuant to which each 200 shares of common stock outstanding on the effective
date of the Amendment shall be converted into one share of common stock. The
Amendment became effective when filed with the Secretary of State of Delaware on
November 21, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K
Form 8-K filed on September 8, 1997 regarding the Acquisition
or Disposition of Assets.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
Dated: December 18, 1997 PACIFIC RIM ENTERTAINMENT, INC.
---------------------------------
Registrant
/s/ STEVEN ROSNER
---------------------------------
Steven Rosner
President and member of the Board
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 12,345
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,345
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 47,345
<CURRENT-LIABILITIES> 475,200
<BONDS> 0
0
0
<COMMON> 225
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 47,345
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 700,000
<TOTAL-COSTS> 700,000
<OTHER-EXPENSES> 190,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,000
<INCOME-PRETAX> (908,772)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (908,772)
<EPS-PRIMARY> (40.41)
<EPS-DILUTED> (40.41)
</TABLE>
