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 quarterly period ended June 30, 1996
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 0-21864
Solar Energy Research Corp.
(Exact name of registrant as specified in its charter)
Colorado 84-0672714
-------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10075 E. County Line Road, Longmont, CO 80501
---------------------------------------------
(Address of principal executive offices)
(303) 772-3316
--------------
(Registrant's telephone number, including area code)
-------------------------------------------------------------
(Former name, former address and former
fiscal year if changed since last year)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
_______1,427,596 common shares outstanding as of August 2, 1996______
This document is comprised of 13 pages.
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Index
Part I Item 1. Financial Information Page
Consolidated, condensed balance sheets as of
June 30, 1996 and December 31, 1995..................... 2
Consolidated, condensed statements of
operations, six and three months ended
June 30, 1996 and 1995 and January 1, 1992
through June 30, 1996................................... 3
Consolidated, condensed statements of cash
flows, six months ended June 30, 1996 and
1995 and January 1, 1992 through June 30, 1996.......... 4
Notes to consolidated, condensed financial
statements.............................................. 6
Item 2. Plan of operation......................................... 10
Part II Other information
Item 1. Legal Proceedings......................................... 11
Item 2. Changes In Securities..................................... 11
Item 3. Defaults Upon Senior Securities........................... 11
Item 4. Submission Of Matters To A Vote Of
Security Holders........................................ 11
Item 5. Other Information......................................... 11
Item 6. Exhibits and Reports On Form 8-K.......................... 11
Signatures................................................................ 12
Exhibit................................................................... 13
-1-
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Part I. Item 1. Financial information
Consolidated, Condensed Balance Sheets
ASSETS
June 30, December 31,
1996 1995
------------ ------------
ASSETS
Cash.................................... $ 633 $ 12,509
Advance to merger candidate (Note E).... 40,000 40,000
Organization costs...................... 915 915
Deferred offering costs (Note F)........ - 500
------------ ------------
$ 41,548 $ 53,924
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable.......................$ 1,574 $ 4,228
Other current liabilities.............. 25,222 22,548
------------ ------------
Total liabilities.................... 26,796 26,776
------------ ------------
SHAREHOLDERS' EQUITY (Note D)
Common stock........................... 713,798 636,925
Other shareholders' deficit............. (699,046) (609,777)
------------ ------------
Total shareholders' equity............ 14,752 27,148
------------ ------------
$ 41,548 $ 53,924
============ ============
See accompanying notes to financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(A Development Stage Enterprise)
Consolidated, Condensed Statements of Operations
January 1, 1992
Six Months Ended Three Months Ended (Inception)
June 30, June 30, Through
----------------------- ------------------------ June 30,
1996 1995 1996 1995 1996
----------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
COSTS AND EXPENSES
General and administrative,
related parties, (Note B)................... $ 7,500 $ 4,456 $ 3,750 $ 4,456 $ 137,334
General and administrative.................... 17,154 22,687 6,896 18,950 51,186
Cost of proposed acquisition.................. 63,213 - 41,353 - 115,651
Interest expense.............................. 902 778 513 389 5,453
----------- ---------- ----------- ----------- ------------
88,769 27,921 52,512 23,795 309,624
NET LOSS........................................ $ (88,769) $ (27,921) $ (52,512) $ (23,795) $ (309,624)
----------- ---------- ----------- ----------- ------------
Weighted average shares outstanding............. 1,334,265 1,008,759 1,376,347 1,008,759 427,315
----------- ----------- ----------- ----------- ------------
Net loss per share.............................. $ (.07) $ (.03) $ (.04) $ (.02) $ (.72)
----------- ----------- ----------- ----------- ------------
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Consolidated, Condensed Statements of Cash Flows
January 1,
Six Months Ended 1992
June 30, Through
------------------------- June 30,
1996 1995 1996
------------ ------------ ------------
Cash flows from operating
activities:
Cash used in operating
activities................. $ (83,249) $ (3,044) $ (165,740)
------------ ------------ ------------
Cash flows from financing
activities:
Contributed capital ....... - 3,044 -
Offering costs incurred
(Note F)................. (500) - (500)
Sale of common stock
(Note D)................. 71,873 - 166,873
------------ ------------ ------------
Cash provided by
financing activities....... 71,373 3,044 166,373
------------ ------------ ------------
Net increase (decrease) in
cash and cash equivalents.. (11,876) - 633
Cash and cash equivalents at
beginning of period......... 12,509 - -
------------ ------------ ------------
Cash and cash equivalents at
end of period.............. $ 633 $ - $ 633
============ =========== ============
Supplementary disclosure of
cash flow information:
Cash paid during the
period for:
Interest................ $ - $ - $ -
Income taxes............ $ - $ - $ -
Noncash financing activities:
Shares issued to the
president of the Company
in exchange for debt..... $ - $ - $ 40,018
Shares issued to related
parties in exchange for
debt..................... $ - $ - $ 558,206
Shares issued to judgement
creditors in exchange for
satisfaction of judgement $ - $ - $ 21,815
See accompanying notes to financial statements.
-4-
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Consolidated, Condensed Statements of Cash Flows, Concluded
January 1,
Three Months Ended 1992
June 30, Through
------------------------- June 30,
1996 1995 1996
------------ ------------ ------------
Noncash financing activities,
continued:
Shares issued for services $ 5,000 $ - $ 71,750
Shares issued for
compensation:
President............. $ - $ - $ 102,750
Secretary............. $ - $ - $ 1,500
See accompanying notes to financial statements.
-5-
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Notes to Consolidated, Condensed Financial Statements
June 30, 1996
Note A: Basis of presentation
The financial statements presented herein have been prepared by the
Company in accordance with the accounting policies in its Form 10-KSB
report dated December 31, 1995 and should be read in conjunction with
the notes thereto.
In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) which are necessary to a fair
presentation of operating results for the interim periods presented
have been made.
Interim financial data presented herein are unaudited.
Note B: Related party transactions
During the six months ended June 30, 1996, the Company paid $7,500,
for services and payments made on behalf of the Company, to an
unconsolidated affiliate.
Note C: Income taxes
At June 30, 1996, deferred taxes consisted of:
June 30,
1996 1995
------------ ------------
Deferred tax asset, net
operating loss carryforward.... $ 539,986 $ 500,435
Valuation allowance.............. (539,986) (500,435)
Net deferred taxes............... $ - $ -
------------ ------------
The valuation allowance offsets the net deferred tax asset for which
there is no assurance of recovery.
The Company has available, as of December 31, 1995, unused operating
loss carryforwards for Federal and State purposes of approximately
$1,533,983 each, which expire through the year 2010. The ability of
the Company to utilize the carryforwards may be severely limited
should its line of business (solar) or its ownership change.
-6-
<PAGE>
SOLAR ENERGY
RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Notes to Consolidated, Condensed Financial Statements, Continued
June 30, 1996
Note D: Shareholders' equity
During the six months ended June 30, 1996, the Company issued 128,746
shares of its $.50 par value common stock to accredited investors for
$64,373 cash. The Company has utilized this cash together with cash
from the sale of its common stock to other accredited investors to pay
certain expenses in connection with the reverse acquisition of Telegen
Corporation, an operating California corporation. The Company also
issued 10,000 shares of common stock as payment for legal services
valued at $5,000. Shareholders' equity transactions during the six
months ended June 30, 1996, consisted of the following:
Other
Common Stock Shareholders'
Shares Par Value Equity
----------- ----------- -----------
Balance at
December 31, 1995.... 1,273,850 $ 636,925 $ (609,777)
Shares issued for cash,
January 23, 1996..... 10,000 5,000 -
Shares issued for cash,
February 13, 1996.... 20,000 10,000 -
Shares issued for
services,
April 3, 1996........ 10,000 5,000 -
Shares issued for cash,
April 17, 1996....... 10,000 5,000 -
Shares issued for cash,
April 26, 1996....... 58,746 29,373 -
Shares issued for cash,
May 28, 1996......... 22,500 11,250 -
Shares issued for cash,
June 6, 1996......... 22,500 11,250 -
Offering costs incurred - - (500)
Net loss for the six
months ended
June 30, 1996........ - - (88,769)
----------- ----------- -----------
Balance at
June 30, 1996........ 1,427,596 $ 713,798 $ (699,046)
=========== =========== ===========
-7-
<PAGE>
SOLAR ENERGY
RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Notes to Consolidated, Condensed Financial Statements, Continued
June 30, 1996
Note E: Proposed merger
The Company, together with its merger candidate Telegen Corporation
(Telegen), have executed a definitive agreement and amendments whereby
the Company will acquire Telegen in a reverse acquisition. Telegen was
founded in 1990, and is engaged in the design, development,
manufacture (through contract manufacturers) and sales (through
manufacturers representatives and private label resellers),
intelligent telecommunications products which provide supplementary
features to existing telephone equipment and services for customers
and small businesses.
In an amendment to the agreement, Telegen agreed to pay all
professional fees related to the acquisition after May 31, 1996.
Telegen also agreed to advance the Company $28,127 toward the $200,000
required to be raised by the Company to cover legal and accounting
preacquisition costs. Should Telegen cancel the transaction, it is
required to reimburse the Company for pre-acquisition costs up to
$171,873. As of June 30, 1996, the Company had incurred
pre-acquisition costs totalling $155,651; $40,000, previously advanced
to Telegen plus the costs-to-date of the merger, paid by the Company,
totalling $115,651.
The Company received the $28,127 advance from Telegen on July 26,
1996. Management believes this advance is sufficient to cover the
Company's current liabilities and future expenses up to the time of
the acquisition's completion.
As part of the reorganization, the Company will execute a 7.25 for 1
reverse split of its shares. The Company plans to issue approximately
3,917,287 (post-split) shares of common stock to acquire all of the
then outstanding shares of Telegen. In addition, the Company plans to
re-incorporate in California and the definitive agreement calls for
Telegen to merge into the California corporation.
-8-
<PAGE>
SOLAR ENERGY
RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Notes to Consolidated, Condensed Financial Statements, Concluded
June 30, 1996
Note F: Private offering
During the three months ended June 30, 1996, the Company completed a
private offering of its $.50 par value common stock in which it raised
$171,873 for pre-acquisition costs related to the proposed merger.
In connection with the offering of its common shares, the Company
incurred offering costs consisting of legal fees totalling $500. No
commissions were paid to underwriters. The Company completed the
private offering during the three months ended June 30, 1996 and
offset the offering costs against additional paid-in capital in the
accompanying financial statements in other shareholders' equity.
Note G: Subsequent event
On July 26, 1996, the Company received $28,127 from Telegen to be used
to pay general and administrative expenses and all costs for the
completion of the reorganization agreement except professional fees.
-9-
<PAGE>
SOLAR ENERGY
RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Part I. Item 2. Plan of operation
During the six months ended June 30, 1996, the Company issued 128,746
shares of its $.50 par value common stock to accredited investors for $64,373
cash and 10,000 shares for legal services valued at $5,000. In addition, the
Company paid for costs of a proposed merger. No other material changes to the
Company's financial condition occurred during the quarter to which this
Quarterly Report is filed.
The Company, together with its merger candidate Telegen Corporation
(Telegen), have executed a definitive agreement whereby the Company will acquire
Telegen in a reverse acquisition.
In an amendment to the agreement, Telegen agreed to pay all professional
fees related to the acquisition after May 31, 1996. Telegen also agreed to
advance the Company $28,127 toward the $200,000 required to be raised by the
Company to cover legal and accounting preacquisition costs. Should Telegen
cancel the transaction, it is required to reimburse the Company for
pre-acquisition costs up to $171,873. As of June 30, 1996, the Company had
incurred pre-acquisition costs totalling $155,651; $40,000, previously advanced
to Telegen plus the costs-to-date of the merger, paid by the Company, totalling
$115,651.
The Company received the $28,127 advance from Telegen on July 26, 1996.
Management believes this advance is sufficient to cover the Company's current
liabilities and future expenses up to the time of the acquisition's completion.
As part of the reorganization, the Company will execute a 7.25 for 1
reverse split of its shares. The Company plans to issue approximately 3,917,287
(post-split) shares of common stock to acquire all of the then outstanding
shares of Telegen. In addition, the Company plans to re-incorporate in
California and the definitive agreement calls for Telegen to merge into the
California corporation.
The Company does not conduct any product research and development, expect
to purchase any significant equipment, or expect significant changes to the
number of employees as of June 30, 1996.
-10-
<PAGE>
SOLAR ENERGY RESEARCH CORP. AND SUBSIDIARY
(a Development Stage Enterprise)
Part II. Other Information
Item 1. Legal Proceedings
not applicable
Item 2. Changes In Securities
not applicable
Item 3. Defaults Upon Senior Securities
not applicable
Item 4. Submission Of Matters To A Vote Of Security Holders
not applicable
Item 5. Other Information
not applicable
Item 6. Exhibits and Reports On Form 8-K
a) Exhibits
Third amendment dated as of July 10, 1996 to the Agreement and Plan of
Reorganization by and among Solar Energy Research Corp., Telegen Corporation and
Telegen Acquisition Corporation.
b) Reports On Form 8-K
not applicable
-11-
<PAGE>
SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months ended June 30, 1996 have been
included.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SOLAR ENERGY RESEARCH CORP.
(Registrant)
Date: /s/James B. Wiegand
------------------- --------------------------------
James B. Wiegand
President
-12-
<PAGE>
THIRD AMENDMENT DATED AS OF JULY 10, 1996
TO THE AGREEMENT AND
PLAN OF REORGANIZATION BY AND AMONG
SOLAR ENERGY RESEARCH CORP.,
TELEGEN CORPORATION AND
TELEGEN ACQUISITION CORPORATION
WHEREAS, the parties hereto desire to further amend certain provisions of
the Agreement and Plan of Reorganization by and among Solar Energy Research
Corp., a Colorado corporation (the "Acquiror"), Telegen Corporation, a
California corporation ("Telegen") and Telegen Acquisition Corporation, a
California corporation and wholly owned subsidiary of Acquiror ("Merger Sub"),
dated November 16, 1995, as amended on January 18, 1996 and April 9, 1996 (the
"Reorganization Agreement") in order to, among other things, provide for:
(i) the addition of Telegen's unaudited financial statements as of March
31, 1996 with respect to the representations and warranties made by Telegen;
(ii) the deletion of the condition precedent to the obligations of Telegen
that Telegen shall have received from its legal counsel, Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation, an opinion to the effect that the
acquisition of Telegen by the Acquiror pursuant to the Reorganization Agreement
will be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code;
(iii) the change in the Acquiror Capitalization representations and the
Price Protection Provisions to reflect additional common stock issued by the
Acquiror;
(iv) the extension of the date beyond which either Telegen or the Acquiror
may terminate the Reorganization Agreement from August 31, 1996 to September 30,
1996; and
(v) the decrease in the amount that Telegen shall reimburse to the Acquiror
should Telegen cancel the Reorganization Agreement for any reason other than the
failure of the Acquiror to cure a breach of the Acquiror's representations and
warranties or to promptly close from a maximum of $200,000 to a final amount of
$171,873.50.
NOW THEREFORE, pursuant to Section 7.3 of the Reorganization Agreement, the
undersigned, being the parties to the Reorganization Agreement, hereby agree to
the following amendments (together the "Third Amendment") to the Reorganization
Agreement:
1. Section 3.1(b)(iii) shall be amended to reflect the outstanding options
to purchase 672,730 shares of Telegen Common at a weighted average exercise
price of $4.99 per share issued to then current employees of Telegen and the
outstanding warrants to purchase 50,500 shares of Telegen Common for $.01 per
share issued to Jessica L. Stevens.
-13-
<PAGE>
2. Section 3.1(e) - Financial Statements shall be amended by deleting the
first paragraph in its entirety and substituting therefore the following:
(e) Financial Statements. Telegen has furnished the Acquiror with audited
financial statements of Telegen as of December 31, 1994 and 1995 and unaudited
financial statements of Telegen as of March 31, 1996. All such financial
statements (i) present fairly the financial condition of Telegen at their
respective dates, and the results of Telegen's operations and cash flows for the
periods therein specified and (ii) were prepared in accordance with generally
accepted accounting principles applied upon a basis consistent with prior
accounting periods. Telegen's unaudited balance sheet as of March 31, 1996 is
hereinafter referred to as the "Telegen Balance Sheet," and all of the above
financial statements are hereinafter referred to as the "Telegen Financial
Statements."
The second paragraph of Section 3.1(e) shall remain unchanged by this
amendment.
3. Section 3.2(a) - Organization and Standing of Acquiror shall be amended
by deleting the last sentence in its entirety and substituting therefore the
following:
The Acquiror, which has one wholly owned subsidiary, Merger Sub, and
which intends to form another wholly owned subsidiary to effect the
proposed redomiciliation of the Acquiror as a California corporation, has
no direct or indirect interest, either by way of stock ownership or
otherwise, in any other firm corporation, association, or business other
than as disclosed in Schedule 3.2(a).
The remainder of Section 3.2(a) shall remain unchanged by this amendment.
4. Section 3.2(b)(i) - Capitalization and Indebtedness for Borrowed Moneys
and Section 6.2 - Price Protection Provisions shall be amended as necessary to
reflect the issuance by the Acquiror of additional common shares to raise funds
for the expenses of the parties in connection with the Reorganization Agreement
and the resulting final amount of issued and outstanding capital stock of the
Acquiror immediately prior to the Closing of 1,437,596 common shares.
Accordingly, the price protection formula set forth in Section 6.2, which shall
remain subject to automatic adjustment upon the consummation of the proposed one
share-for-seven and one-fourth shares (1 for 7.25) reverse split of all of the
Acquiror's issued and outstanding common stock as described in the Information
Statement-Prospectus contained in the Acquiror's Registration Statement on Form
S-4, shall be amended to provide as follows:
N = (1,437,596 x (2 divided by Bid Price Factor)) - 1,437,596
-14-
<PAGE>
The parties agree that the Acquiror shall be permitted to amend Schedule
3.2(c) at or immediately prior to the Closing to reflect the final
capitalization of the Acquiror immediately prior to the Closing.
5. Section 3.2(b)(iii) shall be amended to delete the reference to an
ongoing private placement of 200,000 shares of the Acquiror's Common Stock and
the Warrants.
6. Section 5.2(h) - Tax Opinion shall be deleted in its entirety.
Additionally, any provision elsewhere in the Reorganization Agreement which
refers to a tax opinion shall be treated as having been deleted.
7. Section 7.1(c) shall be amended in its entirety by substituting
therefore the following:
(c) by either the Acquiror or Telegen if the Merger shall not have
been consummated before September 30, 1996;
8. Section 8.7 - Cancellation by Telegen shall be amended as necessary to
provide that "$171,873.50" shall be substituted wherever the Reorganization
Agreement sets forth "$200,000." Further, a second paragraph shall be added to
Section 8.7 as follows:
In consideration for the agreement by the Acquiror to reject at
Telegen's request subscriptions to purchase additional shares of common
stock to be issued by the Acquiror for $28,127 and to terminate effective
June 30, 1996 the efforts by the Acquiror to raise funds to pay the
expenses to complete the Agreement through the private placement of its
common stock believed by Telegen to be dilutive, Telegen agrees to pay, and
advance where necessary, all reasonable and necessary expenses and
professional fees incurred subsequent to May 31, 1996 by the parties to the
Agreement in connection with the completion of the Agreement and the
transactions contemplated thereby. Additionally, Telegen shall advance to
the Acquiror by July 15, 1996 the sum of $28,127, which is to be used by
the Acquiror solely to pay for expenses of completing the Agreement,
including printing and mailing costs associated with obtaining approval of
the Agreement by the Acquiror's shareholders, as well as Blue Sky expenses
and filing costs. All expenses to be paid by Telegen in accordance with the
foregoing provisions must be paid in full at or before the Closing.
-15-
<PAGE>
This Third Amendment to the Reorganization Agreement may be executed in two
or more counterparts by facsimile signature, each of which shall be deemed an
original and all of which together shall constitute but one and the same
document. Capitalized terms used but not defined in this Third Amendment to the
Reorganization Agreement shall have the meanings given them in the
Reorganization Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Third Amendment to
the Reorganization Agreement as of the date first written above.
ACQUIROR: TELEGEN:
SOLAR ENERGY RESEARCH TELEGEN CORPORATION
CORP.
By:______________________________ By:______________________________________
James B. Wiegand, President Jessica L. Stevens, President and Chief
Executive Officer
MERGER SUB:
TELEGEN ACQUISITION CORPORATION
By:_____________________________________
James B. Wiegand, President
-16-
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000906448
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1.000
<CASH> 633
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,915
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 41,548
<CURRENT-LIABILITIES> 26,796
<BONDS> 0
0
0
<COMMON> 713,798
<OTHER-SE> (699,046)
<TOTAL-LIABILITY-AND-EQUITY> 41,548
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 87,867
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 902
<INCOME-PRETAX> (88,769)
<INCOME-TAX> 0
<INCOME-CONTINUING> (88,769)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,769)
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
