SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
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 No. 0-23900
IDM ENVIRONMENTAL CORP.
-----------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
New Jersey 22-2194790
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
396 Whitehead Avenue, South River, New Jersey 08882
---------------------------------------------------
(Address of principal executive offices)
(732) 390-9550
---------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
-------------------------------------------------------
(Former name, former address and formal 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 April 11, 2000, 3,922,893 shares of Common Stock of the issuer were
outstanding.
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
INDEX
Page
Number
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 2000 and
December 31, 1999................................................1
Consolidated Statements of Operations - For the three
months ended March 31, 2000 and March 31, 1999...................2
Consolidated Statements of Cash Flows - For the three
months ended March 31, 2000 and March 31, 1999...................3
Notes to Consolidated Financial Statements.......................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................7
Item 3. Quantitative and Qualitative Disclosures about Market Risk.......9
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds........................9
Item 4. Submission of Matters to a Vote of Security Holders..............9
Item 6. Exhibits and Reports on Form 8-K................................10
SIGNATURES . . . . . . ....................................................11
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December 31,
2000 1999
--------- -----------
ASSETS
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 211,175 $ 511,552
Accounts receivable 4,366,589 4,548,531
Recoverable income taxes 650,242 650,242
Prepaid expenses and other current assets 2,299,100 1,124,790
------------ ------------
Total Current Assets 7,527,106 6,835,115
Investments in and Advances to Unconsolidated Affiliates 929,266 979,266
Investment in Affiliate, at cost 1,853,125 1,853,125
Property, Plant and Equipment 1,814,675 1,903,321
Other Assets 979,925 979,925
------------ ------------
$ 13,104,097 $ 12,550,752
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $13,873 $ 18,701
Accounts payable and accrued expenses 8,760,333 8,847,937
Due to Officers 220,682 217,403
Billings in excess of costs and estimated earnings 1,327,722 912,699
------------ ------------
Total Current Liabilities 10,322,610 9,996,740
Long-Term Debt 15,810 16,864
------------ ------------
Total Liabilities 10,338,420 10,013,604
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Common stock, authorized 7,500,000 shares $.01 par
value, issued and outstanding 3,918,393 in 2000
and 3,768,945 in 1999 39,184 37,689
Additional paid-in capital 60,922,920 59,236,502
Retained earnings (deficit) (58,196,427) (56,737,043)
------------- -----------
2,765,677 2,537,148
------------- -----------
$ 13,104,097 $ 12,550,752
============= ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
For the Three Months Ended March 31,
------------------------------------
2000 1999
------ ------
<S> <C> <C>
Revenue:
Contract income $ 3,064,595 $2,428,878
Cost of Sales:
Direct job costs 1,988,110 2,276,002
----------- -----------
Gross Profit 1,076,485 152,876
Operating Expenses:
General and administrative expenses 2,453,333 1,820,874
Depreciation and amortization 67,047 127,515
Equity in net loss of unconsolidated partnerships - 8,711
----------- -----------
2,520,380 1,957,100
----------- -----------
Loss from Operations (1,443,895) (1,804,224)
Other Income (Expense):
Loss on disposal of property, plant and equipment (3,385) -
Interest income (expense) (12,104) (14,887)
----------- -----------
(15,489) (14,887)
----------- -----------
Loss before Provision (Credit) for Income Taxes (1,459,384) (1,819,111)
Provision (Credit) for Income Taxes - -
----------- -----------
Net Loss (1,459,384) (1,819,111)
Preferred Stock Dividends - 3,763
----------- -----------
Net Loss on Common Stock $ (1,459,384) $ (1,822,874)
=========== ===========
Loss per Share:
Basic Loss per share $ (0.38) $ (0.61)
=========== ===========
Diluted Loss per share $ (0.38) $ (0.61)
=========== ===========
Basic common shares outstanding 3,798,658 2,966,925
=========== ===========
Diluted common shares outstanding 3,798,658 2,966,925
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
For the Three Month Ended March 31,
-----------------------------------
2000 1999
------ ------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss on Common Stock $ (1,459,384) $(1,822,874)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 74,422 150,543
Amortization of debt discount and beneficial conversion feature - 16,124
Dividend on convertible preferred stock - 3,763
Compensation cost of consultant stock options 1,073,441 -
Equity in net loss of unconsolidated affiliates - 8,711
Loss on disposal of assets 3,385 -
Decrease (Increase) In:
Accounts receivable 181,942 1,210,609
Costs and estimated earnings in excess of billing - 202,464
Prepaid expenses and other current assets (97,688) (394,405)
Increase (Decrease) In:
Accounts payable and accrued expenses (613,663) (632,686)
Billings in excess of costs and estimated earnings 415,023 108,698
---------- -----------
Net cash used in operating activities (422,522) (1,149,053)
---------- -----------
Cash Flows from Investing Activities:
Disposal of property, plant and equipment 10,839 112,478
Investment in and advances from (to) unconsolidated affiliates 50,000 758,722
Loans and advances from (to) officers 3,279 -
---------- -----------
Net cash provided by investing activities 64,118 871,200
---------- -----------
Cash Flows from Financing Activities:
Principal payments on long-term debt (5,882) (83,507)
Proceeds from exercise of stock options and warrants 63,909 34,564
Net cash (used in) provided by financing activities 58,027 (48,943)
---------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents (300,377) (326,796)
Cash and Cash Equivalents, beginning of period 511,552 384,292
---------- -----------
Cash and Cash Equivalents, end of period $ 211,175 $ 57,496
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Continued)
<TABLE>
For the Three Months Ended March 31,
------------------------------------
2000 1999
------ ------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $ 5,693 $ 15,599
======== =========
Income taxes $ - $ -
======== =========
Supplemental Disclosure of Noncash Investing and Financing Activities:
Repayment of stockholder's loan through issuance of common stock $ - $ 265,133
======== =========
Issuance of restricted common stock for debt and deposits $ 550,562 $ -
======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
4
<PAGE>
IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM PRESENTATION
The interim consolidated financial statements are prepared pursuant to the
requirements for reporting on Form 10-Q. These statements include the
accounts of IDM Environmental Corp. and all of its wholly owned and
majority owned subsidiary companies. The December 31, 1999 balance sheet
data was derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. The
interim financial statements and notes thereto should be read in
conjunction with the financial statements and notes included in the
Company's Form 10-K for the year ended December 31, 1999. In the opinion of
management, the interim financial statements reflect all adjustments of a
normal recurring nature necessary for a fair statement of the results for
the interim periods presented. The current period results of operations are
not necessarily indicative of results which ultimately will be reported for
the full year ending December 31, 2000.
2. CONTINGENCIES
On August 15, 1996, the U.S. Department of Labor, Occupational Safety and
Health Administration ("OSHA") issued wilful citations and notification of
penalty in the aggregate amount of $147,000 on the Company in connection
with the accidental death of an employee of one of the Company's
subcontractors on the United Illuminating Steel Point Project job site in
Bridgeport, Connecticut. A complaint was filed against the Company by the
Secretary of Labor, United States Department of Labor on September 30,
1996. A hearing was conducted in the matter in April, 1997. In June 1998,
the Company received a copy of the written decision filed by OSHA's Review
Commission. The Commission vacated the first alleged wilful citation, but
affirmed each of the second and third wilful citations, imposing a penalty
in the amount of $70,000 for each citation. The Company strongly objected
to the Commission's finding on the basis that it cannot be sustained as
matters of fact or law and filed a timely Notice of Appeal with the OSHA
Review Commission for Discretionary Review, which body has accepted
jurisdiction of the matter on administrative appeal. The Company is
contesting the Citations and Notification of Penalty.
Also in connection with this accidental death, the employee's estate filed
a complaint for wrongful death against the subcontractor and the Company on
February 11, 1997. The estate seeks damages in the amount of $45 million.
The Company is being defended by the subcontractor's insurance carrier
pursuant to the subcontractor's obligation to defend and indemnify the
Company with respect to the actions of its (subcontractor's) employees and
agents. The Company will be fully indemnified for any liability, if any,
for any potential judgement or settlement in this matter by the
subcontractor's carrier and, if necessary by its own general liability
insurance carrier and, therefore, the action is not expected to have any
material effect on the Company's consolidated financial statements.
In July of 1998, the Company, it's subsidiary, Global Waste & Energy and
certain affiliates and officers were named as co-defendants in a cause of
action styled Kasterka Vrtriebs GmbH v. IDM Environmental Corp., et al,
filed in the Court of Queen's Bench of Alberta, Judicial District of
Calgary. The plaintiff, Kasterka, has alleged that the Company and it's
affiliates breached a marketing agreement that had been entered between
Kasterka and Enviropower. The plaintiff has alleged that the defendants
failed to supply the required plans and specifications relating to the
gasification technology originally developed by Enviropower and that, as a
result, Kasterka was unable to manufacture and market gasification units in
the territories designated in the marketing agreement. Kasterka has
asserted a variety of claims for damages in the aggregate amount of
approximately $42 million. The Company believes the suit is without merit
and intends to vigorously contest the cause of action.
In September of 1998, the Company was named as a defendant in a cause of
action styled Balerna Concrete Corporation, et al. v. IDM Environmental
Corp., et al, filed in the United States District Court of Massachusetts
(Case No. 98CV11883ML). The plaintiffs alleged that the Company, and
others, engaged in a pattern of illegal conduct to divert funds from the
plaintiffs through the operation of a concrete finishing business. The
plaintiffs have asserted various claims under RICO, common law fraud,
conversion, breach of contract and others basis seeking damages in an
amount expected to exceed $450,000. The case was dismissed in February
2000.
5
<PAGE>
3. EARNINGS PER SHARE
For the periods reported in within these consolidated financial statements
weighted average shares for basic and dilutive computations are the same
due to losses reported for each of the periods.
4. ISSUANCE OF STOCK FOR SERVICES AND IN LIEU OF BOND
During the nine months ended March 31, 2000, the Company issued a total of
345,000 shares of restricted common stock in settlement of accounts payable
and collateral totaling $1,511,562.
5. MERGER WITH FUSION NETWORKS HOLDINGS, INC.
The proposed reorganization between the Company and Fusion Networks was
approved by the shareholders of the Company and Fusion in March 2000 and
the reorganization was completed in April, 2000. As a result of the
reorganization, the Company and Fusion became wholly-owned subsidiaries of
Fusion Networks Holdings, Inc. The Company and Fusion Networks both plan to
continue their historical operations for the foreseeable future.
6
<PAGE>
Item 2. Management's Discussion and Analysis Of Financial Condition And Results
Of Operations.
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities Exchange Act of
1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth in this
report.
Material Changes in the Results of Operations for the Three Months ended March
31, 2000 Compared with Three Months ended March 31, 1999
Revenues. The Company's total revenues increased by approximately 26.2% from
$2,429,000 for the quarter ended March 31, 1999 to $3,065,000 for the quarter
ended March 31, 2000. The increase in contract service revenues in 2000 from
1999 is primarily attributable to the receipt of approximately $.5 million in
insurance proceeds for a flood loss at one of the Company's job sites.
Cost of Sales. Direct job costs decreased by 12.7% from $2,276,000 for the
quarter ended March 31, 1999 to $1,988,000 for the same period in 2000. The
decrease in job costs was attributable to the Bound Brook project. The primary
elements of such decrease in job costs were job salaries and materials and
supplies.
General and Administrative Expenses. General and administrative expenses
increased 34.7% from $1,821,000 during the quarter ended March 31, 1999 to
$2,453,000 during the same period in 2000. The increase in general and
administrative expense was primarily attributable to a $1.1 million expense
recorded in March 2000 for options granted to consultants to purchase 130,000
shares of common stock of the Company at the market price of the company's stock
at the date of grant which was partially offset by approximately $0.3 million in
lower salaries expense in 2000 due to less employees..
Depreciation and amortization. Depreciation and amortization expense decreased
by approximately 47.7% from $128,000 in 1999 to $67,000 in 2000. The decrease
depreciation and amortization expense was primarily attributable to a decrease
in amount of equipment being depreciated due to prior years disposals.
Interest Expense. In addition to its operating income and expenses, the Company
reported net interest expense of $12,000 for the quarter ended March 31, 2000 as
compared to net interest expense of $15,000 for the same period in 1999.
Miscellaneous. During the first quarter of years 1999 and 2000 no provision was
made for post retirement benefits subject to FAS 106.
As a result of the foregoing, the Company reported a net loss of $1,459,000 for
the quarter ended March 31, 2000 as compared to a net loss of $1,819,000 for the
same quarter in 1999.
The net loss attributable to common stock was increased by the preferred stock
dividends totaling $4,000 in 1999.
Liquidity and Capital Resources
At March 31, 2000, we had a working capital deficit of approximately $2.8
million and a cash balance of $211,000. This compares to a deficit in working
capital of $3.2 million and a cash balance of $0.5 million at December 31, 1999.
The changes in working capital and cash were primarily attributable to a
combination of the loss incurred during 2000 which was partially offset by (1)
the non-cash charge of $1.1 million for the consultants option expense, and (2)
the issuance of stock to pay various vendors.
During the third quarter of 1999 we recorded a $1,200,000 tax benefit from the
New Jersey NOL. We received $550,000 in December 1999 and expect to realize the
balance from our New Jersey tax credit in the third quarter of the year 2000.
7
<PAGE>
We require substantial working capital to support our ongoing operations. As is
common in the environmental services industry, payment for services rendered are
generally received pursuant to specific draw schedules after services are
rendered. Thus, pending the receipt of payments for services rendered, we must
typically fund substantial project costs, including significant labor and
bonding costs, from financing sources within and outside of the Company. Certain
contracts, in particular those with United States governmental agencies, may
provide for payment terms of up to 90 days or more and may require the posting
of substantial performance bonds which are generally not released until
completion of a project.
Operations were historically funded through a combination of operating cash
flow, term notes and bank lines of credit. Since April of 1994, we have carried
no bank debt and have funded operations principally through the sale of equity
securities and securities convertible into equity securities. At March 31, 2000,
we had no bank debt and no significant long-term debt and were funding
operations entirely through cash on hand and operating cash flow.
In order to meet working capital needs during 1999, and 2000, we have borrowed
funds from various parties, including officers, and have issued stock in payment
of certain trade payables. At March 31, 2000, we owed a total of $221,000
primarily to our two principal officers for funds advanced. There are no
definitive repayment terms on such amounts. During the first quarter of 2000 we
issued 127,357 shares of common stock in connection with the settlement of
accounts payable obligations amounting to $1,585,303.
In April 2000, we consummated a reorganization pursuant to which we, and Fusion
Networks, became wholly-owned subsidiaries of Fusion Networks Holdings. As a
result of that transaction, we will no longer have the ability to issue stock or
options to pay vendors and others or to raise capital. Under the terms of the
reorganization, we are entitled to fifty percent (50%) of all proceeds from the
exercise of warrants and options outstanding on the date of the reorganization.
On the closing date of the reorganization, we had approximately 198,475
outstanding warrants and 2,615,177 outstanding options with exercise prices
ranging from $1.156 to $45.00 per share. Exercise of the outstanding warrants
and options would produce approximately $20,400,000 of proceeds, of which we
would receive one-half. Warrants and options outstanding, representing
approximately $1,500,000 of potential gross exercise proceeds, were
"in-the-money" as of May 10, 2000. There is no assurance that any of the
outstanding warrants and options, particularly warrants and options which are
not "in-the-money" will ever be exercised.
As a result of our limited resources and substantial costs of pursuing energy
projects, we have substantially curtailed all efforts to develop energy projects
in the future. In connection with our determination to curtail development of
energy projects, we are attempting to sell our interest in our El Salvador
energy project and various other energy projects. We have signed a Memorandum of
Understanding with a potential purchaser of the El Salvador Project. There is no
assurance that we will be successful in our efforts to sell our energy project
assets.
Other than funds provided by operations and the potential receipt of funds from
the exercise of outstanding warrants and options, settlement of claims and
litigation and sale of assets, we presently have no sources of financing or
commitments to provide financing.
We believe that our working capital, combined with the expected receipt of funds
from the exercise of options and warrants, the resolution of certain change
orders and litigation and the sale of certain assets, is sufficient to meet our
anticipated needs for at least the following twelve months, including the
performance of all existing contracts of the Company. However, as there is no
assurance as to the timing or amount of the receipt of funds from change orders,
litigation or other sources, we may be required to seek new bank lines of credit
or other financing in order to facilitate the performance of jobs. While we are
conducting ongoing discussions with various potential lenders with a view to
establishing available credit facilities, we presently have no commitments from
any bank or other lender to provide financing if such financing becomes
necessary to support operations.
Year 2000 Issue
We experienced no material failures and incurred no material costs or losses as
a result of the Year 2000 Issue.
8
<PAGE>
Impact of Inflation
Inflation has not been a major factor in our business since inception. There can
be no assurances that this will continue. However, it is anticipated that any
increases in costs can be passed on to customers in the form of higher prices.
Certain Factors Affecting Future Operating Results
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might cause such a
difference include the following: uncertainty regarding the rate of growth in
demand for nuclear decommissioning and site revitalization services; continued
delays in awarding and commencing contracts; delays in payment on contracts
occasioned by dealings with governmental and foreign entities; changes in
accepted remediation technologies and techniques; fluctuations in operating
costs associated with changes in project specifications and general economic
conditions; substantial fluctuations in revenues resulting from completion and
replacement of contracts and delays in contracts; economic conditions affecting
the ability of prospective customers to finance projects; and other factors
generally affecting the timing and financing of projects.
ITEM 3A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not applicable
(b) Not applicable
(c) (i) Pursuant to the 350,000 shares reserve established for issuance to
various vendors in payment for services provided to the Company, at various
dates during the quarter ended March 31, 2000, the Company issued an
aggregate of 127,357 shares of its common stock to vendors pursuant to that
reserve.
(ii) The securities were issued, without an underwriter, to a total of
15 vendors of the Company and to one bonding company.
(iii) The securities were issued in satisfaction of amounts owed to
vendors of the Company totaling approximately $350,000 and as a deposit in
lieu of a bond to a bonding company in the amount of approximately
$200,000. No commissions were paid in connection with the issuance of the
securities.
(iv) The securities were issued pursuant to the exemption from
registration set forth in Section 4(2) of the Securities Act of 1933. The
securities issuances were privately negotiated pursuant to settlement
efforts with selected vendors without any general soliciation or
advertising. The securities bear legends restricting the resale thereof.
(d) Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On March 28, 2000, a special meeting of shareholders of IDM
Environmental Corp. was held.
(b) Not applicable
(c) The following matters were voted upon at such meeting:
(i) Approval of a Plan of Reorganization and Merger by an among IDM,
Fusion Networks Holdings and IDM Merger Subsidiary, pursuant to
which a holding company will be formed, whereby Fusion Networks
and IDM will each become wholly-owned subsidiaries of Fusion
Networks Holdings and each shareholder of Fusion Networks will
receive one share of common stock of Fusion Networks Holdings for
each share of Fusion Networks held.
(1,848,215 For, 68,850 Against, 16,404 Abstain)
(ii) Approval of an Agreement and Plan of Merger by and among Fusion
Networks Holdings Fusion Networks and IDM/Fusion Acquisition
Corporation, pursuant to which Fusion Networks will become a
wholly-owned subsidiary of Fusion Networks Holdings.
(1,847,873 For, 69,022 Against, 16,574 Abstain)
(iii)Approval of an amendment to the IDM Environmental Corp. 1998
Comprehensive Stock Option and Award Plan, as assumed by Fusion
Networks Holdings, Inc. which will (a) increase the number of
shares of common stock reserved for issuance under such plan by
an additional 1,600,000 shares, and (b) fix 400,000 as the
maximum number of shares which may be subject to awards granted
under the 1998 Stock Option Plan to any individual in any
calendar year.
(1,658,646 For, 247,098 Against, 27,725 Abstain)
(d) Not applicable
9
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
10
<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.
IDM ENVIRONMENTAL CORP.
Dated: May 15, 2000
By: /s/ Joel Freedman
--------------------------------
Joel Freedman, President
Dated: May 15, 2000
By: /s/ Michael B. Killeen
--------------------------------
Michael B. Killeen, Principal
Financial and Accounting Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 211,175
<SECURITIES> 0
<RECEIVABLES> 4,366,589
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,527,106
<PP&E> 1,814,675
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,104,097
<CURRENT-LIABILITIES> 10,322,610
<BONDS> 15,810
0
0
<COMMON> 39,184
<OTHER-SE> 2,726,493
<TOTAL-LIABILITY-AND-EQUITY> 13,104,097
<SALES> 3,064,595
<TOTAL-REVENUES> 3,064,595
<CGS> 1,988,110
<TOTAL-COSTS> 1,988,110
<OTHER-EXPENSES> 2,520,380
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,104
<INCOME-PRETAX> (1,459,384)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,459,384)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,459,384)
<EPS-BASIC> (.38)
<EPS-DILUTED> (.38)
</TABLE>
