UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: August 31, 1998
Commission file number: 33-68570
BETTING, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 43-1239043
(State of incorporation)(IRS Employer Identification number)
31310 Eaglehaven Center, Suite 10
Rancho Palos Verdes, California 90275
(Address of principal executive offices and Zip Code)
(310) 541-4393
(Registrant's telephone number, inc luding area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Betting, Inc. Common Stock $.01 Par Value
Betting, Inc. Class A Warrants
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 No X
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or informational statements incorporated by
reference in Part III of this form 10-KSB or any amendment to
this form 10-KSB. [ ]
Revenue's for the fiscal year ended August 31, 1998: $0
The aggregate market value of the voting stock held by non-
affiliates of the Registrant, based upon the closing average bid
and asked price of the Common Stock on August 31, 1998, as
reported on the OTC Bulletin Board, was $1,785,000
Number of shares of common stock outstanding as of August
31,1998: 14,284,234
Documents Incorporated by Reference: Registrant's Annual Report
on Form 10-KSB filed in February 1999, Registrant's Annual Report
on Form 10-KSB filed on January 17, 1997, Exhibit's in
Registrant's Annual Report on Form 10-K filed on December 14,
1995, and Exhibits in Registrant's Annual Report on Form 10-K
filed on November 29, 1994, are incorporated by reference to the
exhibit index attached hereto. Exhibits in Registrant's
Registration Statement on Form S-1 filed on October 28, 1993, are
incorporated by reference to the exhibit index attached hereto.
BETTING, INC.
Index to Annual Report
on Form 10-KSB
<TABLE>
<S> <C>
Part I Page
Item 1- Description of Business 3-4
Item 2- Description of Property 4
Item 3- Legal Proceedings 4
Item 4- Submission of Matters to a Vote of 4
Security Holders
Part II
Item 5- Market for Common Equity and Related 5
Stockholder Matters
Item 6- Management's Discussion and Analysis of 6-9
Financial Condition Results of Operations
Item 7- Financial Statements 9
Item 8- Changes in and Disagreements with 9
Accountants on Accounting and Financial
Disclosure
Part III
Item 9- Directors, Executive Officers and 9
Compliance WithSection 16(a) of the Exchange Act
Item 10- Executive Compensation 9-10
Item 11- Security Ownership of Certain 10-11
Beneficial Owners and Management
Item 12- Certain Relationships and Related 11
Transactions
Part IV
Item 13- Exhibits, Financial Statement Schedules 12
and Reports on Form 8-K
</TABLE>
PART I
Item 1. Description of Business
(a) Business Development
Betting, Inc., was organized under the laws of the State
of Missouri on September 1, 1981, as HANDY-TOP, INC. On
April 20, 1983, the Articles of Incorporation were
amended to change the name of the corporation to HTI
Corporation. On May 28, 1993, the Articles of
Incorporation were amended to change the name of the
corporation to Leggoons, Inc. In addition to changing
the company's name, the May 28,1993, amendment to the
Articles of Incorporation increased the number of
authorized shares of common stock from 40,000 to
10,000,000 and decreased the par value of the common
stock from $1.00 per share to $.01 per share. Also on May
28, 1993, Leggoons, Inc., declared a 14-for-1 stock
split. Unless otherwise indicated, all share and per
share data are reflected on a post split basis throughout
this Form 10-KSB.
On June 12, 1996, Leggoons, Inc., transferred all of its
assets and liabilities to a third party assignee, under
an "Assignment for the Benefit of Creditors" (the
"Assignment"). An Assignment is a business liquidation
device available as an alternative to bankruptcy. The
third party assignee, a Nebraska corporation, also named
Leggoons, Inc. (the "Assignee"), will be required to
properly, timely, and orderly dispose of all remaining
assets for the benefit of creditors. Leggoons, Inc.,
continued to maintain its' status as a shell corporation.
On February 18, 1997, Leggoons, Inc. entered into an
Agreement to License Assets from Home Point of Sales,
Inc.(HPOS). HPOS is a privately held corporation focused
on the emergence of the Personal Encrypted Remote
Financial Electronic Card Transactions industry. This
industry provides consumers with the option to instantly
pay bills or impulse purchase from home with real time
cash transactions. Management believes the proprietary
technology and the large demand for wagering
opportunities in today's marketplace will combine to
generate substantial sales for Leggoons, Inc., over the
medium term.
Thomas S. Hughes, Chairman of HPOS, became Chairman and
President of Leggoons, Inc., on March 1, 1997. He will
focus on procedures, policies and state approvals to
begin home lottery, off track betting, casino and sports
ATM card and SMART card wagering. A search is presently
being conducted to locate a CEO/COO for the Company. The
CEO/COO will assemble a team of professionals to develop
the procedures and policies of home ATM card and SMART
card wagering. This development process will include a
close focus on the political and the instant taxation of
home winnings issues associated with home ATM card and
SMART card wagering.
Thomas S. Hughes, Chairman of HPOS, will remain as
Chairman and President of the Leggoons, Inc. Leggoons,
Inc., intends to seek shareholder ratification of its
name change from Leggoons, Inc. to Betting, Inc.
(b) Business of Issuer
Betting, Inc. (the "Company") is positioning itself to
facilitate same as cash ATM card or smart card
transactions that are originating from bank host
processing centers and are being sent to gaming
operators. These transactions are being effected with
electronic equipment that allows self service pay per
play and no actual communications between the player and
the gaming operator. These types of transactions will be
originating from homes, offices, and public walk in
locations. The Company will act as the interface that
will communicate data to the gaming operators, receive
back their acknowledgment of the transaction and then
pass on this gaming acknowledgment to the bank host
processing center that has been standing by for this
information and has already completed the bank
authorization of the pay per play transaction.
The business model of the Company is to receive a fee per
transaction paid to Betting, Inc. by the bank host
processing center at the moment of the transaction. In
general, this fee will be from between 2% to 6% of the
wager placed on a pay per play or a $6 flat fee in the
case of an account being opened.
The internet gaming industry is an industry that has
developed significantly in recent years. The internet
gaming industry as a whole is under increasing
governmental scrutiny as the industry develops. It is
possible that at some point in the future there could be
legislation against gambling on the internet or other
similar methods.
Leggoons, Inc., was engaged in the design, manufacture
and distribution of apparel and related accessories which
are sold to better specialty and department stores
nationwide under the brands: Leggoons, CPO by Leggoons,
John Lennon Artwork Apparel and Snooggel. On January 19,
1996, Leggoons, Inc., entered into a Licensing Agreement
with Robert Tamsky, a former director and employee of the
Leggoons, Inc. Pursuant to the terms of the Licensing
Agreement, the Leggoons, Inc., granted Mr. Tamsky
effective January 1, 1996, the right to use the LEGGOONS
trademark in connection with the design, production,
marketing, sales and sublicensing of all clothing,
wearing apparel and accessories bearing the "LEGGOONS"
symbol. This right will continue until December 31,
1998, and may be extended thereafter each year for an
additional year. In consideration for the license, Mr.
Tamsky, according to the Licensing Agreement, shall pay
to the Leggoons, Inc. a royalty of five percent of the
net sales of "LEGGOONS" products.
Also on January 19, 1996, the Leggoons, Inc., adopted a
formal plan to discontinue the designing, selling,
manufacturing and distribution of its apparel products.
As part of such plan, Leggoons, Inc., discontinued
production on April 30, 1996, and intended to either sell
or liquidate the operations within twelve months of that
date. On June 12, 1996, Leggoons, Inc., transferred all
of its assets and liabilities to a third party
assignee, under an "Assignment for the Benefit of
Creditors." Included in the Assignment were the rights
and obligations of the Licensing Agreement.
Item 2. Description of Property
Not Applicable
Item 3. Legal Proceedings
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters
(a) Market Information
The Common Stock is traded in the over-the-counter market
and the range of closing bid prices shown below is as
reported by the OTC Bulletin Board. The quotations shown
reflect inter-dealer prices, without retail mark-up, mark-
down or commission and may not necessarily
represent actual transactions.
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended August 31, 1998
<TABLE>
<S> <C> <C>
High Low
First Quarter 1/8 1/32
Second Quarter 1/16 1/32
Third Quarter 1/8 1/16
Fourth Quarter 3/16 1/16
</TABLE>
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended August 31, 1997
<TABLE>
<S> <C> <C>
High Low
First Quarter 3/8 1/8
Second Quarter 1/2 1/8
Third Quarter 15/16 1/16
Fourth Quarter 9/16 1/16
</TABLE>
(b) Holders of Common Equity
As of August 31, 1998, the Company estimates there were
400 beneficial shareholders of the Company's Common
Stock.
(c) Dividends
The Company has not declared or paid a cash dividend to
stockholders since it became a "C" corporation on
November 18, 1993. The Board of Directors presently
intends to retain any earnings to finance Company
operations and does not expect to authorize cash
dividends in the foreseeable future. Any payment of cash
dividends in the future will depend upon the Company's
earnings, capital requirements and other factors.
Item 6.Management's Discussion and Analysis of Financial
Condition and Results of Operations
(a) Results of Continuing Operations
Comparison of Fiscal 1998 and 1997
The loss for the year ended August 31, 1998, was
$196,968. The Company recognized $0 in revenue while
preparing the setup of the Company to commence operations
as a facilitator of same as cash ATM card or smart card
transactions that are originating from bank host
processing centers and are being sent to gaming
operators. The loss was due to consulting fees of
$122,020 and general and administrative expenses of
$74,948.
During the period September 1, 1996, through February 28,
1997, the Company was operating as Leggoons, Inc. (a
public shell available for merger or acquisition).
During this six month period the net loss from continuing
operations was $35,912. This loss was due to general and
administrative expenses of $35,912. The primary general
and administrative expenses incurred during the six month
period ended February 28, 1997, were legal expenses
related to the HPOS license agreement, accounting fees
for the audit of Leggoons, Inc., financial statements as
of and for the year ended August 31, 1996, and stock
expenses required to maintain Leggoons, Inc., public
shell status. During the period March 1, 1997, through
August 31, 1997, the Company was maintaining operations
as Betting, Inc. During this six month period the net
loss from continuing operations was $1,663,533. This loss
was due to operating expenses of $1,663,533. The
operating expenses were consulting fees of $565,740,
research and development expenses of $450,331, software
development costs of $507,600 and general and
administrative expenese of $139,862.
Liquidity and Capital Resources
During the period September 1, 1997, through August 31,
1998, the Company issued 6,441,000 shares of common stock
for services rendered and payments on accounts payable
and due to stockholder. For the shares of common stock
issued for services rendered and payments on accounts
payable during the period September 1, 1997, through
August 31, 1998, the following valuation policies were
used so that a financial value could be assigned to the
stock issuance transactions: the closing "market" stock
price on the day of each common stock issuance was used
to determine "fair market value" of the 1,369,000
unrestricted common shares issued; the closing "market"
stock price on the day of each common stock issuance less
a 50% discount was used to determine "fair market value"
of the 2,322,000 restricted common shares issued. Common
shares that were issued and for which no performance was
received, 2,750,000 shares, were valued at par value,
$.01 per share. For the 2,750,000 shares of common stock
issued for which no performance was received a stop has
been placed on the stock certificates with the Company's
stock transfer agent.
The financial value of the common stock issued for no
cash consideration is required to be expensed by the
Company. The "fair market value" of such common stock
issued, $153,160, has primarily been expensed as $122,020
in consulting fees and $31,140 in general and
administrative expenses during the year ended August 31,
1998. Some of the common stock shares issued were
registered with the Securities and Exchange Commission
using Form S-8 Registration Statements.
During the six month period from September 1, 1996,
through February 28, 1997, Leggoons, Inc., prinicpal
stockholder, James S. Clinton, provided the operating
capital needed to fund operations. During the six month
period from March 1, 1997, through August 31, 1997,
operations were funded via advances from HPOS and by
issuing common stock for funds and services rendered.
During the period March 1, 1997, through August 31, 1997,
the Company issued 4,710,234 shares of common stock for
services rendered. For the 2,999,734 shares of common
stock issued for services rendered during the period
March 1, 1997, through May 31, 1997, the following
valuation policies were used so that a financial value
could be assigned to the stock issuance transactions: the
closing "market" stock price on the day of each common
stock issuance was used to determine "fair market value"
of the 520,000 unrestricted common shares issued; the
closing "market" stock price on the day of each common
stock issuance less a 50% discount was used to determine
"fair market value" of the 1,725,734 restricted common
shares issued. Common shares that were issued and for
which no performance was received, 754,000 shares, were
valued at par value, $.01 per share. For the 1,710,500
shares of common stock issued for services rendered
during the period June 1, 1997, through August 31, 1997,
an average closing stock price of $.20 was used to
determine "fair market value" of each share issued so
that a financial value could be assigned to the stock
issuance transactions..
The financial value of the common stock issued for no
cash consideration is required to be expensed by the
Company. The "fair market value" of such common stock
issued, $1,297,805, has primarily been expensed as
$304,240 in consulting fees, $445,128 in research and
development costs, $500,000 in software development costs
and $48,437 in general and administrative expenses during
the year ended August 31, 1997. Some of the common stock
shares issued were registered with the Securities and
Exchange Commission using Form S-8 Registration
Statements.
The common shares of stock issued for noncash
consideration were, in some cases, given for past
services rendered to HPOS in developing its' product.
The management of the Company is continuing its search
for additional private investors to provide the funds
needed to fund day to day operations. It is also the
goal of management to register and complete additional
public stock offerings of its common stock.
The Company has an accumulated deficit of $5,467,602.
The Company's losses from operations and inability to
generate sufficient cash flow from normal operations to
meet its obligations as they come due raise substantial
doubt about the Company's ability to continue as a going
concern. The Company's ability to continue in existence
is dependent upon future developments, including
obtaining financing and achieving a level of profitable
operations sufficient to enable it to meet its
obligations as they become due.
Plan of Operations
The plan of the Company is to establish partners in
countries including, but not limited to, the United
Kingdom, China, Mexico, Australia and South Africa with
the stated goal being the establishment of the wagering
gate between the bank hosts in that country and the
gaming operators. The second phase will be the
connection between the various countrys' Company wagering
gates so that same day per play between countries will be
possible.
Establishing the wagering gate presence involves the
linking of Betting, Inc. to both the gaming operators and
the bank hosts. In effect, the Company will be a data
host processing center whose business is the passing of
messages back and forth between the bank hosts and the
gaming operators.
The Company is currently satisfying its cash requirements
by issuing Betting, Inc. common stock for services
rendered. The Company intends to issue Betting, Inc.
common stock at some point in the future to satisfy a
$237,000 obligation to the designer and developer of the
Merchant Response Software used with the Company's
hardware products. The $237,000 obligation is included
in accounts payable at August 31, 1998.
On May 22, 1996, Leggoons, Inc., entered into an Addendum
to the Stock Purchase Agreement it initially entered into
on September 5, 1995, with Infinitron Investments
International, Inc. of Vancouver B.C. ("Infinitron").
Pursuant thereto 100% of the shares of common stock of
Infinitron would be exchanged for approximately 4,797,500
shares of common stock of Leggoons, Inc., which would
represent approximately 95% of the post-split Leggoons,
Inc., outstanding common stock. The Addendum provided,
among other things, that Leggoons, Inc., would use its
best efforts to obtain SEC clearance of its proxy
statement by July 22, 1996, and Infinitron will use its
best efforts to fully cooperate with Leggoons, Inc., in
obtaining such clearance.
On July 3, 1996, counsel for Infinitron informed
Leggoons, Inc., that Infinitron does not intend to
proceed with the transactions contemplated by the Stock
Acquisition Agreement. Counsel for Infinitron stated
that the basis for that action was that he noted "a
number of irregularities in the relationships and
dealings among the principals of Leggoons and Infinitron,
" however he did not provide any specifics relating to
that allegation. Leggoons, Inc., believes these claims
to be baseless and without merit.
Settlement negotiations have been completed, including
verbal approval by Infinitron and Leggoons, Inc., of the
settlement documents. Generally, under the terms of the
settlement, Leggoons, Inc. shareholders are to receive
186,721 shares of Infinitron common stock, which
represents approximately 3% of Infinitron's outstanding
shares of common stock on August 5, 1996. The 186,721
shares of common stock of Infinitron will be held for the
benefit of the Leggoons, Inc., stockholders as their
"loss of the bargain" under the proposed merger.
As of March 31, 1999, the settlement agreement has not
been executed by all parties. If, and when, this
settlement agreement is executed the Company will be able
to determine how any proceeds of the settlement agreement
affect its plan of operations for the next twelve months.
There can be no assurance that a settlement agreement
will be executed and the shareholders will receive any
proceeds.
Year 2000 Issue
Most companies have computer systems that use two digits
to identify a year in the date field (e.g. "99" for
1999). These systems must be modified to handle turn-of-
the century calculations. If not corrected, systems
failures or miscalculations could occur, potentially
causing disruptions of operations, including, among other
things, the inability to process transactions or engage
in other normal business activities. This creates
potential risk for all companies, even if their own
computer systems are Year 2000 compliant.
The Company is in the process of developing an ongoing
program of communication with suppliers and vendors to
determine the extent to which those companies are
addressing Year 2000 compliance issues. There can be no
assurance that the Company will be able to develop a
contingency plan that will adequately address issues that
may arise in the Year 2000.
In 1999, a contingency plan will be developed in the
event key or critical suppliers or vendors are unable to
meet the Year 2000 compliance. The timeframe for
completing or documenting contingency plans has not been
finalized.
The Company's Year 2000 plans are based on management's
best estimates. Based on currently available
information, management does not believe that the Year
2000 issues will have a material adverse impact on the
Company's financial condition or results of operations;
however, because of the uncertainties in this area, no
assurances can be given in this regard.
Item 7. Financial Statements
Financial statements as of and for the year ended August
31, 1998, and for the year ended August 31, 1997 are
presented in a separate section of this report following
Part IV.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
N/A
PART III
Item 9. Directors, Executive Officers and Compliance With
Section 16(a) of the Exchange Act
(a) Directors and Executive Officers
Thomas S. Hughes, 50, Chief Executive Officer, President
and Director of the Company since 1997. Founder of
Electronic Transactions and Technologies (formerly HPOS).
Jack M. Hall, 67, Director of the Company since 1997
D. Diane Hewitt, 50, Director of the Company since 1997.
(b) Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors, certain officers and
persons holding 10% or more of the Company's common
stock to file reports regarding their ownership and
regarding their acquisitions and dispositions of the
Company's common stock with the Securities and Exchange
Commission. The Company is unaware that any required
reports were not timely filed.
Item 10. Executive Compensation
The following table sets forth information concerning
compensation paid by BETTING, INC. for services rendered
during fiscal year 1998, 1997, and 1996 for the Chief
Executive Officer and for each of the Company's other
executive officers whose annual salary and bonus exceeds
$100,000.
Summary Compensation Table
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Name and Year Salary ($) Bonus ($) Other ($) Stock ($) SARs(#) ($) Options/ ($) Comp.
Principal
Position
Thomas 1998 -0- -0- -0- -0- -0- -0- -0-
Hughes
Thomas 1997 -0- -0- -0- 375,000 -0- -0- -0-
Hughes/
James S. 1996 -0- -0- -0- -0- -0- -0- -0-
Clinton,
President
and
Chief Execu-
tive Officer
</TABLE>
Perquisites and other personal benefits are omitted
because they do not exceed either $50,000 or 10% of the
total of annual salary and bonus for the named executive
officer.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of August 31, 1998, the
beneficial ownership of the Company's Common Stock by each person
who is known by the Company to own beneficially more than 5%
of the issued and outstanding shares of the Company's Common
Stock.
<TABLE>
<S> <C> <C>
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
James S. Clinton 1,417,000(1) 18.0%
30 Ginger Cove Road
Valley, NE 68064
Thomas S. Hughes 1,000,000 12.7%
31310 Eaglehaven Circle
Rancho Palos Verdes, CA 90275
</TABLE>
1 On January 24, 1996, Mr. Larry Langston entered into an Option
Agreement with Steven Walters, a former officer and
director of Leggoons, Inc., which grants Mr. Walters
an option to purchase 261,500 of Mr. Langston's
common stock shares. The option price is $100,000,
the option may not be exercised prior to November 23,
1996, and expires on July 24, 1997. Mr. Walters, in
turn, has assigned the right to purchase 130,750 of
such shares to the Claude E. Clinton Family Trust for
which Mr. Clinton, an officer and director of
Leggoons, Inc., acts as Trustee (Mr. Clinton is not
the beneficiary of the trust but has the right to
vote the shares) in consideration of $50,000 cash and
a loan to Mr. Walters in the amount of $50,000. The
option was exercised by Mr. Walters. However, the
shares are not included in the total shares for James
S. Clinton due to the additional shares being issued
after August 31, 1998.
The following table shows, as of August 31, 1998, certain
information with respect to BETTING, INC. Common Stock
beneficially owned by directors and executive officers of
the Company. Unless otherwise noted, all shares are
owned directly or indirectly with sole voting and
investment power.
<TABLE>
<S> <C> <C>
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
Thomas S. Hughes 1,000,000 12.7%
31310 Eaglehaven Circle
Rancho Palos Verdes, CA 90275
All officers and 1,000,000 12.7%
directors as a group
(1 individual)
</TABLE>
1 Shares reported include shares owned by spouses of officers and
directors. No options to acquire any BETTING, INC. common
stock are owned by any officer or director.
Item 12. Certain Relationships and Related Transactions
During the years ended August 31, 1998 and 1997, the
salient details of certain transactions which occurred
between the Company and its officers and directors are
set forth below. With respect to each such transaction,
the Company believes that the terms of each transaction
were approximately as favorable to the Company as could
have been obtained from an unrelated third party.
The Company utilized cash accounts maintained by HPOS to
fund day to day operations of the Company. Thomas S.
Hughes is the Chairman of both the Company and HPOS. At
August 31, 1998, the net result of these transactions is
a payable to HPOS of $18,969.
The Company issued 750,000 shares of restricted common
stock to James S. Clinton as full payment for an amount
due to stockholder of $35,135.
The Company issued 1,000,000 shares of restricted common
stock to Thomas S. Hughes during May 1997. The Company
did not receive any cash consideration for this common
stock issuance and has treated this as an expense to the
Company of $375,000.
The Company utilized cash accounts maintained by HPOS to
fund day to day operations of the Company. Thomas S.
Hughes is the Chairman of both the Company and HPOS. At
August 31, 1997, the net result of these transactions is
a receivable from HPOS of $38,071. At August 31, 1997,
the $38,071 has been expensed by the Company as licensing
fees that are due to HPOS.
The Company issued 286,234 shares of common stock valued
at $41,864 to former associates of Thomas S. Hughes at a
company called Betts, Inc.
PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) Index to Financial Statements and Schedules
See index to financial statements and supporting
schedules on page 13 of this annual report on Form 10-
KSB.
(b) Reports on Form 8-K
None
(c) Index to Exhibits
Any exhibits filed with the Securities and Exchange
Commission will be supplied upon written request of
Thomas S. Hughes, Betting, Inc., 31310 Eaglehaven Circle,
Rancho Palos Verdes, CA 90275. A charge will be made to
cover copying costs. See Exhibit Index below.
Number Exhibit Description
3.1 Leggoons, Inc. Articles of Incorporation and
Amendments, incorporated by reference to Exhibit
3.1 of Leggoons, Inc. Registration Statement on
Form S-1 filed on October 28, 1993.
3.2 Leggoons, Inc. Bylaws Amended, incorporated by reference to
Exhibit 3.2 of Leggoons, Inc. Registration Statement on Form S-1
filed on October 28, 1993.
3.3 Leggoons, Inc. Agreement to License Assets
4.2 Class A Warrant Agreement, incorporated by reference
to Exhibit 4.2 of Leggoons, Inc. Registration
Statement on Form S-1 filed on October 28, 1993.
10.1 Assignment for Benefit of Creditors, incorporated by
reference to Exhibit 10.1 of Leggoons, Inc., Form 8-K filed on
June 27, 1996.
BETTING, INC.
(Formerly Leggoons, Inc.)
Independent Auditor's Report
Financial Statements
Balance Sheet
Statements of Operations
Statements of Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to Financial Statements
George Brenner
CERTIFIED PUBLIC ACCOUNTANT
9300 WILSHIRE BOULEVARD, SUITE 490
BEVERLY HILLS CALIFORNIA 90212
AUDITOR'S REPORT
Board of Directors
Betting, Inc.
Rancho Palos Verdes
I have audited the accompanying balance sheet of
Betting, Inc. as of August 31, 1998 and the related
statements of operations, changes in stockholders'
equity, (deficit), and cash flows for the years ended
August 31, 1998 and 1997. These financial statements
are the responsibility of the Company's management. My
responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally
accepted auditing standards. Those standards require
that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Betting, Inc. as of August 31,
1998, and the results of its operations and its cash
flows for the years ended August 31, 1998 and 1997, in
conformity with generally accepted accounting
principles.
The accompanying financial statements have been
prepared assuming that the Company will continue as a
going concern. As more fully described in Note 8A
("Continued Existence") to the financial statements,
the Company's recurring losses from operations and
inability to generate sufficient cash flow from normal
operations raise substantial doubt about its ability
to continue as a going concern. Management's plans in
regard to these matters are also described in Note 8A.
The financial statements do not include any
adjustments to reflect the possible future effects on
the recoverability and classification of assets or the
amounts and classification of liabilities that may
result from the possible inability of the Company to
continue as a going concern.
As discussed in Note 8B ("Common Stock Issued in
Excess of Authorized Shares") the Company is
attempting to convert excess shares of common shares
issued to preferred shares. The effect, if any, of
this uncertainty on the future operations of the
Company cannot presently be determined.
Very truly yours,
/s/ George Brenner
George Brenner, CPA
April 7, 1999
Beverly Hills, California
BETTING, INC.
(formerly Leggoons, Inc.)
BALANCE SHEET
<TABLE>
<S> <C>
August 31, 1998
ASSETS
Current Assets:
Cash $0
Total current assets 0
Total Assets $0
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities:
Accounts payable $283,971
Due to related party 18,969
Commissions payable 21,400
Total current liabilities 324,340
Contingencies (Note 8)
Stockholders' Equity (Deficit):
Common stock, $.01 par value, authorized 142,842
10,000,000 shares; issued and outstanding,
14,284,234 (Note 8b)
Preferred stock, $.01 par value,
authorized 5,000,000 shares; issued and
outstanding - none (Note 8b)
Additional paid-in capital 5,000,420
Accumulated deficit (5,467,602)
Total stockholders' equity (deficit) (324,340)
Total Liabilities and Stockholders' Equity $0
(Deficit)
</TABLE>
See accompanying notes to financial statements and accompanying
auditor's report
BETTING, INC.
(formerly Leggoons, Inc.)
STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C>
Year Ended August Year Ended
31, 1998 August 31,
1997
Revenue $0 $0
Operating Expenses (Note 4)
Consulting Fees 122,020 565,740
General and Administrative 74,948 175,774
Expenses
Research and Development 0 450,331
Expenses
Software Development Costs 0 507,600
Total Operating Expenses (196,968) (1,699,445)
Net Loss (Note 1) $(196,968)$ (1,699,445)
Net Loss per Common Share $(.02) $(.41)
Weighted Average Common Shares 10,994,465 4,106,620
Outstanding
</TABLE>
See accompanying notes to financial statements and accompanying
auditor's report
BETTING, INC.
(formerly Leggoons, Inc.)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Number of common Par value Preferred stock Additional paid- Accumulated Stockholders'
shares in capital deficit equity (deficit)
Balance at August 2,787,000 27,870 0 3,522,792 (3,571,189) (20,527)
31, 1996
Issuance of 346,000 3,460 0 82,040 0 85,500
346,000 shares of
Common stock at
$.25 per share
(Cash Transaction)
Issuance of 2,999,734 29,997 0 925,708 0 955,705
2,999,734 shares
of Common stock
(1) (Non-Cash
Transactions)
Issuance of 1,710,500 17,105 0 324,995 0 342,100
1,710,500 shares
of Common stock at
$.20 per share
(Non-Cash
Transactions)
Net loss 0 0 0 0 (1,699,445) (1,699,445)
Balance at August 7,843,234 $78,432 $0 $4,855,535 ($5,270,634) ($336,667)
31, 1997
Issuance of 6,441,000 64,410 0 144,885 0 209,295
6,441,000 shares
of Common stock
at various $ per
share [1] (Non-
Cash Transactions)
Net loss 0 0 0 0 (196,968) (196,968)
Balance at August 14,284,234 $142,842 $0 $5,000,420 ($5,467,602) ($324,340)
31, 1998
</TABLE>
(1) S-8 common shares valued at market value on day of issuance;
Restricted common shares valued at market value on day of
issuance less 50% discount; Common shares for which no
performance was received valued at par value of $.01 per common
share.
See accompanying notes to financial statements and accompanying
auditor's report
BETTING, INC.
(formerly Leggoons, Inc.)
STATEMENTS OF CASH FLOWS
<TABLE>
<S> <C> <C>
Year Ended August Year Ended August
31, 1998 31, 1997
Operating Activities
Continuing operations:
Net loss (Note 7) $(43,808) $(401,640)
Changes in assets and
liabilities:
Accounts payable 21,793 270,839
Commissions payable 3,001 18,399
Cash Used in Operating (19,014) (112,402)
Activities
Financing Activities
Continuing operations:
Proceeds from additional 18,969 26,947
borrowings from stockholder
Proceeds from issuance of 0 85,500
common stock
Cash Provided by Financing 18,969 112,447
Activites
Net Increase (Decrease) in (45) 45
Cash
Cash at Beginning of Year 45 0
Cash at End of Year $0 $45
</TABLE>
Supplemental Disclosures:
The Company paid $0 and $0 for interest for the years ended
August 31, 1998 and 1997, respectively. The following summarizes
noncash investing and financing transactions:
<TABLE>
<S> <C>
Year Ended August 31, 1998
Issuance of 5,341,000 shares of common stock for services $153,16
rendered 0
Issuance of 750,000 shares of common stock for payment on 35,135
due to stockholder
Issuance of 350,000 shares of common stock for payment on 21,000
accounts payable
Year Ended August 31, 1997
Issuance of 4,710,234 shares of common stock for services $1,297,805
rendered
</TABLE>
See accompanying notes to financial statements and accompanying
auditor's report
BETTING, INC.
(formerly Leggoons, Inc.)
NOTES TO FINANCIAL STATEMENTS
Years ended August 31, 1998 and 1997
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Betting, Inc. (the "Company") is positioning itself to facilitate
same as cash ATM card or smart card transactions that are
originating from bank host processing centers and are being sent
to gaming operators. These transactions are being effected with
electronic equipment that allows self service pay per play and no
actual communications between the player and the gaming operator.
These type of transactions will be originating from homes,
offices, and public walk in locations. The Company will act as
the interface that will communicate data to the gaming operators,
receive back their acknowledgment of the transaction and then
pass on this gaming acknowledgment to the bank host processing
center that has been standing by for this information and has
already completed the bank authorization of the pay per play
transaction. The business model of the Company is to receive a
fee per transaction paid to Betting, Inc. by the bank host
processing center at the moment of the transaction. In general,
this fee will be from between 2% to 6% of the wager placed on a
pay per play or a $6 flat fee in the case of an account being
opened. The Company has many characteristics commonly associated
with a development stage company. A development stage company
devotes substantially all of its efforts to establishing a new
business and its planned principal operations either (a) have not
commenced or (b) have commenced, but have not produced any
significant revenue. However, due to the company's previously
established operation as a public shell, a development stage
company presentation is not appropriate for these financial
statements.
Leggoons, Inc., was engaged in the design, manufacture and
distribution of apparel and related accessories which were sold
to better specialty and department stores nationwide under the
brands: Leggoons, CPO by Leggoons, John Lennon Artwork Apparel
and Snooggel. On January 19, 1996, Leggoons, Inc., adopted a
formal plan to discontinue the designing, selling, manufacturing
and distribution of its apparel products. As part of such plan,
Leggoons, Inc., discontinued production on April 30, 1996, and
intended to either sell or liquidate the operations within twelve
months of that date. On June 12, 1996, Leggoons, Inc.,
transferred all of its assets and liabilities to a third party
assignee, under an "Assignment for Benefit of Creditors." An
Assignment is a business liquidation device available as an
alternative to bankruptcy. The third party assignee, a Nebraska
corporation named Leggoons, Inc. II, is required to properly,
timely and orderly dispose of all remaining assets for the
benefit of creditors. Leggoons, Inc., continued to maintain its
status as a shell corporation.
On February 18, 1997, Leggoons, Inc., entered into an Agreement
to License Assets from Home Point of Sales, Inc.(HPOS). HPOS is
a privately held corporation focused on the emergence of the
Personal Encrypted Remote Financial Electronic Card Transactions
industry. This industry provides consumers with the option to
instantly pay bills or impulse purchase from home with real time
cash transactions. Management believes the proprietary technology
and the large demand for wagering opportunities in today's
marketplace will combine to generate substantial sales for
Leggoons, Inc., over the medium term.
Under terms of the Licensing Agreement, the Company will issue
2,900,000 shares of restricted common stock to HPOS in exchange
for licensing home ATM card and SMART card wagering technology
developed by HPOS. Of this amount, 2,755,000 shares will be
placed in escrow and are subject to cancellation on February 10,
1998, in the event the bid price of the common stock of the
Company is not at least $3.00 per share for any twenty
consecutive day period as reported on the NASD's Electronic
Bulletin Board or NASDAQ's Small Cap Market from the date of the
agreement through February 10, 1998.
As of the date of these financial statements the terms of the
Licensing Agreement have not been met by the Company. However,
the Company has entered into amendment(s) of the original
agreement that provide for an extension of the cancellation
deadline from February 10, 1998, to September 1, 1999, subject to
certain conditions specified in the agreement. As of the date of
these financial statements, none of the conditions have been met.
All condtions set forth in the original agreement need to be met
on or before September 1, 1999.
See accompanying auditor's report
The License Agreement also provides that in the event that the
bid price for the common stock of the Company is more than $3.00
per share for any twenty consecutive day period, then HPOS shall
have the option to purchase up to 13,822,000 additional shares of
the Company common stock at an exercise price of $.30 per share.
Thomas S. Hughes, Chairman of HPOS, became Chairman and President
of Leggoons on March 1, 1997. He will focus on procedures,
policies and State approvals to begin home lottery, off track
betting, casino and sports ATM card and SMART card wagering. The
Company intends to seek shareholder approval of its name change
from Leggoons, Inc. to Betting, Inc.
REVENUE RECOGNITION
Revenue from product sales is recognized upon consummation of a
transaction
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, demand deposits,
and short-term investments with original maturities of three
months or less.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are charged to expense when
incurred. Costs incurred to internally develop software,
including costs incurred during all phases of development, are
charged to expense as incurred.
STOCKHOLDERS' EQUITY
The following valuation policies were used so that a financial
value can be assigned to stock issuance transactions: the closing
"market" stock price on the day of each common stock issuance was
used to determine "fair market value" of unrestricted common
shares issued; the closing "market" stock price on the day of
each common stock issuance less a 50% discount was used to
determine "fair market value" of restricted common shares issued.
Common shares that were issued and for which no performance was
received were valued at par value, $.01 per share.
EARNINGS (LOSS) PER COMMON SHARE
Net earnings (loss) per common share is computed using the
weighted average number of common and common equivalent shares
outstanding during the period. Shares issuable pursuant to
outstanding stock warrants have been excluded from the
computation as the effect is antidilutive. Fully diluted net
loss per share for all periods presented is not materially
different from primary loss per share.
DEFERRED INCOME TAXES
Deferred income taxes are recognized for temporary differences
between the bases of assets and liabilities for financial
statement and income tax purposes. If it is more likely than not
that all or some portion of a deferred tax asset will not be
realized, a valuation allowance is recorded. (See Note 2)
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
See accompanying auditor's report
(2) INCOME TAXES
Betting, Inc., has unused net operating loss (NOL) carryforwards
of approximately $2,800,000 at August 31, 1998, that were
generated by Leggoons, Inc. The unused net operating losses
expire in various amounts from 2009 to 2012. However, due to
change of ownership rules of section 382 of the Internal Revenue
Code some or all of these NOL carryforwards may be unavailable to
offset any future income of Betting, Inc. The Company generated
losses of approximately $1,658,000 during the six month period
ended August 31, 1997, and losses of approximately $197,000
during the year ended August 31, 1998. These losses, totaling
$4,655,000 may not qualify as federal and state NOL carryforwards
due to the possible nondeductibility of the noncash service costs
incurred and the change of ownership rules of section 382 of the
Internal Revenue Code. The Company provides an allowance for the
entire amount of any deferred tax assets that are applicable to
the NOL.
(3) COMMON STOCK WARRANTS
The Company had outstanding warrants to purchase approximately
900,000 shares of common stock. The warrants were exercisable at
$3.75 per share and expired on November 18, 1997.
(4) STOCKHOLDERS' EQUITY (DEFICIT)
During the period September 1, 1997, through August 31, 1998, the
Company issued 6,441,000 shares of common stock for services
rendered and payments on accounts payable. For the shares of
common stock issued for services rendered during the period
September 1, 1997, through August 31, 1998, the following
valuation policies were used so that a financial value could be
assigned to the stock issuance transactions: the closing "market"
stock price on the day of each common stock issuance was used to
determine "fair market value" of the 1,369,000 unrestricted
common shares issued; the closing "market" stock price on the day
of each common stock issuance less a 50% discount was used to
determine "fair market value" of the 2,322,000 restricted common
shares issued. Common shares that were issued and for which no
performance was received, 2,750,000 shares, were valued at par
value, $.01 per share. For the 2,750,000 shares of common stock
issued for which no performance was received a stop has been
placed on the stock certificates with the Company's stock
transfer agent.
For the period September 1, 1997, through August 31, 1998, the
financial value of the common stock issued for no cash
consideration is required to be expensed by the Company. The
"fair market value" of such common stock issued, $153,160, has
primarily been expensed as $122,020 in consulting fees and
$31,140 in general and administrative expenses during the year
ended August 31, 1998. Some of the common stock shares issued
were registered with the Securities and Exchange Commission using
Form S-8 Registration Statements.
During the period March 1, 1997, through August 31, 1997, the
Company issued 4,710,234 shares of common stock for services
rendered. For the 2,999,734 shares of common stock issued for
services rendered during the period March 1, 1997, through May
31, 1997, the following valuation policies were used so that a
financial value could be assigned to the stock issuance
transactions: the closing "market" stock price on the day of each
common stock issuance was used to determine "fair market value"
of the 520,000 unrestricted common shares issued; the closing
"market" stock price on the day of each common stock issuance
less a 50% discount was used to determine "fair market value" of
the 1,725,734 restricted common shares issued. Common shares that
were issued and for which no performance was received, 754,000
shares, were valued at par value, $.01 per share. For the
1,710,500 shares of common stock issued for services rendered
during the period June 1, 1997, through August 31, 1997, an
average closing stock price of $.20 was used to determine "fair
market value" of each share issued so that a financial value
could be assigned to the stock issuance transactions.
For the period September 1, 1996, through August 31, 1997, the
financial value of the common stock issued for no cash
consideration is required to be expensed by the Company. The
"fair market value" of such common stock issued, $1,297,805, has
primarily been expensed as $304,240 in consulting fees, $445,128
in research and development costs, $500,000 in software
development costs and $48,437 in general and administrative
expenses during the year ended August 31, 1997. Some of the
common stock shares issued were registered with the Securities
and Exchange Commission using Form S-8 Registration Statements.
See accompanying auditor's report
(5) RELATED PARTY TRANSACTIONS
COMMON STOCK ISSUED
The Company issued 1,000,000 shares of restricted common stock to
Thomas S. Hughes during the year ended August 31, 1997. The
Company did not receive any cash consideration for this common
stock issuance and was valued at $375,000. See Note (4).
The Company issued 286,234 shares of restricted common stock to
former asscoiates of Thomas S. Hughes at a company called Betts,
Inc. The restricted common shares were valued at $41,864.
TRANSACTIONS WITH HPOS
The Company utilized cash accounts maintained by HPOS to fund day
to day operations of the Company. Thomas S. Hughes is the
Chairman of both the Company and HPOS. At August 31, 1998, the
net result of these transactions is a payable to HPOS of $18,969.
DUE TO STOCKHOLDER
The Company had a due to stockholder payable to James S. Clinton,
former Chairman of Leggoons, Inc., in the amount of $35,135 for
advances made to Leggoons, Inc., prior to March 1, 1997. This
was paid in full by the issuance of 750,000 shares of restricted
common stock during the year ended August 31, 1998.
(6) FOURTH QUARTER ADJUSTMENTS (UNAUDITED)
In the fourth quarter of 1998 and 1997, the Company recorded
adjustments that increased its net loss by approximately $27,500
and$1,558,000, respectively. These adjustments were primarily
related to the issuance of common stock for no cash
consideration.
(7) CASH FLOW AND INCOME STATEMENT RECONCILIATION
The following reconciles noncash financing transactions for the
years ended August 31, 1998 and August 31, 1997:
<TABLE>
<S> <C> <C>
1998 1997
Net loss from Continuing Operations $43,808 401,640
Issuance of common stock for Consulting 153,160 1,297,805
Fees and General and Administrative
Expenses
Income Statement Net Loss $196,968 $1,699,445
</TABLE>
See accompanying auditor's report
(8) CONTINGENCIES
(A) CONTINUED EXISTENCE
The Company's financial statements are presented on the going
concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. As
shown in the accompanying financial statements, the Company has
shown a significant loss from operations and has negative working
capital and a stockholders' deficit. This raises substantial
doubt about the Company's ability to continue.
The Company's continued existence is dependent upon its ability
to resolve its liquidity problems, principally by obtaining
additional debt financing and equity capital and ultimately upon
achieving profitability. While pursuing additional debt and
equity funding, the Company must continue to operate on limited
cash flow. Management is committed to developing the product and
continues to receive small amounts of funding from private
investors. It is the goal of management to receive additional
funding from an additional public offering of its common stock
within twelve months.
There is no assurance that the Company can achieve the
profitability and positive liquidity discussed above. The
financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and
classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the
Company to continue as a going concern.
(B) COMMON STOCK ISSUED IN EXCESS OF AUTHORIZED SHARES
During the year ended August 31, 1998, the Company issued a total
of 6,441,000 shares of common stock. This has resulted in the
total issued common shares exceeding the 10,000,000 common shares
authorized by 4,284,234 common shares. Most of these shares were
to have been preferred stock. Due to an error that was
discovered after the close of the year, however, all of the
shares were issued as common shares, resulting in the Company
issuing more common shares than its articles of incorporation
authorize. The Company is in the process of "recalling" these
certificates totaling 4,550,000 shares and replacing them with
preferred certificates. The net result will not be significantly
different. Holders of preferred shares will have a priority over
common stockholders with respect to dividends and liquidation
rights, but no dividends are required or anticipated. The
preferred stockholders will have voting rights equal to those of
the common stockholders. The stockholders' equity (deficit)
section of the balance sheet then would be restated as follows to
take into account the preferred stock:
<TABLE>
<S> <C> <C> <C>
August 31, 1998 Proforma Restated August
Adjustment 31, 1998
Stockholders' Equity
(Deficit):
Common stock, $.01 par $142,842 $(45,500) $97,342
value, authorized
10,000,000 shares;
issued and outstanding,
9,734,234
Preferred stock, $.01 0 45,500 45,500
par value, authorized
5,000,000 shares; issued
and outstanding -
4,550,000
Additional paid-in 5,000,420 0 5,000,420
capital
Accumulated deficit (5,467,602) 0 (5,467,602)
Total stockholders' $(324,340) $0 $(324,340)
equity (deficit)
</TABLE>
(9) SUBSEQUENT EVENTS (UNAUDITED)
CONSENT DECREE ENTERED WITH SECURITIES AND EXCHANGE COMMISSION
The Company has not, to the date of this report, filed necessary
quarterly or annual reports with the United States Securities and
Exchange Commission (the "SEC") since May 31, 1998. This
constitutes a violation by the Company of a provision of the
Securities Exchange Act of 1934, as amended. The Company entered
into a consent decree with the SEC by which the Company agreed to
file all necessary reports by April 9, 1999, and agreed to file
all required reports with the SEC on a timely basis in the
future.
See accompanying auditor's report
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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 on April 5, 1999.
BETTING, INC.
By: /s/ Thomas S. Hughes
Thomas S. Hughes
Chairman of the Board,President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
/s/ Thomas S. Hughes
Thomas S. Hughes
Chairman of the Board, Date April 7, 1999
President, Chief Financial
Officer and Director
/s/ Jack M. Hall
Jack M. Hall
Director Date April 7, 1999
/s/ D. Diane Hewitt
D. Diane Hewitt
Director Date April 7, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 324340
<BONDS> 0
0
0
<COMMON> 142842
<OTHER-SE> (467188)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 196968
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (196968)
<INCOME-TAX> 0
<INCOME-CONTINUING> (196968)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (196968)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
