U.S. 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 December 31, 1998
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: 0-24742
U.S. WIRELESS CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
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Delaware 13-3704059
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
2303 Camino Ramon, Suite 200, San Ramon, California 94583
(Address of Principal Executive Offices)
(925) 327-6200
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Check whether the issuer (1) filed all documents and reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
[X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock, par value $.01
per share, 13,556,188 shares outstanding as of January 31, 1999.
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
CONTENTS
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Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets as of December 31, 1998 (unaudited)
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and March 31, 1998 3
Consolidated statements of operations (unaudited) for the three months
and nine months ended December 31, 1998 and December 31, 1997 4
Consolidated statements of cash flows (unaudited) for the nine months
ended December 31, 1998 and December 31, 1997 5
Notes to financial statements 6-8
Item 2. Manangement's Discussion And Analysis of
Financial Condition And Results of Operations 9-12
PART II. OTHER INFORMATION 12
Signatures 13
</TABLE>
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
As of December 31, 1998 and March 31, 1998
<TABLE>
<CAPTION>
December 31, March 31,
1998 1998
(Unaudited) (Note 1)
ASSETS
CURRENT ASSETS:
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Cash and cash equivalents ............................................................ $ 4,128,665 $ 2,285,750
Inventory ............................................................................ 50,756 --
------------ ------------
Total Current Assets ................................................................. 4,179,421 2,285,750
EQUIPMENT, IMPROVEMENTS AND FIXTURES, net of accumulated depreciation and amortization
530,661 399,896
OTHER ASSETS
Investment in joint venture ......................................................... 400,000 --
Security Deposit .................................................................... 25,035 25,035
Total Other Assets ........................................................ 425,035 25,035
============
Total Assets ............................................................... $ 5,135,117 $ 2,710,681
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses ................................................ $ 343,534 $ 252,708
Obligations under capital leases, current ............................................ 15,192 15,192
Total current liabilities .................................................. 358,726 267,900
Obligations under capital leases, noncurrent ......................................... 23,926 39,118
Total Liabilities .......................................................... 382,652 307,018
MINORITY INTEREST IN SUBSIDIARY ...................................................... 190,764 195,305
STOCKHOLDERS' EQUITY:
Series A Preferred stock, $.01 par value, 400,000 shares
authorized; issued and outstanding at Dec. 31, 1998
70,000 shares ...................................................................... 700 --
Common stock, $.01 par value, 40,000,000 shares
authorized; issued and outstanding at Dec. 31, 1998
13,556,301 shares; at March 31, 1998, 11,823,444 shares ........................... 135,563 118,234
Additional paid-in capital ........................................................... 25,309,532 19,912,890
Unearned compensation ................................................................ (374,078) (761,438)
Accumulated Deficit .................................................................. (20,510,016) (17,061,328)
TOTAL STOCKHOLDERS' EQUITY ................................................. 4,561,701 2,208,358
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $ 5,135,117 $ 2,710,681
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
Nine Months Ended Three Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1998 1997
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Net sales ...................................................... $ 39,729 $ -- $ 39,729 $ --
Costs and expenses:
Operating expenses .......................................... 3,726,427 2,583,059 1,380,358 927,335
Loss before other income and minority interest
in net loss (income) of continuing subsidiary
(3,686,698) (2,583,059) (1,340,629) (927,335)
Other income:
Interest income ............................................. 233,468 167,861 65,610 53,359
Loss before minority interest in net loss (income) of subsidiary
(3,453,230) (2,415,198) (1,275,019) (873,976)
Minority interest in net loss of subsidiary .................... 4,541 44,985 (20,315) 18,438
Net loss ....................................................... $ (3,448,689) $ (2,370,213) $ (1,295,334) $ (855,538)
============ ============ ============ ============
Basic and diluted loss per common equivalent share:
Loss before minority interest in net loss (income)of subsidiary
(.26) (.32) (.10) (.12)
Minority interest in net loss (income) of subsidiary ........ -- -- -- --
Basic and diluted net loss ..................................... $ (.26) $ (.32) $ (.10) $ (.12)
============ ============ ============ ============
Weighted average number of common
shares outstanding .......................................... 13,171,222 7,325,245 13,556,301 7,325,245
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash
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<CAPTION>
Nine Months Ended
Dec. 31, Dec. 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss ................................................................. $(3,448,689) $(2,370,213)
Adjustments to reconcile net loss to cash (used) for operating activities:
Depreciation .......................................................... 190,000 176,648
Minority interest in net loss of subsidiary ........................... (4,541) (44,985)
Amortization of unearned compensation ................................. 387,360 387,360
Increase (Decrease) from changes in assets and liabilities:
Increase in inventory ................................................. (50,756) --
Accounts payable and accrued expenses ................................. (90,828) (51,905)
Net cash (used) for operating activities ....................... (2,835,798) (1,903,095)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment, improvements and fixtures ................... (320,766) (335,503)
Investment in Joint Venture ........................................... (400,000)
Net cash used for investing activities ......................... (720,766) (335,503)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations ................................. (15,192) (18,927)
Proceeds from issuance of preferred stock and common shares ........... 1,400,000 --
Issuance of common shares ............................................. 4,014,671 --
Net cash (used) for financing activities ................................. 5,399,479 (18,927)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ..................... 1,842,915 (2,257,525)
Cash, beginning of period ................................................ 2,285,750 5,328,781
Cash, end of period ...................................................... $ 4,128,665 $ 3,071,256
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid .......................................................... $ -- $ --
Taxes paid ............................................................. $ 1,248 $ 4,800
</TABLE>
See accompanying notes to consolidated condensed financial statements
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for the
interim financial information and the instructions to Form 10-QSB. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, the interim financial statements include all adjustments
considered necessary for a fair presentation of the Company's financial
position, results of operations and cash flows for the nine months ended
December 31, 1998. These statements are not necessarily indicative of the
results to be expected for the full fiscal year. These statements should be read
in conjunction with the financial statements and notes thereto included in the
Company's annual report Form 10-KSB for the fiscal year ended March 31, 1998 as
filed with the Securities and Exchange Commission.
NOTE 2 - ORGANIZATION:
Consolidation of Labyrinth Communication Technologies Group, Inc.
In March 1998, the Company consummated the consolidation of its subsidiary,
Labyrinth with and into the Company. In accordance with exchange offers
submitted to the stockholders of Labyrinth representing 49% minority interest in
Labyrinth, the Company exchanged 4,498,200 shares of its common stock for
490,000 share of common stock of Labyrinth. The shares of Common Stock issued in
accordance with the exchange, are subject to a vesting schedule.
In accordance with the provisions of Accounting Principles Board ("APB")
Opinion No. 16 and interoperations thereof, this acquisition of minority
interest was accounted for using the purchase method of accounting. As of
December 31, 1998, 829,252 shares of the Company's common stock have vested as
defined by the Exchange Offer, and have been issued to former Labyrinth
stockholders. The remaining 3,668,948 shares of the Company's common stock
provided for in the Exchange Offer have not vested and are currently held in
escrow until vested. Shares of the Company's common stock that do not vest shall
be cancelled and returned to the Company's treasury as unissued common stock.
NOTE 3 - EQUIPMENT, IMPROVEMENTS AND FIXTURES:
Equipment, improvements and fixtures, net at December 31, 1998 and March
31, 1998 consisted of the following :
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Dec. 31, March 31,
1998 1998
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Furniture, fixtures and equipment $970,310 $649,544
Less: accumulated depreciation and amortization (439,649) (249,648)
$530,661 $399,896
======== ========
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U.S. WIRELESS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 4 - STOCK OPTIONS:
During the year ended March 31, 1998, the Company issued common stock
options to its employees and to various consultants performing services for the
Company.
The options granted to employees vest over three years, expire five years
from the date of the grant and have exercise prices ranging from $2 to $5 per
share.
Substantially, all of the options granted to consultants vest immediately,
expire five years from the date of grant and have exercise prices ranging from
$2 to $5 per share. On December 31, 1998, there were options to purchase up to
an aggregate of approximately 5,300,000 shares of Common Stock granted to
executive officers, director, employees and consultants, subject to various
vesting schedules.
The value of the options granted was established by the difference between
the exercise price and the fair market value of the options issued on the dates
of grant, were accounted for as unearned compensation and amortized and expensed
over the related vesting periods. During each of the nine month periods ended
December 31, 1998 and 1997, $387,360 of unearned compensation was amortized to
expense. The remaining unamortized balance of unearned compensation at December
31, 1998 was $374,078 as reflected in the accompanying balance sheet.
NOTE 5 - PREFERRED STOCK:
The Company has authorized the issuance of 1,000,000 shares of Preferred
Stock of which 400,000 have been designated as Series A Preferred Stock. As of
December 31, 1998, 70,000 shares of Series A Preferred Stock have been issued
and are currently outstanding. See notes 7 and 8. The balance of the authorized
shares of Preferred Stock are subject to designation of their rights and
preferences to be determined by the Company's Board of Directors. The Series A
Preferred shares have a cumulative dividend of 6% per annum, payable in cash or
shares of Series A Preferred Stock, at the option of the Company. The shares are
convertible into shares of the Company's Common Stock, commencing 90 days from
issuance. Each share is convertible into approximately 6.78 shares of Common
Stock. Each share of Series A Preferred Stock has a liquidation preference of
$20.00 per share, plus accrued and unpaid dividends.
The Series A Preferred Stock is redeemable by the Company at any time, at a
redemption price of $20.00 per share, upon the earlier of (i) three years from
issuance, and (ii) upon the closing price for the Common Stock being $8.00 for
any consecutive 30 day period ending on the date that the Company gives notice
of redemption to the holders. The Company shall give the holders, 20 days' prior
notice, during which time the shares of Series A Preferred Stock shall be
convertible into shares of Common Stock.
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 6 - YEAR 2000 COMPUTER ISSUE:
The Company does not believe that the impact of the year 2000 computer
issued will have a significant impact on its operations of financial position.
Furthermore, the Company does not believe that it will be required to
significantly modify its internal computer systems or products currently under
development. However, if internal systems do not correctly recognize date
information when the year changes to 2000, there could be adverse impact on the
Company's operations. Furthermore, there can be no assurance that another
entity's failure to ensure year 2000 capability would not have an adverse effect
on the Company.
NOTE 7 - PRIVATE PLACEMENT:
In June 1998 the Company consummated a private equity financing,
aggregating in excess of $5 million through Gerard Klauer Mattison & Co., Inc.,
New York, New York, as its placement agent. The Company sold shares of its
Series A Preferred Stock and shares of Common Stock. The placement agent
received a commission of $150,000 and options to purchase 220,000 shares of
Common Stock, one-half at an exercise price of $4.00 per share and the balance
at $5.00 per share.
NOTE 8- JOINT VENTURE AGREEMENT:
On July 31, 1998 the Company entered into a joint venture agreement with
Anam Instruments, Inc. a Korean corporation, ("ANAM") whereby the Company and
ANAM formed Wireless Technology, Inc. ("WTI"), a corporation duly organized and
having offices in the Republic of Korea. WTI was formed as a joint venture for
the purposes of developing a Code Division Multiple Access "CDMA" interface for
the RadioCamera, manufacturing and producing the RadioCamera and marketing and
distribution the RadioCamera in Korea and potentially other Asian countries.
The joint venture established a two phase initial funding for operations
totaling $3,500,000, of which $2,300,000 has been raised to date and the balance
scheduled to be raised during this fiscal year. In connection with the formation
of the joint venture, the Company received an investment of $400,000 from ANAM,
for 20,000 shares of Series A Preferred Stock. The proceeds of the investment in
the Company were used by the Company as a capital investment in WTI. In
addition, ANAM invested $800,000 directly into WTI. At present ANAM owns 67% and
the Company owns 33% of WTI.
<PAGE>
U.S. WIRELESS CORPORATION AND SUBSIDIARY
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
U.S. Wireless Corporation (the "Company") was incorporated in the State of
Delaware in February 1993. Until March 1998, the Company had two subsidiaries,
Labyrinth Communication Technologies Group, Inc. ("Labyrinth") and Mantra
Technologies, Inc. ("Mantra"). In January 1998, the Company submitted an
exchange offer to the holders of the 49% minority interest in Labyrinth, which
exchange was effected in March 1998, upon which Labyrinth was consolidated with
and into the Company. Due to the consolidation of Labyrinth, the results from
operations for the nine months ended December 31, 1998 has been adjusted to
eliminate the minority interest, which is not provided within the comparison
information for the nine months ended December 31, 1997. There is no change in
the focus or operations of the Company as a result of the consolidation. The
comparison information for the periods does continue to reflect the Company's
one subsidiary, Mantra.
Statements contain herein which are not historical facts may be considered
forward looking information with respect to plans, projections or future
performance of the Company as defined under the Private Securities Litigation
Reform Act of 1995. These forward looking statements are subject to risk and
uncertainties which could cause actual results to differ materially from those
projected.
Three months ended December 31, 1998 compared to the three months ended
December 31, 1997:
Consolidated operating revenues for the three months ended December 31,
1998, were $39,729. Revenues were attributable to sales generated by the
Company's Internet subsidiary, Mantra Technologies, Inc., with respect to its
license agreement with LookSmart Ltd. The Company did not report operating
revenues from its core wireless activities during the current or prior period.
Consolidated operating expenses were $1,380,358 for the three months ended
December 31, 1998, compared to $927,335 for the three months ended December 31,
1997. Increased operating expenses were primarily attributable to additional
costs incurred for engineering, research and development related to the
continued refinement, testing and deployment of the Company's RadioCamera(TM)
System. During the third quarter, the Company expanded deployment of its
RadioCamera System in accordance with beta testing and evaluation agreements
entered into previously with Bell Atlantic Mobile in Baltimore, Maryland and
Western Wireless Corp., in Billings, Montana. During this period, the Company
successfully completed the first phase of the Bell Atlantic trial and began the
second phase, an expanded trial. In Billings, Montana, the Company began an
end-to-end trial, which includes the Billings Public Safety Access Point.
Additionally, the Company continued its development of CDMA and TDMA interfaces
for the RadioCamera System and has built prototypes for field trials, which are
expected to begin during the next quarter.
Nine months ended December 31, 1998 compared to the nine months ended
December 31, 1997:
Consolidated revenues from operations for the nine months ended December
31, 1998 were $39,729. Revenues were attributable to sales generated by the
Company's Internet subsidiary, Mantra Technologies, Inc., with respect to its
license agreement with LookSmart Ltd. The Company did not report operating
revenues from its core wireless activities during this or the prior period.
Consolidated operating expenses were $3,726,427 during the nine months
ended December 31, 1998, compared to $2,583,059 for the nine months ended
December 31, 1997. Increased expenses were primarily attributable to additional
costs incurred for engineering, research and development related to the
continued refinement, testing and deployment of the Company's RadioCamera(TM)
System. During the third quarter, the Company expanded deployment of its
RadioCamera System in accordance with beta testing and evaluation agreements
entered into previously with Bell Atlantic Mobile in Baltimore, Maryland and
Western Wireless Corp., in Billings, Montana. During this period, the Company
successfully completed the first phase of the Bell Atlantic trial and began the
second phase, an expanded trial. In Billings, Montana, the Company began an
end-to-end trial, which includes the Billings Public Safety Access Point.
Additionally, the Company continued its development of CDMA and TDMA interfaces
for the RadioCamera System and built prototypes for field trials, expected to
begin next quarter.
<PAGE>
Research and Development-Future Operations:
The Company has devoted and expects to continue to devote substantial
financial and managerial resources to the development and deployment of a fully
operational geo-location system. The Company also plans to continue to develop,
modify and deploy RadioCamera Systems for additional wireless standards
including CDMA and TDMA over the coming 12 months. Management estimates research
and development expenditures for the year ending March 31, 1999 will approximate
$4,200,000.
During the quarter, the Company commenced its joint beta field trials with
Bell Atlantic Mobile in Baltimore, Maryland and set up a fully operational
end-to-end, live E-911 demonstration in Billings, Montana, linking the
RadioCamera System within the Western Wireless network to a Billings, Montana
Public Safety Access Point. This trial is currently being expanded to encompass
all connections and applications necessary for commercial use.
In July 1998 the Company entered into a joint venture agreement with Anam
Instruments, Inc., a Korean corporation, ("ANAM") whereby the Company and ANAM
have formed Wireless Technology, Inc. ("WTI"), a corporation duly organized and
having offices in the Republic of Korea. The joint venture established a two
phase initial funding for operations totaling $3,500,000, of which $2,300,000
has been raised to date and the balance scheduled to be raised during this
fiscal year. In connection with the formation of the joint venture, the Company
received an investment of $400,000 from ANAM, for 20,000 shares of Series A
Preferred Stock. The proceeds of the investment were used by the Company as a
capital investment in WTI. In addition, ANAM invested $800,000 directly into
WTI. At present ANAM owns 67% and the Company owns 33% of WTI.
Liquidity and Capital Resources:
At December 31, 1998, the Company reported working capital of $3,820,695.
The Company had $4,128,665 in cash and cash equivalents. The Company believes
that its available cash, as of December 31, 1998, will be sufficient to fund its
current operations for the next 12 months, however, the Company does expect to
seek additional funding in the next quarter to expand operations, undertake
additional beta trials and purchase inventory for anticipated commercial
deployments.
In June 1998, the Company consummated a private equity financing,
aggregating $5.13 million of which a commission of $150,000 was paid to the
placement agent. Funding for the Company's CDMA project is expected to continue
to come from the Company's joint venture, WTI, which has already secured
$2,300,000 in financing out of a committed $3,500,000, in debt and equity
securities, of which the Company has invested $400,000 from funds invested by
ANAM in the Company.
In September 1998, the Company's subsidiary, Mantra, entered into a
licensing agreement with LookSmart Ltd. Mantra, using its Context Synthesis(TM)
technology, developed a strategic application for LookSmart and its partners to
enhance the quality of text searches into LookSmart's web directories.
Trends affecting liquidity, capital resources and operations:
As the nature of the Company's operations are currently research and
development oriented, management is currently not aware of any trends that may
affect its liquidity, capital, resources and operations, other than the lack of
additional funding when necessary for operations and delays in the
commercialization of the Company's product in the marketplace. The Company's
future operations could be adversely affected if the Company's timetable for the
development, marketing and manufacturing of its products exceeds the available
capital resources. The primary expenses of its operations will include the
salaries of its executive officers, management and employees who comprise the
research, development, field operations, marketing, carrier relations, and
<PAGE>
corporate communication teams. Depending on this demand for its products, the
Company anticipates needing additional financing in the future for manufacturing
and expansion of operations from primarily research and development to
commercial deployment, which will include manufacturing, expanded field
operations, commercial support services as well as increased administrative,
selling and general expenses. The Company's limited resources, in addition to
its anticipated continued research, development and testing may cause
significant strain on the Company's management, technical, financial and other
resources. The Company expects to meet future capital requirements through
vendor financing and through the sale of the Company's securities. There can be
no assurances that additional funding will be available to the Company when
needed or if available on terms acceptable to the Company.
Inflation and seasonality are currently not expected to have a material
effect on the Company's liquidity, capital resources and operating activities.
Year 2000 Computer Issue:
The Company does not believe that the impact of the year 2000 computer
issue will have a significant impact on its products, operations or financial
position. Furthermore, the Company does not believe that it will be required to
significantly modify its internal computer systems or products currently under
development. However, if internal systems do not correctly recognize date
information when the year changes to 2000, there could be adverse impact on the
Company's operations. Furthermore, there can be no assurance that another
entity's failure to ensure year 2000 capability would not have an adverse effect
on the Company.
<PAGE>
PART II. Other Information
ITEM 1. Legal Proceeding: None
ITEM 2. Changes in Securities and Use of Proceeds: None
ITEM 3. Defaults Upon Senior Securities: None
ITEM 4. Submission of Matters to a Vote of Security Holders: None
ITEM 5. Other Information: None
ITEM 6. Exhibits and Reports on Form 8-K: None
<PAGE>
SIGNATURES
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.
U.S. Wireless Corporation
(Registrant)
February 12, 1999 By:\s\ Dr. Oliver Hilsenrath
- ----------------- -------------------------
Date Dr. Oliver Hilsenrath
Chief Executive Office
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<ARTICLE> 5
<LEGEND>
U.S. WIRELESS CORPORATION
EXHIBIT 27.01
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
financial statements for the nine months ended December 31, 1998 and is
qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> mar-31-1999
<PERIOD-END> dec-31-1998
<CASH> 4,128,665
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 50,756
<CURRENT-ASSETS> 4,179,421
<PP&E> 970,310
<DEPRECIATION> (439,649)
<TOTAL-ASSETS> 5,135,117
<CURRENT-LIABILITIES> 358,726
<BONDS> 0
0
700
<COMMON> 135,563
<OTHER-SE> 4,425,438
<TOTAL-LIABILITY-AND-EQUITY> 5,135,117
<SALES> 39,729
<TOTAL-REVENUES> 273,197
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,726,427
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,448,689)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,448,689)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
</TABLE>
