<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 0-28270
CHILDREN'S WONDERLAND, INC.
________________________________________________________________________________
(Exact name of small business issuer as specified in its charter)
California 95-4455341
________________________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
28310 Roadside Drive, Suite 220, Agoura, California 91301
________________________________________________________________________________
(Address of principal executive offices)
(818) 865-1306
________________________________________________________________________________
(Issuer's telephone number)
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 [ ] NO [ X ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of June 14, 1996, the Registrant had outstanding 3,974,947 shares of Common
Stock, no par value, and 3,037,500 Warrants to purchase one share of Common
Stock at $5.00 per share.
This report, including all exhibits and attachments, contains 15 pages.
<PAGE> 2
CHILDREN'S WONDERLAND, INC.
FORM 10-QSB
For the Quarter Ended March 31, 1996
INDEX
<TABLE>
<CAPTION>
Page
Numbers
_________
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheets as of March 31, 1996 and June 30, 1996 3
(b) Statements of Operations for the three months and nine months 5
ended March 31, 1996 and 1995
(c) Statements of Cash Flows for the nine months ended March 31, 1996 6
and 1995
(d) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE> 3
CHILDREN'S WONDERLAND, INC.
BALANCE SHEETS
MARCH 31, 1996 (UNAUDITED) AND JUNE 30, 1995
________________________________________________________________________________
ASSETS
<TABLE>
<CAPTION>
March 31, 1996
(See Note 1) June 30, 1995
-------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 54,290 $ 65,072
Accounts Receivable, net of allowance for doubtful
accounts of $24,567 and $29,473 as of March 31,
1996 and June 30, 1995, respectively 104,948 70,783
Prepaid Expenses 136,306 57,223
-------------- --------------
Total Current Assets 295,544 193,078
EQUIPMENT & IMPROVEMENTS, NET 425,178 241,666
CAPITALIZED LAND & BUILDING LEASE
(Net of accumulated amortization of $169,572 and
$141,825 as of March 31, 1996 and June 30, 1995,
respectively) 844,781 872,528
INTANGIBLE ASSETS, NET 1,261,649 593,253
DEPOSITS AND OTHER 182,583 178,355
-------------- --------------
TOTAL ASSETS $ 3,009,735 $ 2,078,880
============== ==============
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
CHILDREN'S WONDERLAND, INC.
BALANCE SHEETS
MARCH 31, 1996 (UNAUDITED) AND JUNE 30, 1995
________________________________________________________________________________
LIABILITIES
<TABLE>
<CAPTION>
March 31, 1996
(See Note 1) June 30, 1995
-------------- --------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts Payable $ 1,043,567 $ 336,937
Accrued Expenses 516,542 889,558
Due to Stockholders 395,000 361,000
Current Portion of Long Term Debt 882,954 126,982
Current Portion of Capitalized Lease Obligation 125,000 125,000
-------------- --------------
Total Current Liabilities 2,963,063 1,839,477
-------------- --------------
LONG TERM DEBT, less current portion 1,571,110 1,485,567
-------------- --------------
CAPITALIZED LEASE OBLIGATION, less current portion 946,776 934,858
-------------- --------------
COMMITMENTS & CONTINGENCIES
STOCKHOLDERS' DEFICIT
6% Senior Convertible Preferred Stock, no par value;
1,000,000 shares authorized; 1,000,000 shares
issued and outstanding as of March 31, 1996 861,543
Common Stock, no par value;
20,000,000 shares authorized; 896,609 and 649,164
shares issued and outstanding as of March 31, 1996
and June 30, 1995, respectively 2,696,833 2,162,033
Accumulated Deficit (6,029,590) (4,343,055)
-------------- --------------
Total Stockholders' Deficit (2,471,214) (2,181,022)
-------------- --------------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 3,009,735 $ 2,078,880
============== ==============
</TABLE>
See Notes to Financial Statements
4
<PAGE> 5
CHILDREN'S WONDERLAND, INC.
STATEMENTS OF OPERATIONS
THE THREE MONTHS AND NINE MONTHS
ENDED MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
<TABLE>
<CAPTION>
3 Months Ended March 31, 9 Months Ended March 31,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUE: $ 1,213,685 $ 1,018,934 $ 3,383,513 $ 2,429,585
-------------- -------------- -------------- --------------
OPERATING EXPENSE:
Payroll and Related Costs 733,101 621,009 2,283,954 1,549,288
Center Facilities Costs 270,199 180,475 806,702 558,476
General and Administrative 334,189 435,601 987,648 954,376
Development Costs 95,310 75,074 150,139 130,948
Other 116,827 67,424 307,566 172,048
Depreciation & Amortization 60,703 38,531 158,678 94,334
-------------- -------------- -------------- --------------
Total 1,610,329 1,418,114 4,694,687 3,459,471
-------------- -------------- -------------- --------------
OPERATING LOSS: 396,644 399,180 1,311,174 1,029,886
Interest 76,341 69,544 196,556 169,676
Other Non-Operating Costs 161,429 91,224 178,805 160,560
-------------- -------------- -------------- --------------
NET LOSS $ 634,414 $ 559,948 $ 1,686,535 $ 1,360,122
============== ============== ============== ==============
PRIMARY NET LOSS
PER SHARE (See Note 3) $ 0.71 $ 1.94
============== ==============
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES 896,609 869,115
============== ============== ==============
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
CHILDREN'S WONDERLAND, INC.
STATEMENTS OF CASH FLOWS
THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
<TABLE>
<CAPTION>
9 Months Ended March 31,
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ (1,240,979) $ (823,261)
CASH FLOWS FROM INVESTING ACTIVITIES: (323,599) (616,274)
CASH FLOWS FROM FINANCING ACTIVITIES: 1,553,796 1,452,214
-------------- --------------
NET (DECREASE) INCREASE IN CASH (10,782) 12,679
CASH, Beginning of period 65,072 1,540
-------------- --------------
CASH, End of period $ 54,290 $ 14,219
============== ==============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest: $ 91,063 $ 112,802
Cash paid during the period for taxes: -- --
</TABLE>
See Notes to Financial Statements
6
<PAGE> 7
CHILDREN'S WONDERLAND, INC.
NOTES TO FINANCIAL STATEMENTS
THE THREE MONTHS AND NINE MONTHS ENDED
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
NOTE 1 - SUBSEQUENT EVENT
Subsequent to March 31, 1996, the Company completed an initial public offering
of 2,012,500 Units at $4.00 per Unit. Each Unit consisted of one share of
common stock and one redeemable common stock purchase warrant, which entitles
the holder thereof to purchase one share of common stock for $5.00. The net
proceeds to the Company from the offering amounted to $6,852,200.
NOTE 2 - GENERAL INFORMATION
The interim financial data is unaudited; however, in the opinion of management,
the interim data includes all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation of the results for the interim
periods. The financial statements included herein have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principals have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures included herein
are adequate to make the information presented not misleading.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the Company's
financial statements
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed during the interim periods reported on are in
conformity with generally accepted accounting principles and are consistent
with those applied for annual periods. Operational comparisons between the
three and nine month periods of 1996 and 1995 are affected by the acquisition
of one center in December 1995 and the start up of a new center in March 1996
(see "Management's Discussion and Analysis of Plan of Operations" which
follows).
7
<PAGE> 8
CHILDREN'S WONDERLAND, INC.
NOTES TO FINANCIAL STATEMENTS
THE THREE MONTHS AND NINE MONTHS ENDED
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS PER SHARE
The weighted average shares used in the computation of net loss per share was
based upon the weighted average common shares; all common stock equivalents are
determined to be anti-dilutive. Pro forma net loss per common and common
equivalent share for the three months and the nine months ended March 31, 1996
has been determined by dividing net loss (adjusted for interest expense
associated with convertible notes payable) by the weighted average common
shares outstanding during the period and giving effect to the conversions of
the 6% senior convertible preferred stock and convertible notes payable which
were converted to common stock subsequent to March 31, 1996. Pro forma net
loss per share for the three months and the nine months ended March 31, 1996
was $0.39 and $1.08, respectively. Loss per share for the three months and the
nine months ended March 31, 1995 have not been presented as such information is
not indicative of the Company as an on-going entity.
For a complete discussion of the Company's accounting policies, refer to the
Company's Registration Statement on Form SB-2 for the year ended June 30, 1995,
previously filed.
8
<PAGE> 9
CHILDREN'S WONDERLAND, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATIONS
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
ITEM 2:
GENERAL OVERVIEW:
During the third quarter of fiscal year 1996, the Company opened one new
start-up center. The results of operations of the start-up center are included
in the Company's financial statements from the date of opening. Operating
expenses for the start-up center have been included in development costs, so as
to facilitate comparisons among periods on a same-center basis. Historically,
the Company's operating revenue has followed the seasonality of the school
year, declining in the summer months and the year-end holiday period.
RESULTS OF OPERATIONS:
The following table sets forth the percentage of center revenue represented in
the Company's statement of operations for the periods indicated:
<TABLE>
<CAPTION>
3 Months Ended March 31, 9 Months Ended March 31,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUE
100.0% 100.0% 100.0% 100.0%
-------------- -------------- -------------- --------------
OPERATING EXPENSE:
Payroll and Related Costs 60.4% 61.0% 67.5% 63.8%
Center Facilities Costs 22.2% 17.7% 23.8% 23.0%
General & Administrative 27.5% 42.8% 29.2% 39.3%
Development Costs 7.9% 7.4% 4.4% 5.4%
Other 9.6% 6.6% 9.1% 7.1%
Depreciation & Amortization 5.0% 3.8% 4.7% 3.9%
-------------- -------------- -------------- --------------
Total 132.6% 139.3% 138.8% 142.4%
-------------- -------------- -------------- --------------
OPERATING LOSS (32.6%) (39.2%) (38.8%) (42.3%)
Interest 6.3% 6.8% 5.8% 7.0%
Other Non-Operating Costs 13.3% 9.0% 5.3% 6.6%
-------------- -------------- -------------- --------------
NET LOSS (52.3%) (55.0%) (49.9%) (56.0%)
============== ============== ============== ==============
</TABLE>
9
<PAGE> 10
CHILDREN'S WONDERLAND, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATIONS
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1996 TO 1995
Revenues: Revenues increased by 19% to $1,213,685 for the third quarter of
fiscal year 1996, as compared to $1,018,934 for the third quarter of fiscal
year 1995. The increase is attributed to several factors, including an
increase in tuition rates of roughly 5% and an increase in center capacity due
to the addition of two centers subsequent to March 1995. At March 31, 1995,
the Company's state licensed, elder/child capacity for the ten centers then in
operation was 1,129 persons, as compared to twelve centers with a capacity of
1,394 persons at March 31, 1996. Of the two new centers, one was acquired from
a third party during the second quarter of fiscal year 1996, whereas the other
was the start up of a center directly by the Company.
Operating Expense - Payroll & Related Costs: Payroll expense related to
center operations increased by 18% to $733,101 for the third quarter of fiscal
year 1996, as compared to $621,009 for the comparable period for fiscal year
1995. State law for licensed day care facilities requires a specific ratio of
elders/children to teachers. Accordingly, center payroll expenses generally
fluctuate in relationship to the attendance levels at each center. Payroll
expense as a percent of revenues for the third quarter of fiscal year 1996
decreased as compared to the third quarter for the prior year due to increased
management emphasis on labor control.
Operating Expense - Center Facilities Costs: Center facilities expense
increased by 50% to $270,199 for the three months ended March 31, 1996, as
compared to $180,475 for the three months ended March 31, 1995. This expense
consists primarily of rent for the Company's centers. The noted increase is
due to the timing of center acquisitions; five centers in Colorado were
acquired in February 1995, an additional center was acquired in Denver,
Colorado in December 1995, and a new center in California commenced operations
in March 1996. Thus, the Company's six Colorado centers in operation as of
March 1996 did not exist for the entire third quarter of fiscal year 1995.
Operating Expense - General & Administrative: General corporate expenses
decreased by 23% to $334,189 for the three months ended March 31, 1996, as
compared to $435,601 for the three months ended March 31, 1995. Moreover,
general and administrative expenses as a percent of revenue decreased from
42.8% of revenue for the third quarter of fiscal year 1995 to 27.5% of revenue
for the third quarter of the current fiscal year. The decrease is due
primarily to decreased legal, accounting, and consulting fees in the third
quarter of fiscal year 1996.
Operating Expense - Development Costs: Development costs increased by 27% to
$95,310 for the three months ended March 31, 1996, as compared to $75,074 for
the comparable period in the prior fiscal year. This expense category includes
the costs related to personnel out in the field working with centers currently
under various stages of development, the cost of company-wide marketing
activities, and the costs associated with start-up centers. The Company
expects this expense category to increase in the future, as emphasis will be
placed on growth subsequent to the completion of the Company's initial public
offering of common stock.
10
<PAGE> 11
CHILDREN'S WONDERLAND, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATIONS
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
Operating Expense - Other: Other expense increased by 73% to $116,827 for the
third quarter of fiscal year 1996, as compared to $67,424 for the comparable
period in fiscal year 1995. The noted increase is due primarily to expansion in
corporate staffing facilities. In the second quarter of fiscal year 1996, the
Company established a National Training Center in Oxnard, California, as well
as a Field Operations office in order to accommodate an expanded sales &
development department as well as other corporate functions. In addition, this
expense category includes the cost of food for lunches and snacks served at the
centers, and as such, the expense increases as total enrollment increases.
Operating Expense - Depreciation & Amortization: Depreciation and amortization
increased by 58% to $60,703 for the three months ended March 31, 1996, as
compared to $38,531 for the three months ended March 31, 1995. The noted
increase is due to the timing of center acquisitions; five centers in Colorado
were acquired in February 1995, an additional center was acquired in Denver,
Colorado in December 1995, and a new center in California commenced operations
in March 1996. Thus, the Company's six Colorado centers in operation as of
March 1996 did not exist for the entire third quarter of fiscal year 1995.
Interest: Interest expense remained relatively consistent, increasing by 10%
to $76,341 for the three months ended March 31, 1996, as compared to $69,544
for the three months ended March 31, 1995. The slight fluctuation is due to
the timing of short term working capital financing.
Other Non-Operating Costs: Other costs increased by 77% to $161,429 for the
three months ended March 31, 1996, as compared to $91,224 for the comparable
period for fiscal year 1995. The Company paid out $134,000 to the Internal
Revenue Service during the third quarter of fiscal year 1996, which represents
the final payment on all penalties and interest assessed by the Internal
Revenue Service.
COMPARISON OF THE NINE MONTHS ENDED MARCH 31, 1996 TO 1995
Revenue: Revenue for existing centers increased by 39% to $3,383,513 for the
nine months ended March 31, 1996, as compared to $2,429,585 for the nine months
ended March 31, 1995. The increase is attributed to several factors, including
an increase in tuition rates of roughly 5% and an increase in center capacity
due to the addition of two centers subsequent to March 1995. At March 31, 1995,
the Company's state licensed, elder/child capacity for the ten centers then in
operation was 1,129 persons, as compared to twelve centers with a capacity of
1,394 persons at March 31, 1996. Of the two new centers, one was acquired from
a third party during the second quarter of fiscal year 1996, whereas the other
was the start up of a center directly by the Company.
11
<PAGE> 12
CHILDREN'S WONDERLAND, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATIONS
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
Operating Expense - Payroll & Related Costs: Payroll expense related to
center operations increased by 47% to $2,283,954 for the nine months ended
March 31, 1996, as compared to $1,549,288 for the comparable period for fiscal
year 1995. State law for licensed day care facilities requires a specific
ratio of elders/children to teachers. Accordingly, center payroll expenses
generally fluctuate in relationship to the attendance levels at each center.
Operating Expense - Center Facilities Costs: Center facilities expense
increased by 44% to $806,702 for the nine months ended March 31, 1996, as
compared to $558,476 for the nine months ended March 31, 1995. This expense
consists primarily of rent for the Company's centers. The noted increase is
due to the timing of center acquisitions; five centers in Colorado were
acquired in February 1995, an additional center was acquired in Denver,
Colorado in December 1995, and a new center in California commenced operations
in March 1996. Thus, the Company's six Colorado centers in operation as of
March 1996 did not exist for the entire third quarter of fiscal year 1995.
Operating Expense - General & Administrative: General corporate expenses
remained consistent, increasing by 4% to $987,648 for the nine months ended
March 31, 1996, as compared to $954,376 for the three months ended March 31,
1995. While the overall balance remained fairly consistent, the expense as a
percent of revenue decreased from 39.3% for the nine months ended March 31,
1995 to 29.2% for the nine months ended March 31, 1996. This decrease as a
percentage of revenue was due to the increased revenues for fiscal year 1996 as
compared to the prior fiscal year, while the Company was able to maintain the
general and administrative expenses at a constant level.
Operating Expense - Development Costs: Development costs increased by 15% to
$150,139 for the nine months ended March 31, 1996, as compared to $130,948 for
the comparable period in the prior fiscal year. This expense category includes
the costs related to personnel out in the field working with centers currently
under various stages of development, the cost of company-wide marketing
activities, and the costs associated with start-up centers. The Company
expects this expense category to increase in the future, as emphasis will be
placed on growth subsequent to the completion of the Company's initial public
offering of common stock.
Operating Expense - Other: Other expense increased by 79% to $307,566 for the
nine months ended March 31, 1996, as compared to $172,048 for the comparable
period in fiscal year 1995. The noted increase is due primarily to expansion
in corporate staffing facilities. In the second quarter of fiscal year 1996,
the Company established a National Training Center in Oxnard, California, as
well as a Field Operations office in order to accommodate an expanded sales &
development department as well as other corporate functions. In addition, this
expense category includes the cost of food for lunches and snacks served at the
centers, and as such, the expense increases as total enrollment increases.
12
<PAGE> 13
CHILDREN'S WONDERLAND, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATIONS
MARCH 31, 1996 AND 1995 (UNAUDITED)
________________________________________________________________________________
Operating Expense - Depreciation & Amortization: Depreciation and amortization
increased by 68% to $158,678 for the nine months ended March 31, 1996, as
compared to $94,334 for the nine months ended March 31, 1995. The noted
increase is due to the timing of center acquisitions; five centers in Colorado
were acquired in February 1995, an additional center was acquired in Denver,
Colorado in December 1995, and a new center in California commenced operations
in March 1996. Thus, the Company's six Colorado centers in operation as of
March 1996 did not exist for the entire third quarter of fiscal year 1995.
Interest: Interest expense increased by 16% to $196,556 for the nine months
ended March 31, 1996, as compared to $169,676 for the nine months ended March
31, 1995. The increase is due to increased borrowing activity during the
current fiscal year.
Other Non-Operating Expenses: Other non-operating expenses increased by 11%
to $178,805 for the nine months ended March 31, 1996, as compared to $160,560
for the comparable period for fiscal year 1995. The Company paid out $134,000
to the Internal Revenue Service during the third quarter of fiscal year 1996,
which represents the final payment on all penalties and interest assessed by
the Internal Revenue Service.
LIQUIDITY AND CAPITAL RESOURCES:
For the nine months ended March 31, 1996, the Company's operations resulted in
a net cash outflow of $1,240,979. Moreover, an additional $323,599 in cash was
used for investment purposes, primarily on fixed assets for new and existing
centers. To date, the Company has financed its operating cash needs primarily
from vendor credit, the sale of equity securities, loans from certain
stockholders, the private placement of promissory notes and convertible
promissory notes, the delivery of promissory notes to the sellers of certain
acquired centers, and cash generated from operations.
In May 1996, the Company successfully completed an initial public offering of
its common stock and common stock purchase warrants, which netted the Company
$6,852,200. The Company's management believes that the proceeds of this
initial public offering, along with cash internally generated from operations
and existing cash balances will allow it to continue to operate at planned
levels for the next twelve months.
13
<PAGE> 14
PART II
OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
None
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
CHILDREN'S WONDERLAND, INC.
(Registrant)
/s/ Robert M. Wilson June 19, 1996
- - -----------------------------------
Mr. Robert M. Wilson
President & Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CHILDREN'S
WONDERLAND, INC. FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 54,290
<SECURITIES> 0
<RECEIVABLES> 129,515
<ALLOWANCES> 24,567
<INVENTORY> 0
<CURRENT-ASSETS> 295,544
<PP&E> 648,920
<DEPRECIATION> 223,742
<TOTAL-ASSETS> 3,009,735
<CURRENT-LIABILITIES> 2,963,063
<BONDS> 3,525,840
0
861,543
<COMMON> 2,696,833
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,009,735
<SALES> 1,213,685
<TOTAL-REVENUES> 1,213,685
<CGS> 0
<TOTAL-COSTS> 1,610,329
<OTHER-EXPENSES> 161,429
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,341
<INCOME-PRETAX> (634,414)
<INCOME-TAX> 0
<INCOME-CONTINUING> (634,414)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (634,414)
<EPS-PRIMARY> (0.71)
<EPS-DILUTED> 0
</TABLE>
