UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1997
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 0-23530
TRANS ENERGY, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 93-0997412
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
210 Second Street, P.O. Box 393, St. Marys, West Virginia 26170
(Address of principal executive offices)
Registrant's telephone no., including area code: (304) 684-7053
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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.
Class Outstanding as of June 30, 1997
Common Stock, $.001 par value 4,379,883
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . 1
Consolidated Balance Sheets -- June 30,
1997 and December 31, 1996 . . . . . . . . . 2
Consolidated Statements of Operations -- three
and six months ended June 30, 1997 and 1996. 4
Consolidated Statements of Stockholders'
Equity . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows --
three and six months ended June 30, 1997
and 1996 . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . 9
Item 2. Management's Discussion and Analysis and
Results of Operations. . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . 12
Item 2. Changes In Securities. . . . . . . . . . . . . 13
Item 3. Defaults Upon Senior Securities. . . . . . . . 13
Item 4. Submission of Matters to a Vote of
Securities Holders . . . . . . . . . . . . . . 13
Item 5. Other Information. . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . 15
-i-
<PAGE>
PART I
Item 1. Financial Statements
The following unaudited Consolidated Financial Statements for
the period ended June 30, 1997 and December 31, 1996, have been
prepared by the Company.
TRANS ENERGY, INC.
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1997 and December 31, 1996
<PAGE>
TRANS ENERGY, INC.
Consolidated Balance Sheets
ASSETS
June 30, December 31,
1997 1996
(Unaudited)
CURRENT ASSETS
Cash $ 483,449 $ 481,846
Accounts receivable 174,520 235,757
Prepaid expenses - 59,601
Total Current Assets 657,969 777,204
PROPERTY AND EQUIPMENT
Office equipment 318 -
Vehicles 103,354 44,552
Machinery and equipment 62,206 62,206
Pipeline 2,192,001 2,192,001
Well equipment 374,972 358,471
Wells 3,887,371 3,177,416
Leasehold acreage 263,500 263,500
Accumulated depreciation (1,420,272) (1,381,129)
Total Fixed Assets 5,463,450 4,717,017
OTHER ASSETS
Loan acquisition costs 98,973 6,122
Total Other Assets 98,973 6,122
TOTAL ASSETS $6,220,392 $5,500,343
<PAGE>
TRANS ENERGY, INC.
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1997 1996
(Unaudited)
CURRENT LIABILITIES
Accounts payable - trade $ 957,158 $ 685,711
Accrued expenses 244,666 29,385
Notes payable - current portion 657,927 645,348
Total Current Liabilities 1,859,751 1,360,444
NET LIABILITIES IN EXCESS OF ASSETS OF
DISCONTINUED OPERATIONS 602,074 668,717
LONG-TERM LIABILITIES
Convertible debt (Note 2) 930,000 -
Advances from related parties 194,649 605,190
Notes payable 646,246 646,246
Total Long-Term Liabilities 1,770,895 1,251,436
Total Liabilities 4,232,720 3,280,597
COMMITMENTS AND CONTINGENCIES - -
MINORITY INTERESTS - -
STOCKHOLDERS' EQUITY
Common Stock: 30,000,000 shares
authorized at $0.001 par value;
4,379,883 and 3,824,043 shares
issued and outstanding, respectively 4,380 3,824
Capital in excess of par value 9,597,952 8,926,633
Accumulated deficit (7,614,660) (6,710,711)
Total Stockholders' Equity 1,987,672 2,219,746
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,220,392 $ 5,500,343
<PAGE>
TRANS ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
REVENUES
Oil and gas sales $ 543,550 $ 627,118 $ 272,834 $ 348,098
Total Revenues 543,550 627,118 272,834 348,098
COSTS AND EXPENSES
Cost of oil and gas 248,265 401,899 157,095 227,270
Salaries and wages 130,386 56,747 99,635 28,371
Depreciation and amortization 176,352 74,286 142,788 39,618
Selling, general and
administrative 621,484 195,855 519,933 116,866
Total Costs and Expenses 1,176,487 728,787 919,451 412,125
Net Income (Loss) from
Operations (632,937) (101,669) (646,617) (64,027)
OTHER INCOME (EXPENSE)
Bad debt expense (100,000) - (100,000) -
Interest income 10,155 - 8,510 -
Interest expense (181,167 (407,878) (144,852) (252,654)
Total Other Income (Expense)(271,012) (407,878) (236,342) (252,654)
NET INCOME (LOSS) BEFORE INCOME
TAXES AND AND MINORITY INTERESTS
AND EXTRAORDINARY
INCOME (LOSS) (903,949) (509,547) (882,959) (316,681)
INCOME TAXES - - - -
NET INCOME (LOSS) BEFORE MINORITY
INTERESTS AND EXTRAORDINARY
INCOME (LOSS) (903,949) (509,547) (882,959) (316,681)
MINORITY INTERESTS - 15,960 - -
NET INCOME (LOSS) BEFORE
EXTRAORDINARY INCOME (LOSS)
AND DISCONTINUED OPERATIONS (903,949) (493,587) (882,959) (316,681)
LOSS FROM DISCONTINUED
OPERATIONS - (164,450) - 31,161
NET INCOME (LOSS) BEFORE EXTRA-
ORDINARY INCOME (LOSS) $ (903,949) $ (658,037) $(882,959) $ (285,520)
<PAGE>
TRANS ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
EXTRAORDINARY INCOME (LOSS)
Forgiveness of debt $ - $20,000 $ - $ -
Early payoff of debt - (10,444) - -
TOTAL EXTRAORDINARY
INCOME (LOSS) - 9,556 - $ -
NET INCOME (LOSS) $ (903,949) $ (648,481) $ (882,959) $(285,520)
PRIMARY EARNINGS (LOSS)
PER SHARE
NET INCOME (LOSS) BEFORE
EXTRAORDINARY INCOME $ (0.22) $ (0.20) $ (0.21) $ (0.09)
EXTRAORDINARY INCOME - NIL - NIL
NET INCOME (LOSS) $ (0.22) $ (0.20) $ (0.21) $ (0.09)
FULLY DILUTED EARNINGS
(LOSS) PER SHARE
NET INCOME (LOSS) BEFORE
EXTRAORDINARY INCOME $ (0.22) $ (0.20) $ (0.22) $ (0.09)
EXTRAORDINARY INCOME - NIL - NIL
NET INCOME (LOSS) $ (0.22) $ (0.20) $ (0.22) $ (0.09)
<PAGE>
TRANS ENERGY, INC.
Consolidated Statements of Stockholders' Equity
Capital in
Common Shares Excess of Accumulated
Shares Amount Par Value Deficit
Balance, December 31, 1995 3,174,122 $ 3,174 $ 5,629,734 $ (3,071,721)
Common stock issued for
debenture at $0.90 per share 55,555 56 49,944 -
Common stock issued for
services at $2.67 per share 9,000 9 23,991 -
Common stock warrants issued - - 774,000 -
Cancellation of common stock
options issued services - - (275,000) -
Shareholder loans contributed
to capital - - 250,000 -
Issuance of common stock for
cash at $5.36 per share 585,366 585 3,137,415 -
Common stock offering costs - - (663,451) -
Net loss for the year ended
December 31, 1996 - - - (3,638,990)
Balance, December 31, 1996 3,824,043 3,824 8,926,633 (6,710,711)
Issuance of common stock for
services at $2.75 per share
(unaudited) 25,000 25 68,725 -
Issuance of common stock for
services at $1.38 per share
(unaudited) 75,000 75 103,050 -
Conversion of debenture to common
stock at $1.10 per share
(unaudited) 455,840 456 499,544 -
Net loss for the six months
ended June 30, 1997 (Unaudited) - - - (903,949)
Balance, June 30, 1997
(Unaudited) 4,379,883 $ 4,380 $9,597,952 $ (7,614,660)
<PAGE>
TRANS ENERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (903,949) $ (648,481) $ (882,959) $ (285,520)
Adjustments to Reconcile Net
Income to Cash Provided by
Operating Activities:
Depreciation, depletion and
amortization 176,352 306,364 142,788 142,416
Minority interest - (39,355) - (23,395)
Common stock issued for
services 171,875 24,000 171,875 -
Changes in Operating Assets and Liabilities:
Decrease (increase) in
accounts receivable 61,237 (13,001) (16,676) 78,046
Decrease (increase) in
inventory - (314,559) - (289,754)
Decrease (increase) in prepared
expenses 59,601 (136) 59,601 -
Decrease (increase) in loan
acquisition costs - 174,087 - 193,500
Increase (decrease) in accounts
payable and accrued expenses 495,882 177,384 598,883 (2,069)
Increase (decrease) in interest
payable (9,154) (22,821) - (9,464)
Cash Provided (Used) by
Operating Activities 51,844 (356,518) 73,512 (196,240)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and
equipment (798,336) (38,339) (727,816) (15,607)
Cash Provided (Used) by
Investing Activities $ (798,336) $ (38,339) $(727,816) $ (15,607)
<PAGE>
TRANS ENERGY, INC.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of stock offering costs $ - $ (39,500) $ - $ (39,500)
Borrowings of long-term debt 1,312,700 551,310 100,000 213,931
Repayment to related parties (410,541) 14,872 (101,962) 15,310
Borrowings from related parties - 88,315 - 49,900
Principal payments on long-term
debt (154,064) (201,105) (47,323) (46,780)
Cash Provided (Used) by
Financing Activities 748,095 413,892 (49,285) 192,861
NET INCREASE (DECREASE) IN CASH 1,603 19,035 (703,589) (18,986)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 481,846 - 1,187,038 38,021
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 483,449 $ 19,035 $ 483,449 $ 19,035
CASH PAID FOR:
Interest $ 181,167 $ 168,356 $ 144,852 $ 92,639
Income taxes $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for
services $ 171,875 $ 24,000 $ 171,875 $ -
Conversion of debentures to
equity $ 500,000 $ 50,000 $ 500,000 $ -
Warrants issued for loan
acquisition costs $ - $ 774,000 $ - $ -
<PAGE>
TRANS ENERGY, INC.
Notes to the Consolidated Financial Statements
June 30, 1997 and December 31, 1996
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1997 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with general
accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1996 audited consolidated
financial statements. The results of operations for the periods
ended June 30, 1997 and 1996 are not necessarily indicative of the
operating results for the full year.
NOTE 2 - CONVERTIBLE DEBENTURES
In March 1997, the Company completed an offering of $1,430,000 of
convertible debentures. The Company received net proceeds of
$1,212,700 after the costs of the offering. The costs of the
offering will be amortized over the life of the loan. The
convertible debentures bear interest at 8% per annum, payable on a
prorata basis at the earlier of the conversion date or the maturity
date (March 25, 2000). The convertible debentures are convertible
to common stock at the lesser of 80% of the 5 day average daily
closing bid price for the 5 trading days immediately preceding the
closing date or 75% of the 5 day average daily closing bid price for
the 5 trading days immediately preceding the applicable conversion
date. The debentures are subject to a mandatory 36 months conversion
feature at the end of which all debentures outstanding will be
automatically converted upon the terms above.
During the three months ended June 30, 1997, $500,000 of the
convertible debentures were converted to 455,840 shares of common
stock. Accordingly, the related loan fees were expensed in the
period then ended.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following table sets forth the percentage relationship to
total revenues of principal items contained in the Company's
Consolidated Statements of Operations for the three month and six
month periods ended June 30, 1997 and 1996. It should be noted
that percentages discussed throughout this analysis are stated on
an approximate basis.
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
(Unaudited) (Unaudited)
Total revenues . . . . . 100% 100% 100% 100%
Total costs and expenses . 337 118 216 116
Other income (expense) . (87) (73) (50) (65)
Net (loss) before income
taxes, minority interest
and extraordinary income
(loss) . . . . . . . . (324) (91) (166) (81)
Income taxes . . . . . . - - - -
Minority interest. . . . - - - 3
Net (loss) before
extraordinary income
(loss) and discontinued
operations . . . . . . (324) (91) (166) (79)
Loss from discontinued
operations . . . . . . - 9 - (26)
Extraordinary income . . - - - 2
Net income (loss). . . . (324) (82) (166) (103)
Results of Operations
Total Revenues for the three month period ended June 30, 1997
("second quarter of 1997") and the six month period ended June 30,
1997 ("first half of 1997) decreased 21% and 13%, respectively,
when compared to the corresponding 1996 periods. This decrease is
attributed to the Company's continuing decision not to purchase gas
from its suppliers at a price higher than management believed it
could profitably resell the gas, and was partially offset by higher
prices and higher volumes of oil and gas produced from Company
owned wells. Total costs and expenses as a percentage of total
revenues increased from 118% in the second quarter of 1996 to 337%
for the second quarter of 1997, and from 116% for the first half of
1996 to 216% for the first half of 1997. Total costs and expenses
for the second quarter of 1997 increased 123% compared to the
corresponding 1996 period and increased 61% for the first half of
1997, compared to the 1996 period. This increase is primarily
attributed to the 217% increase in selling, general and
administrative costs which was partially offset by a 39% decrease
in the cost of oil and gas due to the Company's decision not to
purchase higher priced gas from its suppliers. Salaries and wages
increased 251% to $99,635 for the second quarter of 1997 and
increased 130% for the first half of 1997, compared to the
corresponding 1996 periods. Depreciation and depletion increased
260% in the second quarter of 1997 and increased 137% for the first
half of 1997 compared to the same periods in 1996. Selling, general
and administrative expenses increased 345% to $519,933 in the
second quarter of 1997 and increased 217% for the first six half of
1997 compared to the same periods in 1996. Interest expense
decreased 43% to $144,852 for the second quarter of 1997 and
decreased 56% for the first half of 1997 due to decreased
borrowings and the 1996 issuance of additional shares of common
stock to debenture holders in consideration for extending the due
date of the debentures.
The Company's minority interests of $0 for the second quarter
of 1997 was unchanged form the second quarter of 1996. The
Company's net loss was $882,959 for the second quarter of 1997 and
$903,949 for the first half of 1997 compared to losses of $285,520
and $648,481 for the respective periods in 1996. The Company's
larger net loss in the second quarter of 1997 when compared to the
same period in 1996, is attributed to the $403,067 (345%) increase
in Selling, General and Administrative costs due to the Company
issuing stock for services rendered to the Company, a $71,264
increase in salaries and wages, and a $100,000 uncollectible loan
provision.
For the remainder of fiscal year 1997, management expects
salaries and wages to increase and other general and administrative
expenses to remain at approximately the same rate as for the second
quarter of 1997. The cost of oil and gas produced is expected to
fluctuate with the amount produced and with prices of oil and gas
generally, and management anticipates that revenues are likely to
increase during the remainder of 1997.
Net Operating Losses
The Company has accumulated approximately $7,614,660 of net
operating loss carryforwards as of June 30, 1997, which may be
offset against future taxable income through the year 2011 when the
carryforwards expire. The use of these losses to reduce future
income taxes will depend on the generation of sufficient taxable
income prior to the expiration of the net operating loss
carryforwards. In the event of certain changes in control of the
Company, there will be an annual limitation on the amount of net
operating loss carryforwards which can be used. No tax benefit has
been reported in the financial statements for the period ended June
30, 1997 because the potential tax benefits of the loss
carryforward is offset by valuation allowance of the same amount.
Liquidity and Capital Resources
Historically, the Company's working capital needs have been
satisfied through its operating revenues and from borrowed funds.
Working capital at June 30, 1997 of a negative $1,201,782 decreased
from a negative $583,240 at December 31, 1996. This change is
primarily attributed to the increase in accounts payable from
$685,711 at December 31, 1996 to $957,158 at June 30, 1997, and the
increase in accrued expenses from $29,385 at December 31, 1996 to
$244,666 at June 30, 1997. The Company anticipates meeting its
working capital needs during the remainder of the current fiscal
year with revenues from operations.
As of June 30, 1997, the Company had total assets of
$6,220,392 and total stockholders equity of $1,987,672 compared to
total assets of $5,500,343 and total stockholders equity of
$2,219,746 at December 31, 1996. This represents a $720,049 (13%)
increase in total assets and a $232,074 (10%) decrease in total
stockholders equity for the period. For this same period, cash
increased from $481,846 to $483,449 and total current assets
decreased 15% due to the decrease in accounts receivable. Total
current liabilities increased 37% primarily attributed to an
increase in the Company's accounts payable and accrued expenses.
At June 30, 1997, the Company's current portion of its long
term debt was $657,927. In 1996, certain outstanding convertible
debentures having a face value of $50,000 plus accrued interest
were convened into common stock. In 1997, convertible debentures
with a face value of $500,000 were converted into common stock.
The Company currently anticipates that it will be able to provide
for its debt obligations and repayments coming due during the
remainder of 1997 from operating revenues generated by the Company.
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company wishes to advise readers that
actual results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company to
provide for its debt obligations and to provide for working capital
needs from operating revenues, and other risks detailed in the
Company's periodic report filings with the Securities and Exchange
Commission.
PART II
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject
except as set forth below.
On December 30, 1996, a complaint entitled R&K Oil Company,
Inc. vs. Trans Energy, Inc. was filed in the United States District
Court, Western District of Texas, Midland/Odessa Division
(# MO96CA197). The complaint alleges that the Company owes R&K Oil
Company, Inc. $131,978 as a result of business transacted by the
Company's subsidiary, Vulcan Energy Corporation. The complaint was
dismissed June 3, 1997.
On March 12, 1997, a complaint entitled F. Worthy Walker vs.
Loren Bagley, William Woodburn, Mark Woodburn, Trans Energy, Inc.
and Vulcan Energy Corporation, was filed in the District Court of
Dallas, Texas (# 9702304C). The complaint alleges that the Company
breached certain contracts related to Mr. Walkers employment with
Vulcan Energy Corporation, and seeks punitive and exemplary
damages. The Company denies all allegations. Management believes
that the results of the proceedings will not have a material
adverse effect on the Company.
On May 14, 1997, a complaint entitled R&K Oil Company, Inc.
vs. Vulcan Energy Corporation and Trans Energy, Inc. was filed in
District Court, Andrews County, Texas, 109th Judicial District
(File #14,430). The complaint alleges that the Company owes R&K
Oil Company, Inc. $126,978 as a result of business transacted by
the Company's subsidiary, Vulcan Energy Corporation. The complaint
also seeks $500,000 for breach of contract. The Company denies all
allegations and management believes that the results of the
proceedings will not have a materially adverse affect on the
Company.
Item 2. Changes In Securities
During the second quarter of 1997, the Company issued 25,000
shares of its common stock valued at $2.75 per share and 75,000
shares valued at $1.38 per shares to individuals for services
rendered to the Company. Also during the second quarter of 1997,
$500,000 of the Company's 8% convertible debentures issued in March
1997 were converted into 455,840 shares of common stock. The
issuances of shares for services was made in private transactions
with individuals and was made in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of
1933, as amended (the "Act"). The issuance of shares pursuant to
the conversion of the convertible debentures was made in reliance
on the exemption from registration provided by Section 3(a)(9) and
Regulation S of the Act.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company.
Item 5. Other Information
This Item is not applicable to the Company.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
On April 16, 1997, the Company filed a report on Form 8-K
disclosing the sale during the period ended March 31, 1997 of
8% Cumulative Convertible Debentures due March 25, 2000,
convertible into shares of the Company's common stock, in reliance
upon the exemption from registration provided by Rules 901 through
904, inclusive ("Regulation S"), under the Securities Act of 1933,
as amended.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TRANS ENERGY, INC.
Date: August 26, 1997 By Loren E. Bagley
(Signature)
LOREN E. BAGLEY, President
and Chief Executive Officer
(Chief Financial Officer)
Date: August 26, 1997 By William F. Woodburn
(Signature)
William F. Woodburn, Vice
President and Director
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE TRANS ENERGY, INC. FINANCIAL
STATEMENTS FOR THE PERIOD ENDED June 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 657,969
<SECURITIES> 0
<RECEIVABLES> 174,520
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 657,969
<PP&E> 6,883,722
<DEPRECIATION> 1,420,272
<TOTAL-ASSETS> 6,220,392
<CURRENT-LIABILITIES> 1,859,751
<BONDS> 1,770,895
0
0
<COMMON> 4,380
<OTHER-SE> 9,597,952
<TOTAL-LIABILITY-AND-EQUITY> 6,220,392
<SALES> 543,550
<TOTAL-REVENUES> 543,550
<CGS> 248,265
<TOTAL-COSTS> 1,176,487
<OTHER-EXPENSES> 100,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 181,167
<INCOME-PRETAX> (903,949)
<INCOME-TAX> 0
<INCOME-CONTINUING> (903,949)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (903,949)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
</TABLE>
