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, 1999
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, 1999
Common Stock, $.001 par value 2,639,081
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets -- June 30, 1999
and December 31, 1998. . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations --
three and six months ended June 30, 1999
and 1998 . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders'
Equity (Deficit) . . . . . . . . . . . . . . . . . . . . 7
Consolidated Statements of Cash Flows --
three and six months ended June 30, 1999
and 1998 . . . . . . . . . . . . . . . . . . . . . . . . 8
Notes to Consolidated Financial Statements . . . . . . . 10
Item 2. Management's Discussion and Analysis and
Results of Operations. . . . . . . . . . . . . . . . . . 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 14
Item 2. Changes In Securities and Use of Proceeds. . . . . . . . 15
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of
Securities Holders . . . . . . . . . . . . . . . . . . . 15
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 17
PART I
Item 1. Financial Statements
The following unaudited Consolidated Financial Statements for
the period ended June 30, 1999 and December 31, 1998, have been
prepared by the Company.
TRANS ENERGY, INC.
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
TRANS ENERGY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
June 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
Cash $ - $ -
Accounts receivable 276,169 249,528
Prepaid and other current assets 1,508 1,508
Total Current Assets 277,677 251,036
PROPERTY AND EQUIPMENT
Vehicles 94,589 94,589
Machinery and equipment 10,092 10,092
Pipelines 2,254,908 2,254,908
Well equipment 254,092 253,429
Wells 7,336,448 7,337,682
Leasehold acreage 541,625 541,625
Accumulated depreciation (4,314,576) (1,777,079)
Total Fixed Assets 6,177,178 8,715,246
OTHER ASSETS
Prepaid closing costs - 675,443
Prepaid advertising 403,616 687,173
Related party receivables - 21,231
Loan acquisition costs 3,509 3,509
Total Other Assets 407,125 1,387,356
TOTAL ASSETS $ 6,861,980 $ 10,353,638
TRANS ENERGY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30, December 31,
1999 1998
(Unaudited)
CURRENT LIABILITIES
Cash overdraft $ 23,430 $ 5,013
Accounts payable - trade 1,015,753 1,029,461
Accrued expenses 564,543 566,469
Salaries payable 265,798 225,798
Notes payable 1,162,505 990,427
Debentures payable 4,936,896 4,246,744
Total Current Liabilities 7,968,925 7,063,912
NET LIABILITIES IN EXCESS OF THE ASSETS OF
DISCONTINUED OPERATIONS 104,911 104,911
LONG-TERM LIABILITIES
Notes payable 826,132 863,109
Total Long-Term Liabilities 826,132 863,109
Total Liabilities 8,899,968 8,031,932
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 30,000,000 shares authorized at
$0.001 par value; 2,639,081 and 2,174,817 shares
issued and outstanding, respectively 2,638 2,174
Capital in excess of par value 14,977,429 14,642,893
Accumulated deficit (17,018,055) (12,323,361)
Total Stockholders' Equity (Deficit) (2,037,988) 2,321,706
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 6,861,980 $ 10,353,638
TRANS ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
REVENUES
Oil and gas sales $ 561,927 $ 473,006 $ 295,067 $ 266,768
Total Revenues 561,927 473,006 295,067 266,768
COSTS AND EXPENSES
Cost of oil and gas 335,006 303,076 151,869 160,433
Salaries and wages 46,414 58,596 20,613 26,802
Depreciation and amortization 1,035,635 81,261 178,420 40,629
Selling, general and
administrative 356,705 412,097 127,900 271,480
Total Costs and Expenses 1,773,760 855,030 478,802 499,344
Net Income (Loss) from
Operations (1,211,833) (382,024) (183,735) (232,576)
OTHER INCOME (EXPENSE)
Loss on valuation of assets (2,442,961) - (2,442,961) -
Gain on sale of assets - 239,129 - 239,129
Interest income - 459 - 59
Interest expense (1,039,900) (139,774) (296,159) (74,449)
Total Other Income (Expense) (3,482,861) 99,814 (2,739,120) 164,739
NET LOSS BEFORE INCOME TAXES
AND MINORITY INTERESTS (4,694,694) (282,210) (2,922,855) (67,837)
INCOME TAXES - - - -
NET LOSS BEFORE MINORITY
INTERESTS (4,694,694) (282,210) (2,922,855) (67,837)
MINORITY INTERESTS - - - -
NET LOSS $ (4,694,694) $ (282,210) $ (2,922,855) $ (67,837)
BASIC LOSS PER SHARE $ (3.90) $ (0.64) $ (2.28) $ (0.56)
FULLY DILUTED LOSS PER SHARE $ (3.90) $ (0.64) $ (2.28) $ (0.56)
TRANS ENERGY, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity (Deficit)
Capital in
Common Shares Excess of Accumulated
Shares Amount Par Value Deficit
Balance, December 31, 1997 1,415,808 $ 1,415 $ 10,751,227 $ (8,740,161)
Contribution of capital by
shareholders - - 208,210 -
Common stock issued for services
at $1.45 per share 248,812 249 360,501 -
Common stock issued for debt
conversion at $1.65 per share 36,364 36 59,964 -
Common stock issued for prepaid
closing fees at $3.27 per share 473,833 474 1,548,427 -
Contributed capital from discount on
debentures - - 1,714,564 -
Net loss for the year ended
December 31, 1998 - - - (3,583,200)
Balance, December 31, 1998 2,174,817 2,174 14,642,893 (12,323,361)
Common stock issued for services
at $1.00 per share (unaudited) 200,000 200 199,800 -
Common stock issued for debt
conversion at $0.75 per share
(unaudited) 90,000 90 67,410 -
common stock issued for conversion
of debentures at $0.39 per share
(unaudited) 174,264 174 67,326 -
Net loss for the six months
ended June 30, 1999 (unaudited) - - - (4,694,694)
Balance, June 30, 1999 (unaudited) 2,639,081 $ 2,638 $ 14,977,429 $(17,018,055)
TRANS ENERGY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,694,694) $ (282,210) $(2,922,855) $ (67,837)
Adjustments to reconcile net
loss to cash provided by
operating activities:
Depreciation, depletion
and amortization 1,625,057 81,261 178,420 40,629
Common stock issued
for services 200,000 1,548,500 - 1,548,500
Loss on valuation of assets 2,442,961 - 2,442,961 -
Changes in operating assets
and liabilities:
Decrease (increase) in
accounts receivable (5,410) 10,473 (31,747) (23,313)
Decrease (increase) in prepaid
expenses - (1,061,695) - (1,061,695)
Decrease (increase) in loan
acquisition costs - (2,702,165) - (2,702,165)
Increase (decrease) in
accounts payable and
accrued expenses 43,681 666,354 (86,654) 230,294
Increase (decrease) in
interest payable 186,131 - 186,131 -
Cash Provided (Used) by
Operating Activities (202,274) (1,739,482) (233,744) (2,035,587)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property - (259,129) - (259,129)
Expenditures for property
and equipment (327) (3,202,689) - (2,281,280)
Cash Provided (Used) by
Investing Activities (327) (3,461,818) - (2,540,409)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued for cash - 310,750 - 310,750
Proceeds from debentures - 4,625,400 - 4,096,525
Borrowings of long-term debt 245,090 259,208 245,090 259,208
Repayment to related parties - - - -
Principal payments on
long-term debt (42,489) (179,939) (11,346) (90,487)
Cash Provided (Used) by
Investing Activities 202,601 5,015,419 233,744 4,575,996
NET INCREASE (DECREASE) IN CASH - (185,881) - -
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD - 185,881 - -
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ - $ - $ - $ -
TRANS ENERGY, INC.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Six Months For the Three Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
CASH PAID FOR:
Interest $ 64,985 $ 139,774 $ 8,547 $ 74,449
Income taxes $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for
services $ 200,000 $ 1,548,500 $ - $1,548,500
Conversion of debt to
equity $ 135,000 $ - $ 67,500 $ -
Common stock issued for
well costs $ - $ 50,000 $ - $ -
TRANS ENERGY, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
June 30, 1999 and December 31, 1998
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, 1999 and for all periods presented have been made.
Certain information and footnote disclosures normally
included in consolidated financial statements prepared in
accordance with generally 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, 1998 audited
consolidated financial statements. The results of
operations for the periods ended June 30, 1999 and 1998 are
not necessarily indicative of the operating results for the
full years.
NOTE 2 - LOSS ON VALUATION OF ASSETS
On July 2, 1999, the Company sold assets with a depreciated
basis of $2,842,961 for $400,000. The loss on valuation of
assets of $2,442,961 has been recorded to reflect the value
of these assets per the sales transaction.
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 and six month
periods ended June 30, 1999 and 1998. 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,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Total revenues . . . . . . . . . . 100% 100% 100% 100%
Total costs and expenses . . . . . 162 187 316 181
Net income (loss form
operations. . . . . . . . . . . . (62) (87) 216 (81)
Other income (expense) . . . . . . (929) 62 (620) 21
Net income (loss). . . . . . . . . (991) (25) (836) (60)
Total revenues for the three months ("second quarter") and six
months ("first half") ended June 30, 1999 increased 11% and 19%,
respectively, when compared with the three and six months ended
June 30, 1998. This increase is primarily attributed to the
purchase of the Gulf Canada well interests located in Powder River
Basin of Wyoming. Total costs and expenses as a percentage of
total revenues decreased from 187% in the second quarter of 1998 to
162% for the second quarter of 1999, and actual costs and expenses
decreased 4% during the same period. This decrease is attributed
to the 5% decrease in cost of oil and gas due to the stable nature
of the Company's marketing arrangements and reallocation of certain
costs, and the 53% decrease in selling, general and administrative
expenses due to more efficient expense control related to increased
production. The increase was partially offset by the 339% increase
in depreciation and amortization expenses due to the acquisition of
the Gulf Canada well interests. As a percentage of total revenues,
total costs and expenses increased from 181% in the first half of
1998 to 316% for the first half of 1999. Actual costs and expenses
increased 107% in the first half of 1999, primarily due to the
$954,374 increase in depreciation and amortization expenses and
partially offset by the 13% decrease in selling, general and
administrative expenses.
The Company's net loss for the second quarter and first half
of 1999 was $2,922,855 and $4,694,696, respectively, compared to a
net loss of $67,837 and $282,210 for the 1998 periods. This
increase in the Company's net loss is attributed primarily to the
Company's loss of $2,442,961 on the sale of assets in the second
quarter and the increase in depreciation and amortization.
For the remainder of fiscal year 1999, management expects
selling, general and administrative expenses to remain at
approximately the same rate as for the first half of 1999. The
cost of oil and gas produced is expected to fluctuate with the
amount produced and with prices of oil and gas, and management
anticipates that revenues are likely to increase during the
remainder of 1999.
Net Operating Losses
The Company has accumulated approximately $12,320,000 of net
operating loss carryforwards as of December 31, 1998, which may be
offset against future taxable income through the year 2014 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 year ended
December 31, 1998 or three month period ended June 30, 1999 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, 1999 was a negative $7,691,248 compared
to a negative $6,812,876 at December 31, 1998. This 13% change is
primarily attributed to the 17% increase in accounts payable and
16% in Debentures payable.
The Company anticipates meeting its working capital needs
during the remainder of the current fiscal year with revenues from
operations, particularly from its newly acquired Gulf Canada
interests in Wyoming. In the event revenues are not sufficient to
meet the Company's working capital needs, it will explore the
possibility of additional funding from either the sale of debt or
equity securities. The Company has no current agreements or
arrangements for additional funding and there can be no assurance
such funding will be available to the Company or, if available, it
will be on acceptable or favorable terms to the Company.
As of June 30, 1999, the Company had total assets of
$6,861,980 and total stockholders' deficit of $2,037,988, compared
to total assets of $10,353,638 and total stockholders' equity of
$2,321,706 at December 31, 1998. This decrease in assets and
stockholders' equity is attributed to the $2,537,497 increase in
accumulated depreciation due to the valuation of wells sold,
including a loss on valuation of assets of $2,442,961.
At June 30, 1999, the Company had debentures payable of
$4,936,896, which represents certain convertible debentures that
matured during the first quarter of 1999. The Company currently
anticipates that either the debentures will be converted into
common stock or the Company will attempt to negotiate an extension
to the maturity date.
On July 2, 1999, the Company sold assets with a depreciated
basis of $2,842,961 for $400,000. The loss on valuation of assets
of $2,442,961 has been recorded to reflect the value of these
assets per the sales transaction. The Company has applied the
proceeds from the sale to general operating expenses.
Inflation
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Year 2000
Year 2000 issues may arise if computer programs have been
written using two digits (rather than four) to define the
applicable year. In such case, programs that have time-sensitive
logic may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations or system
failures.
The Company has completed its assessment of the Year 2000
issue and believes that any costs of addressing the issue will not
have a material adverse impact on the Company's financial position.
The Company believes that its existing accounting computer systems
and software will not need to be upgraded to mitigate the Year 2000
issues. The Company has not incurred any costs associated with its
assessment of the Year 2000 problem. In the event that Year 2000
issues impact the Company's accounting operations and other
operations aided by its computer system, the Company believes, as
part of a contingency plan, that it has adequate personnel to
perform those functions manually until such time that any Year 2000
issues are resolved.
The Company believes that third parties with whom it has
material relationships will not materially be affected by the Year
2000 issues as those third parties are relatively small entities
which do not rely heavily on information technology ("IT") systems
and non-IT systems for their operations. However, if the Company
and third parties upon which it relies are unable to address any
Year 2000 issues in a timely manner, it could result in a material
financial risk to the Company, including loss of revenue and
substantial unanticipated costs. Accordingly, the Company plans to
devote all resources required to resolve any significant Year 2000
issues in a timely manner.
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
secure additional financing, the possibility of success in the
Company's drilling endeavors, competitive factors, 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 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. Walker's employment with
Vulcan Energy Corporation, and seeks punitive and exemplary
damages. The Company denies all allegations and intends to
vigorously defend its position. Management believes that the
results of the proceedings will not have a material adverse effect
on the Company. On February 17, 1998 the Company and the above
named defendants filed a countersuit against F. Worthy Walker
alleging breach of contract, fraud and fraudulent inducement,
conversion, and breach of fiduciary duty and seeks punitive
damages.
The Company is also defending a lawsuit filed in 1998 in the
189th Judicial District Court of Harris County, Texas entitled
Baker Hughes Oilfield Operation, Inc. d/b/a Baker Hughes Inteq. vs.
Loren E. Bagley, Individually and Doing Business as Trans Energy,
Inc. (#98-48248). This action is premised on an alleged breach of
contract and fraud and seeks to recover monetary damages in the
amount of $41,142, plus attorneys' fees, exemplary damages, costs
and interest. The Company denies all allegations and intends to
vigorously defend its position. Presently, the action is in the
early discovery phase.
Also in 1998 an action was filed against the Company in the
234th Judicial District Court of Harris County, Texas entitled
Western Geophysical, a Division of Western Atlas international,
Inc. vs. Trans Energy, Inc. and Loren F. Bagley, Individually and
Doing Business as Trans Energy, Inc. (#98-58146). In this action
the plaintiff alleges breach of contract and fraud and seeds to
recover monetary damages of $435,714, plus attorney's fees,
exemplary damages, costs of the suit and interest. The Company is
presently attempting to negotiate a settlement in the matter.
A foreign judgment has been filed with the circuit court in
Pleasants County, West Virginia for a judgment rendered by the
District Court in Harris County, Texas. The judgment is for
$41,142 plus prejudgment interest and attorney's fees of $13,500.
No action has been taken to collect on this judgment.
Item 2. Changes In Securities and Use of Proceeds
During the first half of 1999, the Company issued 250,000
shares of common stock to five persons for services rendered to the
Company valued at $1.00 per share, 90,000 shares to two persons in
exchange for the conversion of debt at $.75 per share, and 174,264
shares to three persons upon the conversion of certain debentures.
The above issuances of shares were made in private
transactions to persons possessing knowledge of the Company and
its business operations. Accordingly, the Company relied upon the
exemption from registration under the Securities Act of 1933, as
amended (the "Act"), provided by Section 4(2) of the Act.
Item 3. Defaults Upon Senior Securities
In 1998, the Company issued $4,625,400 face value of 8%
Secured Convertible Debentures due March 31, 1999 (the
"Debentures") Interest is to accrue upon the date of issuance
until payment in full of the principal sum has been made or duly
provided for. Holders of the Debentures shall have the option, at
any time, until maturity, to convert the principal amount of their
Debenture, or any portion of the principal amount which is at least
$10,000 into shares of the Company's Common Stock at a conversion
price for each share equal to the lower of (a) seventy percent
(70%) of the market price of the Company's Common Stock averaged
over the five trading days prior to the date of conversion, or (b)
the market price on the issuance date of the Debentures. Any
accrued and unpaid interest shall be payable, at the option of the
Company, in cash or in shares of the Company's Common Stock valued
at the then effective conversion price.
The Company has not repaid the Debentures and has not
finalized a registration statement under which the Debentures can
be converted into common stock. The Company is attempting to
renegotiate the terms of the debenture or to extend their terms.
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
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
During the three month period ended June 30, 1999, the Company
did not file any reports on Form 8-K.
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 23, 1999 By /S/ Loren E. Bagley
LOREN E. BAGLEY, President
and Chief Executive Officer
Date: August 23, 1999 By /S/ William F. Woodburn
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, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 276,169
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 277,677
<PP&E> 10,491,754
<DEPRECIATION> 4,314,576
<TOTAL-ASSETS> 6,861,980
<CURRENT-LIABILITIES> 7,968,925
<BONDS> 826,132
0
0
<COMMON> 2,638
<OTHER-SE> 14,977,429
<TOTAL-LIABILITY-AND-EQUITY> 6,861,980
<SALES> 561,927
<TOTAL-REVENUES> 561,927
<CGS> 335,006
<TOTAL-COSTS> 1,773,760
<OTHER-EXPENSES> 2,442,961
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,039,900
<INCOME-PRETAX> (4,694,694)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,694,694)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,694,694)
<EPS-BASIC> (3.90)
<EPS-DILUTED> (3.90)
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