<PAGE>
UNITED STATES
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: SEPTEMBER 30, 1997
------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to _____________
Commission file number: 0-023532
--------
AMERICAN DIVERSIFIED GROUP, INC.
--------------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0292161
------ ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
437 MAIN AVENUE, SW, HICKORY, NC 28602
--------------------------------------
(Address of principal executive offices)
(704) 322-2044
--------------
(Issuer's telephone number)
__________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
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 report (s), 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, $.001 par value 126,812,560 shares outstanding as of
September 30, 1997.
Transitional Small Business Disclosure Format: Yes __ No X
---
<PAGE>
INDEX
AMERICAN DIVERSIFIED GROUP, INC.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets - December 31, 1996 and September 30, 1997 (Unaudited).
Statements of Operations - Three months and nine months ended September
30, 1997 and 1996 (Unaudited).
Statements of Cash Flows - Three months and nine months ended September
30, 1997 and 1996 (Unaudited).
Notes to Financial Statements
2
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
---------------------
American Diversified Group, Inc. (the "Company") is a development stage
company that is reporting in a periodic report, for the first time
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". This is the result of the fact that for the first fiscal period
in the Company's history, it is reporting initial sales and receivables.
During the Company's three month period ended September 30, 1997, the
Company incurred a net loss of $898,422 ($.0077 per Share) compared to a loss
of $1,725,647 ($.0314 per Share) for the comparable period for the prior
fiscal year. The Company reported sales and accounts receivable of $25,330 for
the three month period ended September 30, 1997, which represented the initial
shipment of generic pharmaceuticals and limited telecommunication sales (which
sales commenced in the last two weeks of the quarter) to the Republic of
Guinea. This is compared to no sales or accounts receivable for the comparable
period of the prior year. In fact, the Company has never before reported any
sales or accounts receivable for any fiscal period.
The Company's net sales and accounts receivable, together with orders,
subject to shipment prior to the end of the fiscal year total approximately
$150,000, exclusive of additional call-back revenues that are projected to be
approximately $20-30,000 per month during the 3-6 month call-back start-up
period. The Company also received a letter of credit from the Republic of
Guinea for approximately $69,000 in order to guarantee payment for generic
pharmaceuticals that are being shipped after the quarter ended September 30,
1997. The Company has also invoiced PERGUE S.A.R.L, in Bamako, Mali, in the
aggregate amount of approximately $15,000 from the sale of HIV test kits to
the Republic of Mali, also subsequent to the end of the quarter ended
September 30, 1997, for shipment prior to year end. Furthermore, the Company
has sourced the remaining generic pharmaceutical products for its existing
West African orders from manufacturer/suppliers at costs that will also
provide gross profit margins that the Company estimates shall be approximately
20%.
The Company has continuing orders for pharmaceutical products in Guinea
and Mali, which will increase in size during successive quarters in fiscal
1998, and projects to expand its orders to other West African countries,
including Burkina Faso and Niger. The Company is increasing its product lines
to include a broad spectrum of generic pharmaceuticals, diagnostic test kits
and blood derivative products, from which it projects gross sales revenues of
medical products to reach $1 million per month. The Company is in the final
stage of testing and approval for dengue fever test kits in Brazil, and with
final approvals should generate projected gross sales of $5 million annually.
3
<PAGE>
Further, the Company's sales for the quarter ended September 30, 1997,
included the first revenues from its venture marketing call-back
telecommunication services in West Africa. Call-back generated only limited
revenues of approximately $3,000 during its few days of operation in
September, with gross profits of approximately 35%. The Company's call-back
business has continued subsequent to the quarter ended September 30, 1997,
with growth in sales, while the Company has maintained its gross profit
margins on call-back.
The Company projects from call-back sales to international and domestic
mining companies, financial institutions, oil companies and foreign embassies
in Guinea and Mali, that it should be able to generate from $200,000 to
$400,000 in gross revenues monthly, after the start-up period of three to six
months. The Company further projects that it will have over 200 customers
during the first half of fiscal 1998 and up to 400 customers by fiscal year
end 1998. with usage of $500 to $1,000 per customer. During September, 1997,
and to date, the Company has signed 50 to 100 customers for call-back service
In order to expand the market penetration for its call-back
telecommunications service in Guinea and Mali, the Company intends to purchase
certain capital equipment which will permit more customers to utilize the
service to capacity. Following the installation of this equipment, the Company
projects significantly increased level of sales revenues and accounts
receivable during the fourth quarter and in succeeding quarters during fiscal
1998.
With the assistance of the Company's consultants, the Company's
management determined during the fiscal year ended December 31, 1996, that its
best business opportunities were in the area of medical products. The Company,
during fiscal 1996, engaged the services of consultants for the purpose of
seeking product lines and thereafter purchase orders and sales from the sale
of medical products, including generic pharmaceuticals, diagnostic test kits
and blood derivative products, principally to developing countries. As a
result, the Company determined to expand its product lines and devote
resources to those areas of the world where it believed it could have greater
likelihood of marketing medical products. To that end, the Company utilized
the services of its consultants, and principally the services of Emerging
Trends Linkages Corp. ("ETLC") in order to generate purchase orders for
medical products.
Generic pharmaceuticals are an extremely cost sensitive market,
especially in developing countries where the Company is doing business. This
has led the Company and its consultants to devote a significant period of time
during fiscal 1997 to sourcing generic pharmaceuticals at competitive pricing.
During and immediately following the quarter ended September 30, 1997, the
Company, with the direct assistance of its consultants, has developed sources
for generic pharmaceuticals, at highly competitive pricing, from foreign
manufacturers. Further, and is continuing to develop additional sources for
products subject to purchase orders received from the Republic of Guinea and
Republic of Mali in West Africa, as well as from South America. The Company
does not believe that it is presently dependent upon any one source, nor does
it believe that it will become dependent upon any manufacturer of generic
pharmaceutical products or other products that it is presently marketing.
4
<PAGE>
The services of the Company's consultants, together with that of the
Company's management, have enabled the Company to reach its present stage of
development, which includes having:
(i) received product registration and approved purchase orders
aggregating approximately $1,000,000 for generic pharmaceuticals and
diagnostic test kits from the Republic of Guinea;
(ii) shipped its initial generic pharmaceutical products subject to that
order, which initial shipment was paid for subsequent to the end of the
quarter ended September 30, 1997;
(iii) secured a loan for $50,000 to finance the initial purchase of the
products subject to the Guinean order, a portion of which were shipped in
July, 1997;
(iv) received a letter of credit in the aggregate initial amount of
approximately $69,000, which sum shall be subject to increase, from PERGUE
S.A.R.L., the Company's representative in the Republic of Mali, which letter
of credit guarantees payment of products which underlie the Company's recent
orders from Mali for generic pharmaceuticals, and diagnostic test kits;
(v) secured third party manufacturers from whom the Company can source
generic pharmaceuticals at competitive pricing so as to enable it to sell such
products at profits in the highly competitive and price sensitive third world
markets;
(vi) secured all preliminary approvals and preliminary testing results of
dengue fever test kits, which are prerequisite for the pending purchase
orders, the Company has for 100,000 dengue fever test kits from the National
Health Foundation of Brazil, State of Roraima, for which technical approvals
have been obtained and final approvals are pending, which order the Company
has been informed by its Brazilian representative may result in additional
orders for up to 1,000,000 test kits in Brazil, nationally; (vii) established
a business venture that is presently marketing call-back telecommunication
services to major multinational corporations, domestic business corporations
and foreign embassies in both Guinea and Mali, from which the Company first
began to generate accounts receivable commencing in September, 1997, with
increasing revenues and accounts receivable being generated subsequent to the
quarter ended September 30, 1997;
(viii) commenced business relationship with manufacturers of complete
lines of generic pharmaceuticals for the purpose of satisfying the Company's
existing purchase orders and its expected increasing level of orders in Guinea
and Mali in West Africa; and
(ix) commenced a business relationship with PERGUE S.A.R.L., Bamako,
Mali, a medical laboratory, pursuant to which the Company, subsequent to the
end of the quarter ended September 30, 1997, shipped laboratory equipment it
owns having a fair market value of approximately $100,000, for future
consideration and use.
5
<PAGE>
The Company's net loss for the period ended September 30, 1997, was
principally the result of the lack of any significant sales revenues during
the quarter, the continued expenses associated with continuing to operate and
maintain its offices and expenses associated with being a reporting company,
which include professional, accounting and printing/EDGAR preparation and
filing fees, and the non-cash expenses associated with the issuance of shares
to its executive officer, directors and consultants for continued services to
the Company in lieu of cash compensation during the period. Such non-cash
compensation expensed during the nine month and three month periods ended
September 30, 1997, was $$1,630,043 and $854,681, respectively, compared to
$2,905,875 and $924,208, respectively, during the same periods in the prior
fiscal year. In order for the Company to pay its operating expenses, including
office rents, salaries to its non-executive employee during a portion of the
quarter, telephone expenses, accounting and bookkeeping fees, printing and
EDGAR preparation costs, publication costs, and other general and
administrative expenses, the Company was dependent upon the funds provided by
non-interest bearing loans from the Company's executive officer and directors,
from a consultant, as well as from the private placement of its securities to
private investors.
During the period from January 1, 1997 through September 30, 1997, the
Company received approximately $150,000 from private investors in the
Company's limited private offering of units, at the price of $.04 per unit,
each unit consisting of one share and one common stock purchase option
exercisable at $.08 per share. The Company has undertaken to register the
shares and the shares underlying the options in a registration statement that
the Company intends to file with the Securities and Exchange Commission as
soon as possible following the end of its 1997 fiscal year. The Company
continues to be dependent upon the willingness of the Company's executive
officer, directors and each of its consultants to accept shares in lieu of
cash compensation for continued services to the Company.
As a direct result of the foregoing business advances and pending
business developments, the Company has been able to raise $150,000 through
September 30, 1997, from the private placement of its units, at the unit
offering price of $.04. This funding, together with the recent payments for
the shipment to Guinea in July, 1997, of $22,378 of generic products for a
portion of the initial Guinean generic pharmaceutical order, and pending
payment of $69,000 by letter of credit for the pending shipment of generic
pharmaceuticals and diagnostic test kits to the Republic of Mali, as well as
additional payments as products are shipped under existing orders from West
Africa, and as levels of telecommunications revenues increase in the coming
months, should enable the Company to become operational and hopefully will
permit the Company's independent auditors to remove from their report the
qualification regarding the Company as a "going concern" during subsequent
fiscal periods, perhaps as early as the second quarter of 1998.
6
<PAGE>
The Company's ability to continue to ship the products that are the
subject of the purchase orders from Guinea and Mali is essential to the
Company's goal of generating increased levels of operating revenues from its
pharmaceutical and medical products businesses in West Africa. The Company is
presently outsourcing these generic pharmaceutical products from several third
party manufacturers and distributors located in the United States, Canada,
Mexico, South America, Europe, and India, which have provided quality generic
pharmaceutical products at highly competitive prices necessary for the Company
to profitably fulfill existing and future orders for such products from West
Africa and elsewhere.
Liquidity and Capital Resources
-------------------------------
The Company, at September 30, 1997, had current assets of approximately
$35,330, exclusive of the $69,000 evidenced by the letter of credit issued in
favor of the Company guaranteeing payment of orders pending shipment following
the end of the quarter ended September 30, 1997. This is compared to $40,303
at the end of the quarter ended June 30, 1997, and $6,800 at the end of the
fiscal year ended December 31, 1996. To assist the Company in its cash flow
requirements which are presently estimated at $15,000 per month, during the
period following the shipment of initial orders which commenced in July, 1997
and have continued during the quarter ended September 30, 1997 and thereafter,
and pending receipt of payment of pharmaceuticals and telecommunication
receivables, the Company from January, 1997 to September 30, 1997, has raised
approximately $150,000 from the private placement of units, as described
above. The units were priced at $.04 per unit, which was the price of the
Company's shares on January 15, 1997, the date of the private placement
subscription agreement.
Notwithstanding indications of interest from investors for additional
subscriptions, there can be no assurance that additional subscriptions shall
be received under the unit private placement. The trading price of shares of
the Company's common stock during the three months ended September 30, 1997,
has been primarily in the range of $.025 to $.05, but during several days in
September, 1997, the trading range increased to the level of $.05 to $.08
range. Following the end of the quarter ended September 30, 1997, the trading
price of the shares has again been in the range of $.025 to $.05 per share.
While the Company has been successful in raising capital in the unit private
placement, there can be no assurance that the Company will be able to continue
to raise private capital, whether or not the Company's shares continue to
trade at the levels that have prevailed during September, 1997.
7
<PAGE>
Based upon the Company's present liquid resources after the expenses that
were paid by the Company following receipt of the private placement funds,
which expenses included office expenses, relocation expenses for the move of
the executive offices to Hickory, NC, professional/accounting fees, transfer
agent and printing service fees, and certain other expenses, and based upon
its present monthly operating expenses of $15,000, the Company will be able to
operate for approximately three months if no additional revenues are generated
from operations or any other sources. However, the Company is generating
increased operating revenues during the last quarter of 1997, as a result of
additional shipments of generic pharmaceuticals to Guinea and Mali, as well as
the increasing receivables from sales of call-back service in West Africa.. In
addition, the Company has received indications of interest from private
investors and furthermore, the Company expects that operating revenues will
continue to increase during each quarter of fiscal year 1998.
The Company's monthly operating expenses of approximately $15,000 during
the quarter ended September 30, 1997 and during the present quarter, include
rent for executive office space in Hickory, NC, use of conference facilities
for its Investor relations offices at Rockefeller Center in NYC,
professional/accounting fees, telephones, but do not reflect any salary to Dr.
Jerrold R. Hinton, the Company's sole executive officer. The Company is
accruing but does not contemplate commencing payment to Dr. Hinton of the
monthly salary of $8,333.33 provided in his three year employment agreement
unless and until it begins to generate revenues from operations. The monies
received from the Company's unit private placement and any pre-export funding
will not be used to pay salaries to officer or fees to directors or
consultants, each of whom have agreed receive compensation for services by the
issuance of shares in registration statements on Form S-8 and/or Form S-1.
During fiscal 1997, the Company's executive officer, directors and consultants
were issued shares in registration statements on Form S-8 in consideration for
their continued services to the Company and in lieu of any cash compensation.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Footnote E to Financial Statements
ITEM 2. CHANGES IN SECURITIES
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
Exhibit 27
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN DIVERSIFIED GROUP, INC.
(Registrant)
December 5, 1997 By: /s/Jerrold R. Hinton
--------------------
Jerrold R. Hinton
President, Chief Executive Officer and
Chief Financial Officer
10
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Page
----
<S> <C>
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes To Financial Statements 5
</TABLE>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C> <C>
Current Assets;
Accounts Receivable $ 25,339
Due from Related Party 5,000
Inventories 5,000
-----------
Total Current Assets 35,300
Fixed Assets:
Property and Equipment (Net of $11,612,
Accum. Depr.) 22,139
Other Assets:
Miscellaneous Receivable (Net of $100,000
Allowance) --
---------
TOTAL ASSETS $ 57,469
=========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
- ----------------------------------------------
Current Liabilities:
Bank Overdraft $ 1,967
Accounts Payable and Accrued Expenses 141,435
Notes Payable to Related Parties 166,521
-----------
Total Current Liabilities 309,923
Shareholders' (Deficit) Equity:
Preferred Stock, Series A, $10 par value
authorized 50,000 shares; none outstanding --
Common Stock, par value $.001 per share,
authorized 200,000,000 shares; issued and
outstanding 126,812,520 shares 126,812
Additional Paid-In Capital 15,515,169
Deferred Consulting Fees (892,207)
Deficit Accumulated During Development Stage (6,190,439)
Deficit Accumulated Prior to Development Stage (8,811,789)
-----------
Total Shareholders' (Deficit) Equity (252,454)
---------
TOTAL LIABILITIES AND SHAREHOLDERS'
(DEFICIT) EQUITY $ 57,469
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
1
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $ 25,330 $ 0 $ 25,300 $ 0
Costs of Sales 31,961 31,961
----------- ----------- ----------- -----------
Gross Profit (Loss) (6,631) 0 (6,631 ) 0
General and Administrative 1,851,553 3,664,714 891,791 1,580,767
----------- ----------- ----------- -----------
Loss From Operations (1,858,184) (3,664,714) (898,422) (1,580,767)
Other Income (Losses):
Losses on Possible Acquisitions (144,880) (144,880)
Gain on Settlement 4,795
----------- ----------- ----------- -----------
Total Other Income (Losses) 0 (140,085) 0 (144,880)
----------- ----------- ----------- -----------
Net Loss ($1,858,184) ($3,804,799) ($898,422) ($1,725,657)
=========== =========== =========== ===========
Net Loss Per Share ($0.0201) ($0.0709) ($0.0077) ($0.0314)
=========== =========== =========== ===========
Average Number of Shares Outstanding 92,451,938 53,650,020 115,925,603 54,952,560
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES,INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1997 1996 1997 1996
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net Loss ($1,858,184) ($3,804,799) ($898,422) ($1,725,647)
Depreciation 4,638 3,254 1,688 1,232
General and Administrative Expenses
Paid by Stock 1,630,043 2,905,875 854,681 924,208
Loss on Possible Acquisition 144,880 144,880
Increase in Accounts Receivable (25,330) (25,330)
(Increase) Decrease in Deposits 570 (570) 30,303
Increase in Accounts Payable and
Accrued Expenses 72,941 622,985 33,723 615,030
----------- ------------ ------------ ------------
Net Cash Flows From Operating Activities (175,322) (128,375) (3,357) (40,297)
----------- ------------ ------------ ------------
Cash Flows From Investing Activities:
Increase in Advances Receivable (100,000) (54,518)
Increase in Due from Related Parties (5,000)
Acquisition of Property and Equipment (9,135) (550)
Payments for Prepaid Acquisition Costs (44,880) (25,482)
----------- ------------ ------------ ------------
Net Cash Flows From Investing Activities (14,135) (145,430) 0 (80,000)
----------- ------------ ------------ ------------
3
</TABLE>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES,INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Cash Flows From Financing Activities:
Sales of Common Stock 150,500 112,500 15,000 31,500
Proceeds from Notes Payable to Related
Parties 50,000 195,158 79,158
Payments on Notes Payable to Related
Parties (9,000) (33,000)
Cash Overdraft (2,043) (11,643)
------- ------- ------- -------
Net Cash Flows From Financing Activities 189,457 274,658 3,357 110,658
------- ------- ------- -------
Net Increase (Decrease) In Cash 0 853 0 (9,639)
Cash, Beginning of Period 0 944 0 11,436
------- ------- ------- -------
Cash, End of Period $ 0 $ 1,797 $ 0 $ 1,797
======= ======= ======= =======
</TABLE>
Non-Cash Transactions in 1997:
- ------------------------------
1. Issued 60,100,000 shares of common stock for services of $1,914,000.
Non-Cash Transactions in 1996:
- ------------------------------
1. Issued 17,850,000 shares of common stock for services of $3,034,500.
2. Issued 2,000,000 shares of common stock for possible acquisition; recorded
at par value.
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements reflect all adjustments, which,
in the opinion of management, are necessary for a fair presentation of the
financial position and the results of operations for the interim period
presented. All adjustments are of a normal recurring nature.
Certain financial information and footnote disclosures which are normally
included in financial statements prepared in accordance with generally accepted
accounting principles, but which are not required for interim reporting
purposes, have been condensed or omitted. The accompanying financial statements
should be read in conjunction with the financial statements and notes thereto as
of December 31, 1996 contained in the Company's Form 10-KSB.
NOTE 2 - EARNINGS (LOSS) PER SHARE
Per share information is computed based on the weighted average number of shares
outstanding during the period.
5
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet (unaudited) as of September 30, 1997 and the statements of operations
(unaudited) for the nine months and three months ended September 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JUL-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 30,330 0
<ALLOWANCES> 0 0
<INVENTORY> 5,000 0
<CURRENT-ASSETS> 35,330 0
<PP&E> 33,751 0
<DEPRECIATION> 11,612 0
<TOTAL-ASSETS> 57,469 0
<CURRENT-LIABILITIES> 309,923 0
<BONDS> 0 0
0 0
0 0
<COMMON> 126,812 0
<OTHER-SE> (379,266) 0
<TOTAL-LIABILITY-AND-EQUITY> 57,469 0
<SALES> 0 0
<TOTAL-REVENUES> 25,330 25,330
<CGS> 31,961 31,961
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,851,553 891,791
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,858,184) (898,422)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,858,184) (898,422)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
