<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1998
[ ] 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 Identification No.)
incorporation or organization)
110 North Center St. Suite 202, Hickory, NC 28601
(Address of principal executive offices)
(704) 322-2044
(Issuer's telephone numbe
__________________________________________________
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 230,762,560 shares
outstanding as of September 30, 1998.
Transitional Small Business Disclosure Format: Yes __ No X
</page>
<PAGE>
INDEX
AMERICAN DIVERSIFIED GROUP, INC.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - September 30, 1998 (Unaudited).
Statements of Operations - Three months and nine
months ended September 30, 1998 and 1997 (Unaudited).
Statements of Cash Flows - Three months and nine
months ended September 30, 1998 and 1997 (Unaudited).
Notes to Financial Statements
</page>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Except for the historical information
contained herein, the matters discussed in this
Management's Discussion and Analysis as part of
the Quarterly Report on Form 10-QSB for the 3rd
quarter of 1998, includes forward-looking
statements that may involve a number of risks and
uncertainties that could alter actual results to
differ materially. Actual results may vary based
upon a number of factors, including, but not
limited to, risks in product and technology
development, market acceptance of new products and
continuing demand, the impact of competitive
products and pricing, changing economic conditions
in the markets where the Company is conducting and
seeking to conduct it and other risk factors
detained in the Company's most recent annual
report and other filings with the Securities and
Exchange Commission.
Results of Operations
American Diversified Group, Inc. (the "Company") is
a development stage company. During the Company's three and
nine month periods ended September 30, 1998, the Company
incurred net losses of $638,996 ($.0028 per Share) and
$1,511,352 ($.0074 per share) compared to losses of $892,422
($0.0077 per Share) and $1,858,184 ($0.0201 per share) for
the comparable three and nine month periods of the prior
fiscal year. The Company reported sales of $0 and $66,422
for the three and nine month periods ended September 30,
1998, compared to sales of $25,330 and $25,330 for the three
and ninth month periods for the prior fiscal year. The sales
reported for the three and nine month periods ended
September 30, 1998, represented the sales revenues and
receivables from generic pharmaceuticals and
telecommunication sales, and miscellaneous income, as
discussed below.
The Company's net loss for the nine month period ended
September 30, 1998, was principally the result of the
limited 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
three month period ended September 30, 1998, was $632,971,
compared to $854,681 during the same period in the prior
fiscal year. In order for the Company to pay its operating
expenses, including office rents, communication 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.
</page>
<PAGE>
During the recent quarter, Company continued to pursue
orders for pharmaceutical products in West Africa and
elsewhere, which efforts the Company believes will be
enhanced as a result of recent distribution agreements that
the Company entered into with generic drug manufacturers in
India. In addition during the quarter ended September 30,
1998, the Company also entered into agreements to distribute
on an exclusive basis a Hepatitis-B vaccine, at highly
advantageous and competitive pricing, pursuant to a long
term arrangement with the manufacturer. To assist in the
efforts to market and sell these products, the Company has
also entered into agreements to use the services of
additional representatives, including a company specializing
in the sale of a wide variety of medical and other products
to Brazil.
The Company believes that these new agreements and
arrangements shall place the Company in a sound position to
generate significantly increased orders from a far broader
product line over the next twelve months, beginning in the
fourth quarter of 1998. The Company has also been informed
that the dengue fever test kit that was submitted to the
National Health Foundation, Brazil, for registration,
approval and sale should begin to generate sales revenues in
the very near term, and as early as the fourth quarter of
fiscal 1998, with increasing sales during fiscal 1999.
With respect to the Company's telecommunications
business, the Company during the second quarter of fiscal
1998 reported the pending acquisition of an equity interest
in Global Transmedia Communications Corporation, Miami,
Florida ("GTCC"), and during the third quarter of fiscal
1998 the Company and GTCC have continued to negotiate the
terms of the potential acquisition. The GTCC operation to
date has not yet generated any revenues. With respect to the
Company's call-back venture in West Africa, the Company did
not generate any revenues or receivables during the third
quarter of fiscal 1998 because of technical difficulties
encountered in West Africa with regarding line interruption.
The Company and Emerging Trends Linkages Corp. ("ETLC"),
subsequent to the end of the quarter ended September 30,
1998, negotiated the sale by the Company back to ETLC of the
Company's rights under the call-back agreement, effective as
of September 30, 1998. In consideration for ETLC's
repurchase of all call-back rights and receivables, the
Company received back from ETLC rights to 17,000,000 Shares
of the Company's common stock. In addition, the Company and
ETLC agreed that the Company will have use of offices at
Rockefeller Plaza for its Investor Relations office, with no
office rental expense to the Company. In further
consideration for the agreement with ETLC, ETLC was assigned
by the Company and ETLC assumed the call-back receivables of
approximately $17,400, as well as the receivables from
generic pharmaceutical invoices of $18,100 and $7,500 from
West Africa, which have not been paid to date. This
aggregate sum of approximately $43,000 has been offset from
ADGI's accounts payable to ETLC, which had totaled $65,707
at September 30, 1998. ETLC further agreed to the
cancellation of the remainder of the Company's accounts
payable to ETLC, effective as of September 30, 1998. As a
result, at September 30, 1998, the Company's income
statement reflects a reduction in rent expense of $22,707,
and its balance sheet reflects a decrease in current
liabilities of of $65,707 and a decrease in current assets
of $43,000. The difference is deemed to be a reduction in
rent expense previously accrued.
</page>
<PAGE>
With the assistance of the Company's consultants,
the Company's management determined during the fiscal year
ended December 31, 1997 and the nine months ended September
30, 1998, that its best business opportunities were
principally in the area of medical-pharmaceutical products,
and other products, to countries in South America, Africa
and the Asia. The Company, during fiscal 1997 and through
September 30, 1998, engaged the services of consultants and
entered into contracts for third parties for the purpose of
increasing the Company's product lines and its level of
sales representation, resulting in continuing purchase
orders and sales from the sale of medical products,
including generic pharmaceuticals, diagnostic test kits,
Hepatitis-B vaccine and other medical products and supplies
in its markets.
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 fiscal 1997 and through the nine
month period ended September 30, 1998, the Company, with the
direct assistance of its consultants and with third parties
has developed sources for generic pharmaceuticals and a
Hepatitis-B vaccine, at highly competitive pricing, from
manufacturers in India. The Company does not believe, with
respect to generic pharmaceuticals, 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. However, the Company has only one
source for the Hepatitis-B vaccine and for that reason has
entered into a long term exclusive distribution agreement
with the manufacturer, Shantha Biotechnics, Hyperabad,
India, which grants the Company the exclusive rights to
distribute this vaccine in South America, Africa and Asia.
In addition, after the quarter ended September 30,
1998, the Company through its contacts in Brazil, determined
to pursue a business opportunity in connection with the
import from Brazil and the sale in the United States of
certain commodity products. Pursuant to a purchase order
dated November 3, 1998, and a letter of credit posted on
November 6, 1998, the Company completed a transaction for
the sale of the commodity products and generated sales
revenues for the Company of approximately $220,000, which
will be recognized by the Company during the last quarter of
the fiscal year. The amount of the profits to the Company
shall be determined upon the arrival and completion of the
commodity shipment, scheduled to leave Brazil on or about
November 12, 1998, with arrival and delivery of the products
within ten days. The Company will continue to pursue such
sale opportunities, as they arise, during the coming fiscal
year, involving a variety of products, specifically in those
areas where the Company is conducting business and has
representatives, including Brazil, West Africa, and Asia.
</page>
<PAGE>
The Company's ability to continue to ship medical and
pharmaceutical products to West Africa and begin to ship
such products to South America is essential to the Company's
goal of generating increased levels of operating revenues
from its core pharmaceutical and medical products business.
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.
The services of the Company's consultants, together
with that of the Company's management, while not having
generated any revenues during the third quarter ended
September 30, 1998, have enabled the Company to develop and
expand its business during the last quarter of the fiscal
year. As a result the Company can report the following
business developments:
(i) generated sales revenues of approximately
$220,000 from the import from Brazil and sale in the US of
commodity products, which represent the single highest sale
transaction in the Company's operating history, and which
sale will generate a profit to the Company. The revenues and
profits from this sale will be reported during the last
quarter of fiscal 1998, with a letter of credit being issued
effective November 9, 1998 for 20% ($44,000) of the total
$220,000 sale, with the remainder being paid during
November, 1998 upon shipment;
(ii) secured third party manufacturers from whom the
Company can continue to source generic pharmaceuticals at
competitive pricing so as to enable it to sell such products
at satisfactory profit margins during fiscal 1999, in the
highly competitive and price sensitive developing world
markets;
(iii) secured final approvals of dengue fever test
kits, which are prerequisite for the imminent receipt of
purchase orders for dengue fever test kits from the National
Health Foundation of Brazil;
(iv) entered into a distribution agreement with the
manufacturer of a Hepatitis B vaccine, approved by the World
Health Organization, granting the Company the right to
market at highly competitive pricing the Hepatitis B vaccine
in South America, Africa and Asia; and
(v) commenced business relationship with manufacturers
of complete lines of generic pharmaceuticals for the purpose
of satisfying the Company's anticipated purchase orders in
West Africa and South America.
</page>
<PAGE>
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. However,
with the recent sale of approximately $220,000 in the United
States of an imported Brazilian commodity product, with the
potential for additional commodity product sales both before
and after the end of the fiscal year, and renewing efforts
for the sale of generic pharmaceutical products pursuant to
letters of credit, and anticipated expanded product lines in
the coming months, the Company hopefully will be able to
become operational and therefore may permit the Company's
independent auditors to remove from their report the
qualification regarding the Company as a "going concern"
during subsequent fiscal periods.
Liquidity and Capital Resources
The Company, at September 30, 1998, had current assets
of approximately $7,500, compared to $35,330 at the
September 30, 1997, and $64,460 at the end of the fiscal
year ended December 31, 1997. To assist the Company in its
cash flow requirements which are presently estimated at
$10,000 per month, the Company may determine to continue to
seek subscription proceeds from private investors, as well
as revenues from sales of a variety of products and
services, and anticipated commencement of sales revenues
from dengue fever test kits, among other products, to
Brazil.
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, professional/accounting fees, transfer
agent and printing service fees, and certain other expenses,
and based upon its present monthly operating expenses of
$10,000, the Company will be able to operate for
approximately three months, which include gross profits from
the sale during the last fiscal quarter if no additional
revenues are generated from operations.
The Company's monthly operating expenses for the
quarter ended September 30, 1998 and during the present
quarter include rent for executive office space in Hickory,
NC, 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 positive
cash flow from operations. During fiscal 1997 and the first
three quarters of fiscal 1998, 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. After the end of the quarter ended
September 30, 1998, the Company and ETLC agreed that the
Company would not incur any expense, other than phone
expense in connection with use of conference facilities for
its Investor Relations offices at Rockefeller Center in NYC.
The Company's net loss for the period ended
September 30, 1998, was principally the result of the lack
of any 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. 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. During the period from July 1, 1998
through September 30, 1998, the Company did not receive any
investment proceeds from private investors.
</page>
<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
</page>
<PAGE>
EXHIBIT 27
ARTICLE 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET (UNAUDITED) AND THE
OPERATIONS FOR THE PERIOD ENDED JUNE 30 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</page>
<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)
November 15, 1998 By: /s/Jerrold R. Hinton
Jerrold R. Hinton
President, Chief Executive Officer and
Chief Financial Officer
</page>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1998
</page>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1998
Page
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes To Financial Statements 5
</page>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C> <C>
Current Assets:
Cash $2,515
Accounts Receivable (Net) 5,000
-----------
Total Current Assets 7,516
Fixed Assets:
Property and Equipment
(Net of $18,579 Accum. Depr.) 17,295
Other Assets:
Deposits 570
Advance to Affiliate 15,000
Miscellaneous Receivable
(Net of $100,000 Allowance) -
----------
Total Other Assets 15,570
---------
Total Assets $40,381
=========
LIABILITIES AND SHAREHOLDERS'(DEFICIT) EQUITY
Current Liabilities:
Accounts and Accrued
Expenses Payable $15,609
Accounts and Accrued
Expenses Payable to Related Parties 200,000
Notes Payable to Related Parties 166,463
----------
Total Current Liabilities 382,072
Shareholders' (Deficit) Equity:
Preferred Stock, Series A,
$10 par value authorized 50,000 shares;
none outstanding -
Common Stock, par value $0.001 per share,
authorized 350,000,000 shares; issued and
outstanding 230,762,520 shares 230,762
Additional Paid-In Capital 18,235,119
Stock Subscriptions Receivable (10,500)
Deferred Consulting Fees (731,363)
Deficit Acc. During Develop. Stage (9,253,920)
Deficit Acc. Prior to Develop. Stage (8,811,789)
-----------
Total Shareholders' (Deficit) Equity (341,691)
Total Liabilities and Shareholders' (Deficit) Equity $40,381
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
</Page>
1
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1998 1997 1998 1997
Revenues $66,422 $25,330 $0 $25,330
Cost of Revenues 56,630 31,961 0 31,961
Gross Profit 9,792 (6,631) (6,631)
Selling, Gen. and Adm. Expenses 1,528,946 1,851,553 638,996 891,791
--------- --------- ------- ---------
Loss From Operations (1,519,154) (1,858,184) (638,996) (898,422)
Other Income:
Reimbursement of Losses 7,802 0 0 0
----------- ----------- ---------- ----------
Net Loss ($1,511,352) ($1,858,184) ($638,996) ($898,422)
=========== =========== ========== ==========
Net Loss Per Share ($0.0074) ($0.0201) ($0.0028) ($0.0077)
=========== =========== ========== ==========
Average N0. of Shares Outst. 205,095,892 92,451,938 224,306,038 115,925,603
============ =========== =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
2
</PAGE>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1998 1997 1998 1997
Cash Flows From Operating
Activities:
Net Loss ($1,511,352) ($1,858,184) ($638,996) ($898,422)
Depreciation 5,281 4,638 1,794 1,688
Gen. and Adm. Exp. Paid by Stock 1,423,313 1,630,043 632,971 854,681
(Increase)Decrease in Accoun. Rec. 48,391 (25,330) 24,891 (25,330)
Decrease in Due from Customer 18,100
Decrease in Prepaid Expenses 533
(Increase) Decrease in Deposits 570 30,303
Increase/ (Decrease) In
A/P and Accrued Expenses 30,996 72,941 (29,856) 33,723
Net Cash Flows f. Operat. Act. (3,371) (175,322) 9,437 (3,357)
Cash Flows From Investing
Activities:
Advances to Affiliates (15,000)
Increase in Due from
Related Party (5,000)
Acquisition of Property
and Equipment (2,124) (9,135)
-------- ------- -------- --------
Net Cash Flows From
Investing Activities (17,124) (14,135) 0 0
-------- -------- -------- --------
</TABLE>
3
</page>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
9 MONTHS 9 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED ENDED
SEP 30, SEP 30, SEP 30, SEP 30,
1998 1997 1998 1997
Cash Flows From Financing
Activities:
Sales of Common Stock 150,500 15,000
Brokers' Fee Paid on Sales
of Common Stock (6,000)
Proceeds from Notes
Payable to Related Parties 50,942 50,000
Payments on Notes Payable
to Rel. Parties (15,000) (9,000)
Stocks issued to Pay Notes
Payable to Related Parties (18,000) (18,000)
Cash Overdraft (2,043) (11,643)
-------- ------- -------- --------
Net Cash Flows From
Financing Activities 11,942 189,457 (18,000) 3,357
------- -------- -------- --------
Net Increase (Decrease) In Cash (8,553) 0 (8,563) 0
Cash, Beginning of Period 11,069 0 11,079 0
------- -------- -------- --------
Cash, End of Period $2,516 $0 $2,516 $0
======= ======== ======== ========
</TABLE>
Non-Cash Transactions in 1998:
1. Issued 54,700,000 shares commmon stock for services
of $1,396,400.
Non-Cash Transactions in 1997:
1. Issued 61,100,000 shares common stock for services
of $1,914,000.
SEE NOTES TO FINANCIAL STATEMENTS
4
</page>
<PAGE>
AMERICAN DIVERSIFIED GROUP, INC.
FORMERLY TERA WEST VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1998
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, 1997 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.
</page>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet (unaudited) as of September 30, 1998 and the statements of operations
(unaudited) for the nine months and three months ended September 30, 1998 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-31-1998 DEC-31-1998
<PERIOD-END> SEP-30-1998 SEP-30-1998
<CASH> 2,516 2,516
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 5,000 5,000
<CURRENT-ASSETS> 7,516 7,516
<PP&E> 35,874 35,874
<DEPRECIATION> 18,579 18,579
<TOTAL-ASSETS> 40,381 40,381
<CURRENT-LIABILITIES> 382,072 382,072
<BONDS> 0 0
0 0
0 0
<COMMON> 230,762 230,762
<OTHER-SE> (572,453) (572,453)
<TOTAL-LIABILITY-AND-EQUITY> 40,381 40,381
<SALES> 66,422 0
<TOTAL-REVENUES> 74,224 74,224
<CGS> 56,630 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,528,946 638,996
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,519,154) (638,996)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,511,352) (638,996)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
