SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-83418-LA
CYBERIA HOLDINGS, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 93-1138967
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1531 14th Street
Santa Monica, California 90404
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (310) 260-3163
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ] N/A
State Issuer's revenues for its most recent fiscal year: $2,626,834.
As of March 31, 2000, the aggregate market value of the Common Stock held by
non-affiliates of the Issuer (450,000 shares) was approximately $202,500
(based upon the average bid and asked prices of such stock on the most
recently available date prior to March 31, 2000). The number of shares
outstanding of the Common Stock ($.0001 par value) of the Issuer as of the
close of business on March 31, 2000 was 30,000,000.
Documents Incorporated by Reference: None
<PAGE>
PART I
Item 1. Description of Business.
Introduction
Cyberia Holdings, Inc. (the "Company") was organized under the laws of
the State of Delaware on February 24, 1994 under the name NW Venture Corp. In
October 1995, the Company completed an initial public offering of certain
shares of its Common Stock pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30, 1995 as a
"blank check" offering subject to Rule 419 of Regulation C under the
Securities Act of 1933.
In May 1996, the Company executed an agreement with Cyberia, Inc., a
California corporation ("Cyberia"), and its shareholders to acquire all of the
issued and outstanding shares of capital stock of Cyberia in exchange for
25,500,000 shares of Common Stock of the Company (the "Cyberia Acquisition").
At the time thereof and through December 31, 1998, Cyberia was primarily
involved in the business of creating original music for television and radio
commercials. As of December 26, 1996, and following successful completion of
a reconfirmation offering required pursuant to Rule 419, the Company
consummated the Cyberia Acquisition whereby Cyberia became a wholly-owned
subsidiary of the Company.
During 1996, Cyberia entered into an agreement to form Media
Revolution, LLC ("Media Revolution"), which was organized to design Internet
web sites, computer games and software. The Company owns 80% of this entity
and has control of the day-to-day operations. A non-related party owns the
remaining 20%.
On January 13, 1997, the Company changed its corporate name to Cyberia
Holdings, Inc. to reflect the change of direction and new business of the
Company which resulted from the aforesaid transaction with Cyberia.
In October of 1998, Management decided by a unanimous vote of the Board
of Directors to discontinue the operations of Cyberia, Inc. as of December 31,
1998. Management believed that the investment versus potential return was too
high to support continuing operations. It was decided that the Company would
rather focus its resources on its subsidiary company, Media Revolution, which
is presently an Internet solutions developer for Fortune 1000 clients and
Internet start-ups.
Unless the context otherwise requires, all references herein to the
"Company" refer to Cyberia Holdings, Inc. and its consolidated subsidiaries.
This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs and assumptions made by
the Company's management as well as information currently available to the
management. When used in this document, the words "anticipate", "believe",
"estimate", and "expect" and similar expressions, are intended to identify
forward-looking statements. Such statements reflect the current views of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Company does not intend to update these
forward-looking statements.
Overview of Business and Production Process
Media Revolution is a digital communications company that develops and
builds interactive business solutions for globally branded clients. Media
Revolution combines its expertise in digital design and production with
strategic consulting and technology to create innovative interactive solutions
for its clients. Media Revolution offers its clients a wide range of digital
communications services including strategy consulting; analysis and design;
project management; Intranet, Extranet and Web site design; E-commerce
business systems; application development; graphic design and user interface;
online marketing and brand development; and maintenance. Media Revolution is
positioned to provide a wide range of digital communications solutions to its
clients through its professional full time staff coupled with strategic
partnerships with high quality service providers in systems integration,
enterprise e-commerce and media planning.
Media Revolution focuses on making its digital communications solutions
an integral part of its clients' business strategies in order to promote long-
term client relationships. Media Revolution uses project management teams with
experience in consulting, creative, media, technology and production
disciplines, led by experienced interactive producers, to provide it's
integrated digital communication services. Media Revolution employs a
collaborative approach between the internal team and the client to ensure that
information is delivered and absorbed in ways that impact the experience and
influence the desired user behavior. The Company handpicks the technologies
that it believes will work best for the client and its target audience and
works with high quality service providers in disciplines which complement the
staff of the Company.
Media Revolution has developed a process which it believes maximizes
the return on investment for its clients. From strategic consulting to web
development to ad banner development, the Company's overlying methodology
applies to all aspects of the services it provides. The three-step circular
process includes a discovery, strategy and production phase:
1. Discover : Internet Business Statement (IBS)
2. Strategize : Creative and Technical Specifications (CTS)
3. Produce : Digital File Delivery
Depending on the complexity of the project, the client's clarity on the
scope of work, and the Company's understanding of the project, Media
Revolution can either bid on providing strategic consulting to create an IBS,
bid on the cost to write an IBS and CTS, or bid on the cost to deliver the
complete project including digital file delivery. The client can also supply
an IBS or CTS for Media Revolution to bid on and implement. Once Media
Revolution delivers digital files to a client the Company believes it is
positioned to begin the process again.
Revenues and Clients
Revenues primarily consist of fees from consulting services engagements
(including both time-and-materials and fixed-price engagements). The services
offered by the Company include strategy consulting; analysis and design;
project management; Intranet, Extranet and Web site design; e-Commerce
business systems; application development; graphic design and user interface;
online marketing and brand development; and maintenance. The Company's client
list includes many of the world's top companies and brands.
For the years ended December 31, 1999 and 1998, the Company had net
sales of approximately $2,627,000 and $1,163,000, respectively. During 1999
and 1998, the Company provided its services for approximately 50 and 67
projects, respectively. During the year ended December 31, 1999, the Company
did business with one customer, Think New Ideas, whose sales comprised
approximately 37% of total net sales. In 1999, the Company shifted its focus
to securing projects with a larger scope and value, which allowed for an
increase in net sales while at the same time decreasing the number of projects
taken on during the year. This shift in focus, coupled with an expansion of
the Company's clientele has resulted in a 125% increase in net sales.
Competition
The market for the Company's service is competitive, highly fragmented
and is characterized by pressures to incorporate new capabilities, accelerate
job completion schedules and reduce prices. The Company faces competition from
a number of sources, including traditional advertising and marketing firms,
project-oriented interactive marketing firms and information technology
service providers, many of which are larger than the Company and have greater
resources than the Company. Media Revolution's primary competitors include US
Interactive, Razorfish, iXL, Think New Ideas and USWeb/CKS. Many traditional
advertising agencies have also started to develop digital media and
interactive communications capabilities. Moreover, certain project-oriented
interactive marketing firms and information technology service providers
provide Internet consulting, corporate identity and packaging, production,
advertising and website design services, and are technologically proficient in
the digital media and interactive communications fields. In addition, in-house
marketing and information systems departments and graphic design companies
compete with certain portions of the Company's business.
Competition depends to a large extent on clients' perceptions of the
quality and creativity as well as the technical proficiency of the Company's
digital communications services and those of the Company's competitors. The
Company also compete on the basis of price and the ability to serve clients on
a broad geographic basis. To the extent the Company loses clients to its
competitors because of dissatisfaction with the Company's services, or if the
Company's reputation is adversely impacted for any other reason, the Company's
future operating performance could be materially and adversely affected.
Government Regulations
Although there are currently few laws or regulations directly governing
access to the Company's commerce on the Internet, due to the increasing
popularity and use of the Internet, a number of laws and regulations may be
adopted regarding user privacy, pricing, acceptable content, taxation and
quality of products and services. In addition, the government has been
requested to regulate and impose fees on Internet service providers and online
service providers in a manner similar to long distance telephone carriers. The
adoption of any such laws or regulations could affect the costs of
communicating on the Internet and adversely affect the growth in use of the
Internet, or decrease the acceptance of the Internet as a communications and
commercial medium, which could in turn decrease the demand for Media
Revolution's services or otherwise have a material adverse effect on Media
Revolution's business, results of operations and financial condition.
Employees
In order to maintain high levels of creativity and quality, Media
Revolution places great importance on recruiting and retaining talented
employees. As of December 31, 1999, Media Revolution employed approximately 27
full-time employees. Media Revolution also hires temporary employees and
contract service providers as necessary.
Item 2. Description of Property.
The Company maintains its executive offices pursuant to a written
agreement with Mojo Records, LLC, which is under common ownership. Such
offices are located at 1531 14th Street, Santa Monica, California 90404. Rent
expense was $196,317 and $117,200 for the years 1999 and 1998 respectively.
This increase in rent is due to the need for the Company to support the
doubling of the staff size from the prior year. In doing such the Company has
leased a larger space at a higher rate. Additionally, the monthly rent
includes such costs as utilities and maintenance which were paid direct during
the prior year.
Item 3. 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.
Item 4. Submission of Matters to a Vote of Security-Holders.
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.
PART II
Item 5. Market for Common Equity
and Related Stockholder Matters.
(a) Market Information.
The Company's Common Stock is traded in the over-the-counter market and
is listed on the OTC Bulletin Board under the symbol "CBHD". To date, there
has been only sporadic trading of the Company's Common Stock. The high and
low bid quotations for the Company's Common Stock tabulated below represent
prices between dealers and do not include retail markups, markdowns,
commissions or other adjustments and may not represent actual transactions.
Bid Prices
Period
High Low
Year Ended December 31, 1998:
First Quarter No prices available
Second Quarter $.1875 $.0625
Third Quarter $.1875 $.09
Fourth Quarter $.10 $.10
Year Ended December 31, 1998:
First Quarter $.375 $.0625
Second Quarter $.625 $.125
Third Quarter $.25 $.25
Fourth Quarter No prices available
(b) Holders.
As of March 31, 2000 there were approximately 35 record holders of the
Company's Common Stock.
(c) Dividends.
The Company has never declared any cash dividends on its Common Stock
and does not anticipate declaring cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis
or Plan of Operation.
The following discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto and is qualified in its
entirety by the foregoing.
Background
The Company was organized under the laws of the State of Delaware on
February 24, 1994 under the name NW Venture Corp. In October 1995, the
Company completed an initial public offering of certain shares of its Common
Stock pursuant to a Registration Statement declared effective by the
Securities and Exchange Commission on June 30, 1995 as a "blank check"
offering subject to Rule 419 of Regulation C under the Securities Act of 1933.
In May 1996, the Company executed an agreement with Cyberia, Inc., a
California corporation ("Cyberia"), and its shareholders to acquire all of the
issued and outstanding shares of capital stock of Cyberia in exchange for
25,500,000 shares of Common Stock of the Company (the "Cyberia Acquisition").
At the time thereof and through December 31, 1998, Cyberia was primarily
involved in the business of creating original music for television and radio
commercials. As of December 26, 1996, and following successful completion of
a reconfirmation offering required pursuant to Rule 419, the Company
consummated the Cyberia Acquisition whereby Cyberia became a wholly-owned
subsidiary of the Company.
During 1996, Cyberia entered into an agreement to form Media
Revolution, LLC ("Media Revolution"), which was organized to design Internet
web sites, computer games and software. The Company owns 80% of this entity
and has control of the day-to-day operations. A non-related party owns the
remaining 20%.
On January 13, 1997, the Company changed its corporate name to Cyberia
Holdings, Inc. to reflect the change of direction and new business of the
Company which resulted from the aforesaid transaction with Cyberia.
On October 6, 1998 a meeting of the Board of Directors and Officers was
held in which it was decided to cease the operations of Cyberia, Inc. as of
December 31, 1998 to allow the Company to focus its resources on the growth
and development of Media Revolution. All existing assets and liabilities at
the close of operations on December 31, 1998 have been transferred to Cyberia
Holdings, Inc. as per the Certificate of Dissolution filed in the Office of
the Secretary of State of California.
Results of Operations
Net sales for the year ended December 31, 1999 increased to 2,627,000
as compared to net sales for the year ended December 31, 1998 of $1,163,000,
an increase of $1,464,000. This increase is primarily due to the Company's
restructuring and changes in marketing strategy. During 1999 the Company was
able to focus its resources on the subsidiary company, Media Revolution. The
result of such focus and dedication of the Company's resources has allowed
Media Revolution, in management's opinion, to differentiate itself within the
Internet services marketplace resulting in a year which achived a 125%
increase in net sales.
Additionally in 1999, Media Revolution determined the sectors for which
it wanted to expand its clientele. These new sectors included, but were not
limited to, the automotive industry, telecommunications industry and
hospitality industry. Media Revolution has been able to tap into each of
these sectors and begin to establish a presence within the market place. This
broadening of the clientele has allowed the Company to place less emphasis on
the entertainment industry, previously the Company's primary source of
revenue.
Cost of sales was $260,000 for the year ended December 31, 1999 as
compared to $379,000 for the year ended December 31, 1998. This decrease is
primarily due to an increase in project size which created a decrease in the
number of projects during the year. While working on projects which have a
larger scope the Company is able to reduce the labor cost allocated to each
project, in turn reducing the cost of sales. Additionally, with the increase
in staff size, the Company was able to provide most production services in-
house, therefore eliminating outside services and reducing the cost of sales.
The average project fee in 1999 nearly doubled from the prior year allowing
the Company to generate higher net sales while minimizing the cost of sales
for each project.
The Company reported income from continuing operations before
discontinued operations of $121,000 for the year ended December 31, 1999 as
compared to a net operating loss before discontinuing operation of $164,000
for the year ended December 31, 1998, an increase of $285,000. This increase
was the result of the continuing restructuring of the Company. The Company
began to see a reversal of the net operating loss experienced in 1998 and
improving profit margins, the direct result of changes to the management
structure.
General and administrative expenses increased to $2,051,000 for the
year ended December 31, 1999 compared to $1,059,000 for the year ended
December 31,1998, an increase of $992,000. The increase is due to the
continued search for and hiring of new employees and the costs associated with
the hiring of these new employees. To remain competitive in the job market,
the Company found it necessary to enhance the health insurance benefit package
offered to new and existing employees. Additionally, there was an increase in
accounting and legal fees, which were needed in order to support the growth of
Media Revolution.
In the third quarter of 1999, the Company launched an advertising
campaign signifying its first such campaign since its inception. Media
Revolution advertised in numerous trade magazines allowing the Company to
brand its own name within the public sector. This campaign attributed to the
increase seen in general and administrative expenses for the year.
Liquidity and Capital Resources
At December 31, 1999, the Company had working capital surplus of
$104,679. The ratio of current assets to current liabilities was
approximately 1.32 to 1 at December 31, 1999. At December 31, 1999, the
Company had stockholder's equity of $208,946.
To date, the Company has funded its activities principally from cash
flows generated from operations. It is anticipated that the Company's
continuing cash flows from operations will be sufficient to meet its cash and
working capital requirements at least through 2000.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written
using two digits, rather than four, to define the applicable year. Software
programs and hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations causing disruptions
of operations, including a temporary inability to engage in normal business
activities.
Prior to the year 2000, the Company determined that its critical
software (primarily widely used software packages) and all of its critical
business systems, were already year 2000 compliant.
As of the date of this report, no significant problems had been
encountered. However, there can be no assurance that this will continue to be
the case, and there are also continuing risks to the Company's operations from
year 2000 failures by third parties such as suppliers. In this regard, the
Company continues to monitor the situation.
The Company previously had initiated communications with third parties
with whom the Company has material direct and indirect business
relationships in order to determine the extent to which the Company's
business is vulnerable to the third parties failure to make their
systems year 2000 compliant. Based upon the information gathered from such
other third parties, the Company is not aware of any material third party year
2000 risks, which have not been resolved. As of the date of this report, the
Company has not experienced any significant year 2000 issues arising from
third parties.
The Company continues to maintain close contact with critical suppliers
with respect to such third parties year 2000 compliance and any year 2000
issues that might arise at a later date.
The Company currently does not have a contingency plan in the event
year 2000 issues arise at a later date. Such a plan will be developed if it
becomes necessary. Although no assurance can be given that there will be no
interruption of operations due to year 2000 issues, the Company has not to
date suffered any significant problems and believes that it has reasonably
assessed all of its systems in order to ensure that the Company will not
suffer any material adverse effect in the future.
The Company has used and will continue to use, if necessary, internal
resources to resolve year 2000 issues. Costs incurred to date by the Company
have not been material. The Company does not anticipate incurring any further
costs.
Item 7. Financial Statements.
See the Consolidated Financial Statements annexed to this report.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Set forth below are the present directors and executive officers of the
Company. Note that there are no other persons who have been nominated or
chosen to become directors nor are there any other persons who have been
chosen to become executive officers. There are no arrangements or
understandings between any of the directors, officers and other persons
pursuant to which such person was selected as a director or an officer.
Directors are elected to serve until the next annual meeting of stockholders
and until their successors have been elected and have qualified. Officers
serve at the discretion of the Board of Directors.
Present Position Has Served As
Name Age and Offices Director Since
Jay Rifkin 44 President, Chief Executive 1997
Officer, Treasurer,
Chief Financial Officer
and Director
Hans Zimmer 42 Vice President, Secretary 1997
and Director
Martin Rifkin 38 Director 1994
JAY RIFKIN has been President, Chief Executive Officer, Treasurer and a
Director of the Company since January 1997, and Chief Financial Officer since
January 1999. Since 1989, Mr. Rifkin has been President of Mojo Music, Inc.,
which is a general partner of Media Ventures. Media Ventures is an
entertainment cooperative in Santa Monica, California, which has been
instrumental in the development of numerous musical careers. Additionally,
Jay Rifkin is the President of Mojo Records, LLC which is an independent
record label with several successful artists, including, the platinum selling
Cherry Poppin' Daddies and the gold-selling Reel Big Fish and Goldfinger. Mr.
Rifkin is an award winning music producer and engineer having received a
Grammy Award as Producer for Best Children's Album and American Music Awards
for Producer of Best Album and Best Soundtrack. In 1998, Disney's "The Lion
King" premiered on Broadway, featuring two of Rifkin's songs from "Rhythm of
the Pride lands" and receiving a Tony nomination for best music. Mr. Rifkin
is the brother of Martin Rifkin.
HANS ZIMMER has been Vice President, Secretary and a Director of the
Company since January 1997. Mr. Zimmer has been President of Remote Control
Productions, Inc., which is a general partner of Media Ventures since 1989.
Mr. Zimmer is an award winning composer having received an Academy Award and
Golden Globe for Best Original Score for "The Lion King". He also received a
Grammy Award as Producer of Best Children's Album and Best Instrumental
Arrangement with Accompanying Vocalist for "The Lion King". Mr. Zimmer also
received Academy Award Nominations for Best Original Score for the films
"Rainman, "As Good As it Gets" and "The Thin Red Line". He has composed the
scores for numerous other major motion pictures including but not limited to
"Black Rain", "Driving Miss Daisy, "Bird on a Wire", "Days of Thunder",
"Pacific Heights", "Thelma & Louise, "Crimson Tide" "Nine Months",
"Gladiators", "Mission Impossible II ", "Prince of Egypt", and "El Dorado".
MARTIN RIFKIN has been a Director of the Company since its inception in
February 1994 and was President, Secretary and Treasurer of the Company from
its inception through December 1996. Since February 1992, Mr. Rifkin has been
President of Nutrition Now, Inc. ("Nutrition Now"), a company which
manufactures and markets nutritional supplements. Since December 1995, he has
been director of Nutrition Now and, since November 1987, he has been its
Secretary and Treasurer. From August 1988 to February 1992, he was its Vice
President. In addition, Mr. Rifkin has been, since April 1985, a Director of
Nova International Films, Inc., a company which principally has been engaged
in the business of financing and producing motion pictures, and from April
1985 to October 1994, he was its Vice President, and since October 1994, he
has been its President and Treasurer. Such company is at the present time
relatively inactive. In addition, Mr. Rifkin has been Treasurer and Director
of Profit Merchandising Corp. since September 1983 and Vice President since
June 1985. Such company is engaged in the distribution of weatherstripping
products. Martin Rifkin is the brother of Jay Rifkin.
Item 10. Executive Compensation.
The Company has no employment agreements with any of its executive
officers. The following summary compensation table sets forth information
concerning the annual and long-term compensation for services in all
capacities to the Company for the years ended December 31, 1999, 1998 and 1997
of those persons who were, at December 31, 1999 (i) the chief executive
officer and (ii) the other most highly compensated executive officers of the
Company, whose annual base salary and bonus compensation was in excess of
$100,000 (the named executive officers):
Summary Compensation Table
Annual Long-Term
Compensation Compensation
Restricted Shares
Name and Principal Fiscal Stock Underlying
Position Year Salary Bonus Awards Options
Jay Rifkin, 1999 $0 $0 0 0
President and 1998 $0 $0 0 0
Chief Executive 1997 $0 $0 0 0
Officer
Hans Zimmer, 1999 $0 $0 0 0
Vice President and 1998 $0 $0 0 0
Secretary 1997 $0 $0 0 0
Since inception, no director has received any cash compensation for his
services as such. In the past, directors have been and will continue to be
reimbursed for reasonable expenses incurred on behalf of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 31, 2000, by
(i) each person who is known by the Company to own beneficially more than 5%
of the Company's outstanding Common Stock; (ii) each of the Company's
directors; and (iii) directors and officers of the Company as a group:
Number Percent
of Shares of
Name and Address Owned Class
Jay Rifkin 13,500,000 45.0%
1531 14th Street
Santa Monica, CA 90404
Hans Zimmer 12,000,000 40.0%
1531 14th Street
Santa Monica, CA 90404
Martin Rifkin 4,050,000 13.5%
6350 N.E. Campus Drive
Vancouver, WA 98661
All Officers and Directors 29,550,000 98.5%
as a Group (3 Persons)
Item 12. Certain Relationships and Related Transactions.
The Company paid approximately $2,907 and $38,707 to Media Ventures, a
company operated by Jay Rifkin and Hans Zimmer, for sound mixing and recording
services for the years ended December 31, 1999 and 1998, respectively. The
Company also paid Media Ventures $86,123 and $249,738 for related overhead
costs for the period ending December 31, 1999 and 1998 respectively.
During the year ended December 31, 1997, the line of credit for the
Company and all the Company's affiliates was transferred to an affiliate,
Media Ventures. All affiliates can draw down on the line of credit, and the
line of credit is collateralized by all assets of the Company and its
affiliates. The line of credit bears interest at prime (8.5% at December 31,
1999). At December 31, 1999, $180,000 of the amount due to Media Ventures was
for advances on the line of credit. As of March 31, 2000 there was only
$21,000 which remained owing to Media Ventures for advances on the line of
credit.
See Part I, Item 2 elsewhere herein for information on the facilities
leased by the Company. Rent expense paid to related parties was $197,317 and
$65,100 for the years ended December 31, 1999 and 1998, respectively.
Effective as of October 22, 1999, the Company's then Executive Vice
President who was also serving as the Chief Executive Officer of Media
Revolution submitted his resignation to the Company to pursue other business
opportunities. As part of his resignation, Media Revolution purchased
1,500,000 shares of the Company's Common Stock owned by the then Executive
Vice President for $70,000. Subsequent thereto, Jay Rifkin, the Company's
President, purchased said 1,500,000 shares from Media Revolution for $70,000.
The remaining balance due at December 31, 1999 was $26,101.
Item 13. Exhibits, List and Reports on Form 8-K.
(a) Exhibits.
3.1 Registrant's certificate of incorporation(1)
3.2 Registrant's certificate of amendment to its
certificate of incorporation (filed January 13, 1997)(3)
3.3 Registrant's by-laws(1)
4.1 Specimen certificate for common stock(1)
10.1 Agreement and Plan of Tax Free Reorganization dated May
22, 1996 by and among NW Venture Corp., Cyberia, Inc.
("Cyberia") and the shareholders of Cyberia(2)
22.0 Cyberia Holdings, Inc., parent and subsidiaries(3)
___________________
(1) Incorporated herein by reference from the Company's
Registration Statement on Form SB-2 declared effective
as of June 30, 1995.
(2) Incorporated herein by reference from the Company's
Post-Effective Amendment to the Registration Statement
on Form SB-2 declared effective as of December 24,
1996.
(3) Incorporated herein by reference from the Company's
Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the last
quarter of the period covered by this report:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
CYBERIA HOLDINGS, INC.
(Registrant)
By: /s/Jay Rifkin
Jay Rifkin, President
Dated: April 13, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant, and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/Jay Rifkin President, Chief April 13, 2000
Jay Rifkin Executive Officer,
Treasurer, Director
(Principal Executive
Officer and Principal
Financial Officer)
/s/Hans Zimmer Vice President, April 13, 2000
Hans Zimmer Secretary, Director
/s/Martin Rifkin Director April 13, 2000
Martin Rifkin
/s/Kellie Stein Controller April 13, 2000
Kellie Stein
<PAGE>
CYBERIA HOLDINGS, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONTENTS
December 31, 1999
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Consolidated Balance Sheet 2 - 3
Consolidated Statements of Operations 4 - 5
Consolidated Statements of Stockholders' Equity 6
Consolidated Statements of Cash Flows 7 - 8
Notes to Consolidated Financial Statements 9 - 16
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Cyberia Holdings, Inc.
We have audited the accompanying consolidated balance sheet of Cyberia
Holdings, Inc. and subsidiary as of December 31, 1999, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the two years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cyberia
Holdings, Inc. and subsidiary as of December 31, 1999, and the results of
their operations and their cash flows for each of the two years in the period
ended December 31, 1999 in conformity with generally accepted accounting
principles.
/s/SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
March 23, 2000
<PAGE>
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
December 31, 1999
ASSETS
Current assets
Cash and cash equivalents $ 27,437
Accounts receivable 349,841
Prepaid expenses and other assets 9,346
Deferred tax asset 18,320
Due from stockholder/officer 26,101
Total current assets 431,045
Furniture and equipment, net 227,945
Other assets 42,948
Total assets $701,938
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
December 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Book overdraft $ 24,863
Current portion of capital lease obligations 57,132
Accounts payable and accrued expenses 46,836
Income taxes payable 28,101
Due to affiliates 142,084
Accrued payroll and payroll taxes 25,039
Deferred income 1,500
Net liabilities of discontinued operations 811
Total current liabilities 326,366
Deferred income taxes 7,144
Capital lease obligations, net of current portion 51,897
Total liabilities 385,407
Minority interest 107,585
Commitments
Stockholders' equity
Common stock, $0.0001 par value
50,000,000 shares authorized
30,000,000 shares issued and outstanding 3,000
Additional paid-in capital 9,269
Retained earnings 196,677
Total stockholders' equity 208,946
Total liabilities and stockholders' equity $701,938
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31,
1999 1998
Net sales $2,626,834 $1,163,249
Expenses
Cost of sales 259,913 379,050
General and administrative expenses 2,051,010 1,058,509
Total expenses 2,310,923 1,437,559
Income (loss) from operations 315,911 (274,310)
Other income (expense)
Interest income 1,863 1,010
Other income - 3,257
Interest expense (25,582) (656)
Total other income (expense) (23,719) 3,611
Income (loss) from continuing
operations before provision
for (benefit from) income taxes,
minority interest, and
discontinued operations 292,192 (270,699)
Provision for (benefit from)
income taxes 120,077 (106,298)
Income (loss) from continuing
operations before minority
interest and discontinued operations 172,115 (164,401)
Minority interest (50,743) -
Income (loss) from continuing
operations before
discontinued operations 121,372 (164,401)
Discontinued operations
Income from operations of
discontinued subsidiary, net of
provision for income taxes of $67,000 - 101,414
Loss on disposal of subsidiary,
including provision of
$88,811 for operating losses
during the phase-out period,
net of benefit for income taxes
of $50,000 - (76,786)
Net income from
discontinued operations - 24,628
Net income (loss) $121,372 $(139,773)
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31,
1999 1998
Basic and diluted earnings
(loss) per share
From continuing operations $0.004 $(0.01)
From discontinued operations - -
Total basic and diluted
earnings (loss) per share $0.004 $(0.01)
Basic and diluted weighted-average
shares outstanding 30,000,000 30,000,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31,
Common Stock Treasury
Shares Amount Stock
Balance, December 31, 1997 30,000,000 $3,000 $ -
Net loss
Balance, December 31, 1999 30,000,000 3,000 -
Purchase of 1,500,000
shares of treasury stock 43,899
Sale of 1,500,000
shares of treasury stock (43,899)
Net income
Balance, December 31, 1999 30,000,000 $3,000 $ -
The accompanying notes are an integral part of these financial statements.
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Continued)
For the Years Ended December 31,
Additional
Paid-in Retained
Capital Earnings Total
Balance, December 31, 1997 $9,269 $215,078 $227,347
Net loss (139,773) (139,773)
Balance, December 31, 1999 9,269 75,305 87,574
Purchase of 1,500,000
shares of treasury stock 43,899
Sale of 1,500,000
shares of treasury stock (43,899)
Net income 121,372 121,372
Balance, December 31, 1999 9,269 $ 196,677 $208,946
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998
Cash flows from operating activities
Net income (loss) from continuing operations $121,372 $(164,401)
Adjustments to reconcile net income (loss)
from continuing operations to net cash
provided by (used in) operating activities
Depreciation and amortization 71,115 23,008
Minority interest 50,743 -
Deferred income taxes 49,390 (91,960)
(Increase) decrease in
Accounts receivable (173,368) 82,375
Work in progress - 25,050
Prepaid expenses and other assets (660) (5,994)
Other assets (20,995) (8,809)
Due from stockholder/officer (26,101) -
Increase (decrease) in
Accounts payable and accrued expenses (55,476) 40,125
Income taxes payable 18,606 (3,189)
Due to affiliates 51,313 12,041
Accrued payroll and payroll taxes 4,105 (44,553)
Deferred income (1,500) (77,000)
Net cash provided by (used in)
continuing operating activities 88,544 (213,307)
Net cash provided by (used in)
discontinued operating activities (88,000) 107,622
Net cash provided by (used in)
operating activities 544 (105,685)
Cash flows from investing activities
Note receivable 7,329 11,500
Advances to employees - 7,796
Purchase of furniture and equipment (70,434) (25,824)
Net cash used in continuing
investing activities (63,105) (6,528)
Net cash provided by discontinued
investing activities - 5,817
Net cash used in investing activities (63,105) (711)
Cash flows from financing activities
Book overdraft 24,863 -
Principal payments on capital
lease obligations (39,863) -
Purchase of treasury stock (43,899) -
Sale of treasury stock 43,899 -
Net cash used in continuing
financing activities (15,000) -
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1999 1998
Net decrease in cash and
cash equivalents $(77,561) $(106,396)
Cash and cash equivalents,
beginning of year 104,998 211,394
Cash and cash equivalents,
end of year $ 27,437 $ 104,998
Supplemental disclosures of
cash flow information
Interest paid $ 25,582 $ 656
Taxes paid $ 52,081 $ -
Supplemental schedule of non-cash investing and financing activities
During the year ended December 31, 1999, the Company entered into capital
lease obligations of $148,892 for the use of equipment.
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Line of Business
On December 28, 1996, NW Venture Corp. ("NW Venture") acquired all of the
outstanding stock of Cyberia, Inc. For accounting purposes, the acquisition
has been treated as a recapitalization of Cyberia, Inc. with Cyberia, Inc. as
the acquirer (reverse acquisition). NW Venture subsequently changed its name
to Cyberia Holdings, Inc. ("CHI") (see Note 2).
CHI designs Internet web sites, computer games, and software and sells its
services to customers in the United States.
In August 1996, CHI entered into a joint venture to form Media Revolution,
LLC. CHI owns 80% of this entity and has control of the day-to-day operations.
The remaining 20% is owned by an unrelated stockholder. Media Revolution, LLC
has been consolidated with CHI in the accompanying consolidated financial
statements with the minority interest reflected as a separate component of the
consolidated balance sheet.
Principles of Consolidation
The consolidated financial statements include the accounts of CHI and its
subsidiary (collectively, the "Company"). All material intercompany
transactions and balances have been eliminated.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid investments purchased with original maturities of three months or less
to be cash equivalents. At December 31, 1999, cash and cash equivalents
consisted of cash in banks and money market funds.
Furniture and Equipment
Furniture and equipment are stated at cost. The Company provides for
depreciation and amortization using accelerated and straight-line methods over
the estimated useful lives as follows:
Capital lease obligations 3 years
Furniture and fixtures 7 years
Computer equipment 3 years
Office equipment 7 years
Leasehold improvements 5 years
Expenditures for maintenance and repairs are charged to operations as incurred
while renewals and betterments are capitalized. Gains or losses on the sale
of furniture and equipment are reflected in the statements of operations.
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings (Loss) Per Share
The Company utilizes Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share." Basic earnings (loss) per share is computed by
dividing income (loss) available to common stockholders by the
weighted-average number of common shares outstanding. Diluted earnings (loss)
per share is computed similar to basic earnings (loss) per share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. Common equivalent
shares are excluded from the computation if their effect is anti-dilutive. As
such, basic and diluted earnings (loss) per share are the same.
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance with
generally accepted accounting principles. For certain of the Company's
financial instruments, including cash and cash equivalents, accounts
receivable, and accounts payable and accrued expenses, the carrying amounts
approximate fair value due to their short maturities.
Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Revenue Recognition
Effective January 1, 1998, the Company changed its method of revenue
recognition from contracting services to the percentage of completion method.
This change was applied on a prospective basis to contracts entered into after
January 1, 1998. The Company's previous revenue recognition policy for
contracting services was upon completion. The Company changed its revenue
recognition policy in order to provide a better matching of revenues and
expenses. Given the Company's circumstances, management believes the
percentage of completion method to be preferable. There is no cumulative
effect of this change. The effect of this change on net income for the year
ended December 31, 1998 was to decrease the net loss by $25,500 or $0.00 per
share.
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company accounts for income taxes under the liability method, which
requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred income taxes
are recognized for the tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial reporting amounts
at each period end based on enacted tax laws and statutory tax rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. The
provision for income taxes represents the tax payable for the period and the
change during the period in deferred tax assets and liabilities. The Company
has elected to use the cash method for reporting income taxes.
Comprehensive Income
The Company utilizes SFAS No. 130, "Reporting Comprehensive Income." This
statement establishes standards for reporting comprehensive income and its
components in a financial statement. Comprehensive income as defined includes
all changes in equity (net assets) during a period from non-owner sources.
Examples of items to be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustments, minimum
pension liability adjustments, and unrealized gains and losses on
available-for-sale securities. Comprehensive income is not presented in the
Company's financial statements since the Company did not have any changes in
equity from non-owner sources.
Recently Issued Accounting Pronouncements
In June 1999, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 136, "Transfer of Assets to a Not-for-Profit Organization or Charitable
Trust that Raises or Holds Contributions for Others." This statement is not
applicable to the Company.
In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities." The Company does not expect adoption of
SFAS No. 137 to have a material impact, if any, on its financial position or
results of operations.
<PAGE>
NOTE 2 - DISPOSAL OF OPERATIONS
Effective October 6, 1998, the Company's Board of Directors elected to shut
down the Company's wholly owned subsidiary, Cyberia, Inc. All assets of
Cyberia, Inc. were transferred to affiliates of the Company, except for $5,817
in net assets related to leasehold improvements. As a result, operations of
Cyberia, Inc. through December 31, 1999 are reported as discontinued
operations. The results from discontinued operations included total revenues
of $1,433,866 and net income from operations of $129,012 for the year ended
December 31, 1998. The disposal date was March 31, 1999.
NOTE 3 - FURNITURE AND EQUIPMENT
Furniture and equipment at December 31, 1999 consisted of the following:
Capital lease equipment $179,545
Furniture and fixtures 9,292
Computer equipment 143,024
Office equipment 20,584
Leasehold improvements 13,272
365,717
Less accumulated depreciation
and amortization (including
$70,019 for capital leases) 137,772
Total $227,945
Depreciation and amortization expense was $71,115 and $20,729 for the years
ended December 31, 1999 and 1998, respectively.
NOTE 4 - COMMITMENTS
The Company subleases facilities for its corporate and operations offices from
a related party pursuant to a written agreement. The related party leases the
office building from an unrelated third party, and the lease expires in
February 2007.
Rent expense paid to related parties was $214,817 and $117,200 for the years
ended December 31, 1999 and 1998, respectively.
Media Revolution, LLC entered into a sublease of capital lease equipment with
a related party. The capital lease obligations are collateralized by the
applicable equipment with an original cost of $179,545. The capital lease
obligations are payable in monthly installments of $5,918, including interest
ranging between 10% and 11% per annum.
<PAGE>
NOTE 4 - COMMITMENTS (Continued)
The following is a schedule of payments under capital lease obligations:
Year Ending
December 31,
2000 $ 62,677
2001 36,228
2002 24,152
123,057
Less amount
representing interest 14,028
109,029
Less current portion 57,132
Long-term portion $51,897
NOTE 5 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 1997, the line of credit for the Company
and all of the Company's affiliates was transferred to an affiliate, Media
Ventures. All affiliates can draw on the line of credit, and the line of
credit is collateralized by all assets of the Company and its affiliates. The
line of credit bears interest at prime (8.5% at December 31, 1999). At
December 31, 1999, $180,000 of the amount due to Media Ventures was for
advances on the line of credit. In addition, the Company advanced Media
Ventures $37,916, which was netted against the amount due to Media Ventures in
the accompanying balance sheet. The net amount due as of December 31, 1999
was $142,084.
The Company paid $2,907 and $38,707 to Media Ventures, which has common
ownership, for sound mixing and recording services for the years ended
December 31, 1999 and 1998, respectively. The Company also paid Media
Ventures $86,123 and $249,738 for related overhead costs for the years ended
December 31, 1999 and 1998, respectively.
During the year ended December 31, 1999, the Company entered into an operating
lease for office space with Mojo Records, LLC, which is under common
ownership. Monthly rent relating to this lease is $19,900. Total rent expense
under this lease for the year ended December 31, 1999 was $179,100.
<PAGE>
NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)
During the years ended December 31, 1999 and 1998, the Company also subleased
different office space from Mojo Records, LLC. Monthly rent relating to this
lease was $4,366. The Company cancelled the lease in March 1999. The total
rent expense under this lease for the years ended December 31, 1999 and 1998
was $17,217 and $52,100, respectively.
During the year ended December 31, 1998, the Company leased office space from
14th Street Grille, LLC, which is under common ownership. Monthly rent
relating to this lease ranged from $1,000 to $9,000 due to an increase in the
square footage rented. Total rent expense under this lease for the year ended
December 31, 1998 was $65,100.
During the year ended December 31, 1999, the Company purchased 1,500,000
shares of treasury stock from a former officer of the Company for $70,000.
These shares were reissued to the Company's President for the same
consideration, of which $26,101 remained outstanding at December 31, 1999.
NOTE 6 - SALES
During the year ended December 31, 1999, the Company conducted business with
one customer whose sales comprised 37% of net sales. During the year ended
December 31, 1998, the Company conducted business with two customers whose
sales comprised 36% and 13% of net sales.
NOTE 7 - INCOME TAXES
Significant components of the provision for (benefit from) taxes based on
income (loss) for the years ended December 31, 1999 and 1998 were as follows:
1999 1998
Current
Federal $ 44,208 $ -
State 26,488 2,351
70,696 2,351
Deferred
Federal 39,334 (92,352)
State 10,047 (16,297)
49,381 (108,649)
Provision for
(benefit from)
income taxes $120,077 $(106,298)
<PAGE>
NOTE 7 - INCOME TAXES (Continued)
Significant components of the Company's deferred tax assets and liabilities
for income taxes consisted of the following at December 31, 1999:
Deferred tax assets
Assets arising from conversion
to cash basis tax payer $12,053
Other 6,267
Total deferred tax assets 18,320
Deferred tax liabilities
Depreciation and amortization
of furniture and equipment 7,144
Net deferred tax asset 11,176
Less current deferred tax asset 18,320
Long-term deferred tax liability $ (7,144)
As of December 31, 1999, the Company had approximately $6,000 in federal net
operating loss carryforwards attributable to losses incurred due to operations
of the Company that may be offset against future taxable income through the
year 2014.
A reconciliation of the expected income tax computed using the federal
statutory income rate to the Company's effective rate for the years ended
December 31, 1999 and 1998 was as follows:
1999 1998
Income tax computed
at federal statutory tax rate 34.0% 34.0%
State taxes,
net of federal benefit 6.0 6.0
Other 0.6 (1.0)
Total 40.6% 39.0%
NOTE 8 - YEAR 2000 ISSUE
The Company has completed a comprehensive review of its computer systems to
identify the systems that could be affected by ongoing Year 2000 problems.
Upgrades to systems judged critical to business operations have been
successfully installed. To date, no significant costs have been incurred in
the Company's systems related to the Year 2000.
<PAGE>
NOTE 8 - YEAR 2000 ISSUE (Continued)
Based on the review of the computer systems, management believes all action
necessary to prevent significant additional problems has been taken. While
the Company has taken steps to communicate with outside suppliers, it cannot
guarantee that they have all taken the necessary steps to prevent any service
interruption that may affect the Company.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CYBERIA HOLDINGS, INC.'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 27,437
<SECURITIES> 0
<RECEIVABLES> 349,841
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 431,045
<PP&E> 365,717
<DEPRECIATION> 137,772
<TOTAL-ASSETS> 701,938
<CURRENT-LIABILITIES> 326,366
<BONDS> 0
<COMMON> 3,000
0
0
<OTHER-SE> 205,946
<TOTAL-LIABILITY-AND-EQUITY> 701,938
<SALES> 2,626,834
<TOTAL-REVENUES> 2,626,834
<CGS> 259,913
<TOTAL-COSTS> 259,913
<OTHER-EXPENSES> 2,051,010
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (25,582)
<INCOME-PRETAX> 292,192
<INCOME-TAX> 120,077
<INCOME-CONTINUING> 172,115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,372
<EPS-BASIC> .004
<EPS-DILUTED> .004
</TABLE>
