SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to ________
Commission File Number 333-07727
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
(Name of Small Business Issuer in Its Charter)
Washington 98-0138706
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
609 Granville Street, Suite 1260
Vancouver, B.C., Canada V7Y 1G5
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (604) 687-0888
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange on
Title of Each Class Which Registered
None 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 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.[X]
Shampan, Lamport Holdings Limited's revenues for the most recent fiscal year
were $62,541.
The aggregate market value of the voting stock of the Registrant held by
non-affiliates of the Registrant, based upon the closing price of the Common
Stock on the OTC Bulletin Board and on the Vancouver Stock Exchange on February
19, 1999 was approximately $75,500 and $151,000 respectively. Shares of Common
Stock held by each officer and director and by each person who owns 5% or more
of the outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
The number of shares outstanding of the registrant's Common Stock, as of
February 19, 1999 was 6,748,251.
DOCUMENTS INCORPORATED BY REFERENCE
Document of the Registrant Form 10-KSB Reference Location
None. N/A
<PAGE>
PART I
Item 1. Description of Business.
General
The Company has a limited history of operations. It was incorporated as
Allegiant Technologies Inc. on December 28, 1993, acquired SuperCard, a
multimedia software development tool, together with its customer franchise, from
Aldus Corporation on February 4, 1994, and thereafter developed for sale various
product upgrades and ancillary software products. The Company incurred
substantial start up, development and other expenses in excess of revenues,
which resulted in cumulative net losses exceeding $5 million. The Company's
revenues were substantially derived from the sale of SuperCard and to a much
lesser extent the sale of ancillary software products, all for the Macintosh
platform.
The Company's results of operations were adversely impacted by the following
factors: (1) the Company was not able to secure adequate financing to complete
new product under development, including a Windows version of SuperCard, and to
maintain effective marketing strategies, (2) the Company's existing products
were sold into a market segment that had experienced significant sales declines,
and (3) the decline in sales of Macintosh computers and related Macintosh
software in general particularly in 1995 and 1996. As a consequence of these
factors the Company was forced to cease operations, change management and
undertake a reorganization of its capital.
On May 31, 1998 the Company disposed of its technology assets to an arms length
purchaser. The proceeds from the sale were used to settle certain obligations of
the Company. On July 21, 1998 the Company changed its name from Allegiant
Technologies Inc. to Shampan, Lamport Holdings Limited. Presently, management is
exploring and intends to enter into as of yet undetermined new lines of
business, which may be highly speculative. The Company will remain dormant until
additional financing is secured and such new operations are determined.
RISK FACTORS
This report contains forward-looking statements. Actual results of operations
may vary from such forward-looking statements for reasons, which include those
set forth below.
Liquidity and Capital Resources
The Company has sustained substantial operating losses and has used substantial
amounts of working capital in its operations to December 31, 1998. As of
December 31, 1998 the Company had cash equivalents of $10,776 and a working
capital deficit of $246,582. Total liabilities exceeded the book value of total
assets by $246,582.
The Company's ability to satisfy its liabilities and meet its obligations as
they become due is dependent upon its ability to secure additional funding
through public or private sales of securities, including equity securities of
the Company and there are no assurances that the Company will be successful in
securing additional funding. As a consequence, there exists a risk that the
Company will be forced to seek protection from its creditors under federal or
state bankruptcy statutes.
Future Operations
Management is exploring and intends to enter into as yet undetermined new lines
of business, which may be highly speculative ventures and which may not be
profitable.
Item 2. Description of Property.
Item 2 is not applicable
Item 3. Legal Proceedings.
Item 3 is not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Item 4 is not applicable
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market for Common Equity
The Company's Common Stock is traded on the OTC Bulletin Board under the symbol
"SLHX", and has been so traded since July 21, 1998, after giving effect to a
four for one share reverse split. It previously traded on the OTC Bulletin Board
under the symbol "ALGT".
The Company's Common Stock is also traded on the Vancouver Stock Exchange under
the symbol "SLL.U" and has been so traded since July 21, 1998, after giving
effect to a four for one share reverse split. It previously traded on the
Vancouver Stock Exchange under the symbol "AGH.U".
The following table sets forth the high and low prices per share of the
Company's Common Stock on the OTC Bulletin Board for all fiscal quarters since
January 1, 1997. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions and
have been adjusted, where appropriate, to reflect the four for one share reverse
split.
Quarter
Ended High Low
March 31, 1997* $2.00 $1.12
June 30, 1997* $1.00 $0.48
September 30, 1997* $0.64 $0.24
December 31, 1997* $0.60 $0.12
March 31, 1998* $0.24 $0.08
June 30, 1998* $0.36 $0.16
September 30, 1998* $0.28 $0.07
December 31, 1998 $0.30 $0.01
* adjusted for a four for one share reverse split that was made effective
July 21, 1998.
The following table sets forth the high and low prices per share of the
Company's Common Stock on the Vancouver Stock Exchange for all fiscal quarters
since January 1, 1997. They have been adjusted, where appropriate, to reflect
the four for one share reverse split.
Quarter
Ended High Low
March 31, 1997* $1.80 $1.16
June 30, 1997* $1.60 $0.32
September 30, 1997* $0.40 $0.12
December 31, 1997* $0.96 $0.12
March 31, 1998* $0.28 $0.16
June 30, 1998* $0.28 $0.16
September 30, 1998* $0.20 $0.20
December 31, 1998 $0.20 $0.09
* adjusted for a four for one share reverse split that was made effective
July 21, 1998.
On February 19, 1999, the last reported bid and ask prices of the Common Stock
on the OTC Bulletin Board and on the Vancouver Stock Exchange were as follows:
Bid Ask
OTC Bulletin Board $n/a $n/a
Vancouver Stock Exchange $0.10 $0.25
As at December 31, 1998 there were approximately 50 holders of record of the
Company's Common Stock.
<PAGE>
Dividends
The Company has not paid any dividends on its Common Stock since its inception.
The payment of future cash dividends will depend on such factors as earnings
levels, anticipated capital requirements, the operating and financial condition
of the Company and other factors deemed relevant by the Board of Directors.
Sales of Unregistered Securities
Sales of unregistered securities, by the Company, during the year ended December
31, 1998 are as follows:
<TABLE>
<CAPTION>
Date Securities
Of Issuance Identity Sold(1) Consideration Exemption
<S> <C> <C> <C> <C>
January 15, 1998 Investors 1,400,000 shares of $210,000 Section 4(2)
(2 persons) common stock and
warrants to purchase
1,400,000 shares of
common stock
January 15, 1998 Creditor 300,000 shares of $ 45,000 Regulation S
(1 person) common stock Debt Settlement
January 15, 1998 Creditors 3,300,000 shares of $495,000 Section 4(2)
(5 persons) common stock and Debt Settlement
warrants to purchase
283,333 shares of
common stock
May 28, 1998 Creditor 150,000 shares of Finance Fee Section 4(2)
(1 person) common stock $50,000 loan
(1) The number of shares and warrants issued have been adjusted to reflect a
four for one share split that was made effective July 21, 1998. Each
warrant entitles the holder to purchase on common share of the Company at a
purchase price of $0.1725 until October 15, 1999.
</TABLE>
Item 6. Management's Discussion and Analysis and Plan of Operations.
This section contains forward-looking statements regarding the Company's
business and financial condition. No assurance can be given that actual results
of operations will not differ materially from the forward-looking statements
contained herein. See "Business-Risk Factors."
Overview
The Company has a limited history of operations and no history of profitability.
As at December 31, 1998 the Company had cumulative net losses of $5,157,747.
During the 1998 year the Company was forced to cease operations, sell its
technology assets and commence a capital reorganization. Presently, management
is exploring and intends to enter into as of yet undetermined new lines of
business, which may be highly speculative. The Company will remain dormant until
additional financing is secured and such new operations are determined.
See Notes to the Financial Statements for a description of the Company's
significant accounting policies.
Liquidity and Capital Resources
The Company has sustained substantial operating losses and has used substantial
amounts of working capital in its operations to December 31, 1998. As of
December 31, 1998 the Company had cash equivalents of $10,776 and a working
capital deficit of $246,582. Total liabilities exceeded the book value of total
assets by $246,582.
The Company's ability to satisfy its liabilities and meet its obligations as
they become due is dependent upon its ability to secure additional funding
through public or private sales of securities, including equity securities of
the Company and there are no assurances that the Company will be successful in
securing additional funding. As a consequence, there exists a risk that the
Company will be forced to seek protection from its creditors under federal or
state bankruptcy statutes.
<PAGE>
Capital Reorganization
During the year the Company completed the following reorganization of its
capital:
1. Principals of the Company surrendered for cancellation 162,500 and
337,500 escrowed shares of common stock in the 1997 and 1998 years respectively.
(2,000,000 pre-split shares in the aggregate)
2. The Company completed a for a four for one reverse split of its common
stock and a change of its name from Allegiant Technologies Inc. to Shampan,
Lamport Holdings Limited.
3. The Company issued 3,600,000 shares of common stock at a deemed price of
$0.15 per share, post reverse split, and non-transferable warrants to purchase
283,333 shares of common stock, at $0.1725 per share until October 15, 1999, in
full settlement and satisfaction of debts of the Company amounting to $540,000.
4. The Company issued 1,400,000 Units at $0.15 per Unit, post reverse
split, for aggregate proceeds of $210,000. Each Unit consisted of one share of
common stock and one non-transferable warrant to purchase one additional share
of common stock at $0.1725 per share until October 15, 1999. The proceeds of the
private placement were primarily used to fund the settlement of trade debts of
the Company.
5. The Company sold its technology assets and product inventory for
$40,000. The proceeds were used to fund the settlement of trade debts of the
Company.
6. The Company borrowed $50,000 from a director of the Company. The
proceeds were used to fund certain ongoing obligations of the Company.
7. The Company negotiated new terms of payment on an outstanding secured
promissory note in the amount of $100,000, which was in default as a result of
the Company having failed to make timely interest payments.
Results of Operations
The following table sets forth, for the periods indicated, certain operating
data as a percentage of net revenue.
<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>
Revenue:
Net product sales 100% 100%
Service fees and royalty income - -
----------------------------
100 100
Net revenue
Cost of revenue 42 29
----------------------------
Gross Profit 58 71
----------------------------
Expenses:
Sales and marketing 49 40
Research and development 39 3
General and administrative 100 194
Amortization of purchased intangibles 11 -
----------------------------
199 237
----------------------------
Loss from Operations (141) (166)
Other Income (Expense)
Interest income (expense), net (5) (21)
Finance Fee - (24)
Write-off of intangibles (34) -
Gain (Loss) on disposal of property and equipment (7) 8
Gain on settlement of debts 86 11
----------------------------
Net loss (101)% (192)%
=============================
</TABLE>
<PAGE>
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
The Company ceased operations and sold its product inventory and technology
assets on May 31, 1998 for $40,000. The proceeds from the sale were used to
settle certain indebtedness of the Company. It also reorganized its capital as
previously disclosed and borrowed the additional sum of $50,000 from a director
so that it could meet certain obligations during the year. A finance fee,
consisting of 150,000 shares of common stock valued at $15,000, was paid in
connection with the receipt of the loan.
Revenues were substantially generated from the sale of SuperCard. The Company
did not have the requisite capital to maintain sales and marketing staff
throughout 1997 and 1998 or to undertake an effective marketing campaign and as
a consequence sales declined precipitously. As a further consequence, the
Company was not able to continue product development, which was necessary if it
were to continue with the business as a going concern.
General and administrative expenses consist primarily of the costs of the
Company's finance and administrative personnel, including the chief executive
officer, rent, telephone and utilities and all costs associated with maintaining
a public company in good standing. General and administrative expenses decreased
from $585,319 in 1997 to $123,116 in 1998. The decrease in general and
administrative expenses is attributable primarily to a reduction in staffing and
the closure of the San Diego office. It is expected that they will decrease
further but will remain the Company's largest expenditure until such time the
Company acquires or commences a new line of business.
In 1997 and 1998 the Company was able to reach agreements and settle certain
trade debts and employee claims for amounts less than their face value. These
agreements resulted in a gain on settlement of debts of $494,658 in 1997 and
$7,113 in 1998.
Uncertainty due to the YEAR 2000 Issue
The Year 2000 Issue arises because many computerized systems use two digits
rather than four digits to identify a year. Date-sensitive systems may
incorrectly recognize the year 2000 as some other date, resulting in errors. The
effects of the Year 2000 Issue may be experienced before, on or after January 1,
2000 and, if not addressed, the impact on operations and financial reporting may
range from minor errors to significant systems failure, which could affect an
entity's ability to conduct normal business operations. The Company is presently
dormant. For this reason, and until a new line of business is established
management believes that the Year 2000 Issue will not materially affect the
Company. However, it is not possible to be certain that all aspects of the Year
2000 Issue affecting the Company, including those related to the efforts of
customers, suppliers or other third parties, will be fully resolved.
Item 7. Financial Statements.
The Financial Statements of the Company identified in the Index to Financial
Statements appearing under "Item 13". Exhibits and Reports on Form 8-K of this
report are incorporated by reference to Item 13.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
Item 8 is not applicable
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.
The following individuals are the Directors and executive officers of the
Company. Pertinent information relating to these individuals is set forth below.
There are no family relationships between any of the Directors and officers.
The following table sets forth certain information concerning the executive
officers and directors of the Company.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Steven A. Rothstein(1).......................... 48 President, Chief Executive Officer and Director
William D. McCartney(1)......................... 43 Director
Craig Gould(1).................................. 29 Director
Robert H. Daskal .............................. 57 Chief Financial Officer
Leonard Petersen ............................... 44 Secretary
- --------------------
(1) Member of the Audit Committee
</TABLE>
Mr. Rothstein has served has Chairman of the Board of Directors and Chief
Executive Officer of the Company since October 31, 1997. He has served as
Chairman of the Board of Directors and Chief Executive Officer of Olympic
Cascade Financial Corp. since its inception in February 1997. He became a member
of the Board of National Securities Corporation in May 1995 and was appointed
Chairman on August 1, 1995. From 1979 through 1989, Mr. Rothstein was registered
representative, and Limited Partner at Bear Steams & Co., Chicago, Illinois and
Los Angeles, California. From 1989 to 1992, Mr. was a Senior Vice President in
the Chicago office of Oppenheimer and Company, Inc. In December 1992 he joined
Rodman and Renshaw, Inc., a Chicago-based broker-dealer serving as Managing
Director, and joined H.J. Meyers, Inc. in Beverly Hills, California, a New York
Stock Exchange member firm in March 1994. He resigned from H.J. Meyers and
Company in 1995 to associate with National Securities Corporation. Mr. Rothstein
is a 1972 graduate of Brown University, Providence, Rhode Island. Presently, Mr.
Rothstein is a board member of Gateway Data Sciences, Inc., SigmaTron
International, Inc. and Vita Food Products, Inc.
Mr. Gould has served as a Director of the Company since October 31, 1997. From
1995 to the present, he has been a Vice President Corporate Finance of National
Securities Corporation. Prior to 1995, Mr. Gould was a finance consultant at
Merrill, Lynch, Pierce, Fenner and Smith, Inc. He has a B.A. degree from the
University of Wisconsin.
Mr. McCartney has served as a Director of the Company since January, 1994. He
served as Chief Financial Officer and Secretary of the Company from January 1994
to October 31, 1997. From 1990 to the present, he has been the President of
Pemcorp Management Inc., which provides corporate finance services to public and
private companies. Mr. McCartney is a chartered accountant in the Province of
British Columbia, Canada and has a bachelors degree in business from Simon
Fraser University.
Mr. Daskal has served as Chief Financial Officer of the Company since October
21, 1998. He has served as Senior Vice President, Chief Financial Officer and
Treasurer of Olympic Cascade Financial Corp. since its inception in February,
1997. From 1994 to 1997 Mr. Daskal was a Director, Executive Vice President and
Chief Financial Officer of Inco Homes Corporation, and from 1985 to 1994 he was
a Dire Executive Vice President-Finance and Chief Financial Officer of UDC
Homes, Inc. (and its predecessors). UDC Homes, Inc. filed a petition for relief
under Chapter 11 of the Bankruptcy Code in May, 1995. Mr. Daskal, is a former
Tax Partner with Arthur Andersen & Co., became a CPA in Illinois in 1967,
received his B.B.A. and J.D. from the University of Michigan in Ann Arbor. Mr.
Daskal is presently a director of Inco Homes Corporation.
Mr. Petersen was appointed Secretary of the Company on October 31, 1997. He was
a Director of the Company from February, 1994 to October 31, 1997. From 1990 to
the present, he has been a senior officer of Pemcorp Management Inc., which
provides corporate finance services to public and private companies. Mr.
Petersen has been a director of CVD Financial Corporation since May 1995 and of
Logan International Corp. since January 1994. Mr. Petersen is a chartered
accountant in the Province of British Columbia, Canada.
<PAGE>
Beneficial Ownership Reporting Compliance
Not applicable.
Item 10. Executive Compensation.
The following table sets forth all compensation awarded to, earned by, or paid
for services to the Company in all capacities during the fiscal years ended
December 31, 1996 and 1997 to the Company's chief executive officer. Except as
described below, no director or executive officer received total compensation in
respect of the 1997 or 1998 fiscal year exceeding $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Year Salary Other(1) Total
<S> <C> <C> <C> <C>
Steven A. Rothstein............................. 1998 nil $ 23,000 $ 23,000
President, C.E.O., Director
from November 1 to
December 31, 1997 ............................. 1997 nil nil nil
Joel B. Staadecker 1997 $ 47,000 $ 17,100 $ 64,100
President, C.E.O., Director
to October 31, 1997 1996 $100,000 $ 22,800 $122,800
(1) Other compensation includes $6,000 in accrued management fees and $15,000 in
finance fees paid in connection with the granting of a loan to the Company.
</TABLE>
Directors' Compensation
The Company does not currently compensate its directors under any standard
arrangement, but are reimbursed for their out-of-pocket expenses in serving on
the Board of Directors.
The Company has entered into indemnification agreements with each of its
directors, which provide for indemnification of the directors by the Company to
the fullest extent permitted by Washington law.
Grants of Stock Options
No stock options were granted during the year and no options were outstanding as
of December 31, 1998.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information with respect to beneficial
ownership of Common Stock as of February 19, 1999, by (i) each person who is
known by the Company to beneficially own more than 5% of the outstanding shares
of Common Stock, (ii) each of the Company's directors, (iii) each of the
executive officers named in the Summary Compensation Table and (iv) all current
directors and executive officers as a group. Unless otherwise indicated in the
footnotes to the table, each person or entity has sole voting and investment
power with respect to all shares of Common Stock shown as beneficially owned by
such person or entity.
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Percentage of
Beneficially Outstanding
Name of Stockholder Owned Shares(1)
- ------------------- ------------ --------------
<S> <C> <C>
Steven A. Rothstein
Chief Executive Officer, Director
2737 Illinois Road
Chicago, Illinois............................... 1,550,000(2) 20.8%
Craig Gould
Director
1560-875 Michigan Ave.
Chicago Illinois................................ 905,555 13.4%
William D. McCartney
Director
1260-609 Granville Street
Vancouver, Canada............................... 386,250(3) 5.7%
Leonard Petersen
Secretary
1260-609 Granville Street
Vancouver, Canada............................... 386,250(4) 5.7%
Steven Rabinovici
48 Country Drive
Plainview, New York............................. 1,400,000(5) 18.8%
Robert H. Daskal
1560-875 Michigan Ave.
Chicago, Illinois............................... 905,555 13.4%
Mark Roth
2200-1001 Fourth Ave.
Seattle, Washington............................. 905,555 13.4%
Joel B. Staadecker
1-1091 Walkers Hook Road
Salt Spring Island, Canada..................... 498,750 7.4%
- -------------------------------------------------------------------------
All directors and executive
officers as group (4 persons)................... 3,833,610(6) 51.4%
(1)The percentages reflected in this column are based on the assumption that the
respective owner exercises any rights he or it has to purchase additional shares
of Common Stock within sixty days from the date hereof and excludes all other
shares of Common Stock reserved for issuance upon exercise of outstanding
warrants.
(2) Includes 850,000 shares of common stock and warrants to purchase an
additional 700,000 shares of common stock.
(3) Includes 300,000 shares held indirectly by a company jointly controlled by
Mr. McCartney and Mr. Petersen (further reference to these same shares is made
in note 4). The balance of shares are held indirectly by companies controlled by
Mr. McCartney.
(4) Includes 300,000 shares held indirectly by a company jointly controlled by
Mr. Petersen and Mr. McCartney (further reference to these same shares is made
in note 3). The balance of shares are held indirectly by companies controlled by
Mr. Petersen.
(5) Includes 700,000 shares of common stock and warrants to purchase an
additional 700,000 shares of common stock.
(6) Includes 3,133,610 shares of common stock and warrants to purchase an
additional 700,000 shares of common stock.
</TABLE>
<PAGE>
Item 12. Certain Relationships and Related Transactions.
Pemcorp Management Inc., a management advisory services company controlled by
Mr. McCartney and Mr. Petersen, was paid $36,000 for services rendered and
$15,000 for the use of office facilities during the year ended December 31,
1998.
The Company has accrued management fees of $6,000 and $3,000 payable to Mr.
Rothstein, the Company's Chief Executive Officer, and to Mr. Daskal, the
Company's Chief Financial Officer, respectively.
The Company issued 150,000 shares of common stock at a value of $0.10 per share
as a finance fee to Mr. Rothstein in connection with a $50,000 loan he made to
the Company.
The Company accrued interest payable in the amount of $13,333 on outstanding
notes payable to Mr. Rothstein.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Index to Financial Statements. Page
Independent Auditor's Report
Balance Sheet at December 31, 1997 and 1998
Statements of Operations For the Years Ended December 31, 1997 and 1998.
Statement of Shareholders' Equity For the Period from December 31, 1996
through December 31, 1998
Statements of Cash Flows For the Years Ended December 31, 1997 and 1998.
Notes to Financial Statements
All schedules are omitted because the required information is not present
in amounts sufficient to require submission of the schedules or because
the information is included in the financial statements and notes
thereto.
(b) Exhibits.
(c) Reports on Form 8-K.
not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SHAMPAN, LAMPORT HOLDINGS LIMITED
Date: March 8, 1999 By: /s/ Steven A. Rothstein
Steven A. Rothstein
President and Director
(Chief Executive Officer)
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.
/s/ Steven A. Rothstein March 8, 1999
Steven A. Rothstein
President and Director
(Chief Executive Officer)
/s/ Steven A. Rothstein March 8, 1999
Robert H. Daskal
Chief Financial Officer
/s/ William D. McCartney March 8, 1999
William D. McCartney
Director
/s/ Craig Gould March 8, 1999
Craig Gould
Director
<PAGE>
FINANCIAL STATEMENTS
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
Years Ended December 31, 1998 and 1997
with Independent Auditor's Report
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Shampan, Lamport Holdings Limited (formerly Allegiant Technologies Inc.)
We have audited the balance sheets of Shampan, Lamport Holdings Limited as of
December 31, 1998 and 1997, and the related statements of operations, retained
earnings, and cash flows for the years then ended. 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
in the United States. The results of the audit would not be materially different
had the audit been conducted in accordance with generally accepted auditing
standards in Canada. However, in the United States, reporting standards for
auditors require the addition of an explanatory paragraph when financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as those described in
Note 1 to these financial statements. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from 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 financial statements referred to above present fairly, in
all material respects, the financial position of Shampan, Lamport Holdings
Limited as of December 31, 1998 and 1997, and the results of its operations and
cash flows for the years then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that Shampan,
Lamport Holdings Limited will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has sustained substantial operating
losses since inception and has a working capital deficit of approximately
$246,000 at December 31, 1998. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. The 1998 financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classifications of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.
/s/Moss Adams LLP
Seattle, Washington
February 12, 1999
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
BALANCE SHEETS
(Expressed in United States Dollars)
AS OF DECEMBER 31
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
ASSETS
Current assets:
Cash $ 35,245 $ 10,776
Accounts receivable, net of allowance for
doubtful accounts of $10,062 in 1997 12,642 -
Inventories 38,146 -
----------------- ---------------
Total current assets 86,033 10,776
Property and equipment, net 16,639 -
----------------- ---------------
$ 102,672 $ 10,776
================ ===============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Notes payable to shareholder $ 100,000 $ 150,000
Note payable 65,000 42,500
Accounts payable 62,074 31,522
Accrued liabilities 17,105 33,336
----------------- ----------------
Total current liabilities 244,179 257,358
Share subscriptions payable 750,000 -
----------------- ----------------
994,179 257,358
----------------- ----------------
Shareholders' deficit:
Preferred stock, 50,000,000 shares authorized,
$0.01 par value, none issued or outstanding - -
Common stock, 100,000,000 shares authorized,
$0.01 par value, 1,935,752 and 6,748,252 issued
and outstanding, in 1997 and 1998, respectively 19,357 67,482
Additional paid-in capital 4,126,808 4,843,683
Accumulated deficit (5,037,672) (5,157,747)
---------------- ---------------
(891,507) (246,582)
---------------- ---------------
$ 102,672 $ 10,776
================ ===============
</TABLE>
See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
NET REVENUE $ 585,266 $ 62,541
COST OF REVENUE 249,092 18,415
------------- -----------
GROSS PROFIT 336,174 44,126
------------- -----------
EXPENSES
Sales and marketing 287,386 24,837
Research and development 231,260 -
General and administrative 585,319 123,116
Amortisation of purchased intangibles 62,298 -
------------- -----------
1,166,263 147,953
------------- -----------
LOSS FROM OPERATIONS (830,089) (103,827)
OTHER INCOME (EXPENSE)
Interest income 239 -
Interest expense (28,188) (13,333)
Finance fee - (15,000)
Write-off of intangibles (197,293) -
Gain (loss) on disposal of property and equipment (38,346) 4,972
------------- -----------
LOSS BEFORE EXTRAORDINARY ITEM (1,093,877) (127,188)
EXTRAORDINARY ITEM, gain on settlement of obligations 494,658 7,113
------------- -----------
NET LOSS $ (599,019) $ (120,075)
============= ===========
BASIC LOSS PER SHARE $ (0.38) $ (0.02)
============= ===========
SHARES USED IN COMPUTING PER SHARE AMOUNTS 1,577,704 6,459,348
============= ===========
</TABLE>
See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
STATEMENT OF SHAREHOLDERS' DEFICIT
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Total
Common Stock Additional Accumulated Shareholders'
Shares Amount Paid-in Deficit Deficit
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1996 2,026,823 $ 20,268 $ 4,025,897 $ (4,438,653) $ (392,488)
Shares issued - cash 71,428 714 99,286 - 100,000
Shares cancelled (162,500) (1,625) 1,625 - -
Net loss - - - (599,019) (599,019)
--------- -------- ------------- ------------ ---------
Balance at December 31, 1997 1,935,751 19,357 4,126,808 (5,037,672) (891,507)
Shares issued - subscription
settlement 5,000,000 50,000 700,000 - 750,000
Shares cancelled (337,500) (3,375) 3,375 - -
Shares issued - bonus 150,000 1,500 13,500 - 15,000
Net loss - - - (120,075) (120,075)
---------- -------- ------------- ------------ ----------
Balances at December 31, 1998 6,748,251 $ 67,482 $ 4,843,683 $ (5,157,747) $ (246,582)
========= ======== ============= ============ ==========
</TABLE>
See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED (formerly Allegiant Technologies Inc.)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (599,019) $ (120,075)
Adjustments to reconcile net loss to net cash from operating activities
Amortisation and depreciation 126,523 -
Write-off of intangibles 197,293 -
(Gain) loss on disposal of property and equipment 38,346 (4,972)
Extraordinary gain on settlement of obligations (494,650) (7,113)
Accounts payable settled with share subscriptions 90,000 -
Finance fee paid in common stock - 15,000
Changes in operating assets and liabilities
Accounts receivable 24,442 12,642
Inventories 162,057 38,146
Prepaid expenses and other 80,829 -
Accounts payable and accrued liabilities (121,327) (7,208)
Deferred revenues (34,563) -
------------- ---------
(530,069) (73,580)
------------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property and equipment 62,738 21,611
------------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 100,000 -
Proceeds from share subscriptions 210,000 -
Proceeds from issuance of notes payable 100,000 50,000
Payments on notes payable (16,534) (22,500)
Payment on debentures payable (7,500) -
------------- ---------
385,966 27,500
------------- ---------
Change in cash and cash equivalents (81,365) (24,469)
Cash and cash equivalents, beginning of year 116,610 35,245
------------- ---------
Cash and cash equivalents, end of year $ 35,245 $ 10,776
============= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 20,188 $ -
============= =========
Share subscription issued for settlement of debentures $ 450,000
=============
Note payable issued for settlement of debentures $ 42,500
=============
Common stock issued for settlement of share subscriptions $ 750,000
=========
</TABLE>
See accompanying notes.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Company was incorporated in Washington State, U.S.A. on December 28, 1993
and changed its name from Allegiant Technologies Inc. to Shampan, Lamport
Holdings Limited effective July 21, 1998.
The Company discontinued its principal line of business, developing, marketing
and supporting interactive multimedia development software during 1997. The
Company has settled various obligations recognising an extraordinary gain on
settlement of $494,658 ($0.31 per share) in 1997 and $7,113 (less than $0.01 per
share) in 1998. On May 31, 1998 the Company disposed of its remaining inventory
and technology assets.
Management Plans on Continued Existence
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, in the United States, which
contemplates the continuation of the Company as a going concern. However, the
Company sustained substantial operating losses and used substantial amounts of
working capital in its prior operations. As of December 31, 1998, current
liabilities exceeded current assets by $246,582.
Management is exploring and intends to enter into as yet undetermined new lines
of business, which may be highly speculative. The Company will remain dormant
until additional financing is secured and such new operations are determined.
The Company's ability to continue as a going concern is dependent upon, among
other things, its ability to secure additional funding which is not assured. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Inventories
Inventories consisted primarily of software media, manuals and related packing
materials. Inventories were valued at standard cost, which approximated the
lower of cost, determined on a first-in, first-out basis, or market.
Property and Equipment
Property and equipment were recorded at cost. Depreciation was provided over the
estimated useful lives ranging from three to seven years using the straight-line
method.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Intangible Assets
Intangible assets were recorded at cost. Amortisation was provided over the
estimated useful lives of five years using the straight-line method. Management
evaluated the future realization of intangible assets quarterly and wrote down
any amounts that management deemed unlikely to be recovered through future
product sales. The unamortised balance of $197,293 was charged to expense during
1997.
Advertising Costs
Advertising costs are expensed as incurred. Included in sales and marketing
expense are advertising costs of $55,924 and in 1997. There were no advertising
costs in 1998.
Revenue Recognition
Prior to the Company being dormant, revenue was derived from product sales and
licenses, maintenance contracts and consulting, training and other services.
Revenues from product sales and licenses were recognized upon shipment of the
products. Revenue from software maintenance contracts was recognized on a
straight-line basis over the term of the contract, generally one year. Revenue
from consulting, training and other services were recognized in the period in
which services were performed and earned in accordance with the respective
agreements. To the extent that an engagement was projected to be completed at a
loss, a provision for the full amount of the loss was provided at that time.
The Company entered into agreements whereby it licensed products or provided
customers the right to multiple copies. Such agreements generally provided for
non-refundable fixed fees which are recognized at delivery of the product master
or the first copy. Per copy royalties in excess of the fixed minimum amounts and
refundable license fees were recognized as revenue when such amounts were
reported to the Company and no longer refundable.
Stock Options
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its employee stock options. Under APB 25, because the exercise
price of the Company's employee stock options equals, or is greater than, the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.
Stock Split
In July 1998, outstanding shares of common stock were reverse split
one-for-four. All share and per share amounts have been restated.
Earnings Per Share
During 1997 the Company adopted Statement of Financial Accounting Standard
(SFAS) No. 128. "Earnings Per Share". Under SFAS No. 128 basic earnings per
share (EPS) of common stock is calculated based upon the weighted average number
of common stock outstanding. The computation of diluted EPS is similar to the
computation of basic EPS except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
dilutive potential common shares had been issued. As the Company recorded losses
in 1997 and 1998 there were no dilutive potential common shares.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
United States Generally Accepted Accounting Principles
Accounting under United States and Canadian generally accepted accounting
principles is substantially the same with respect to the accounting principles
used by the Company in the preparation of these financial statements.
Reclassifications - Certain reclassifications have been made to the 1997
financial statements to conform with the 1998 presentation. These
reclassifications have no effect on the financial position or operating results
of the Company.
2. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
Property and equipment at December 31 consists of:
Furniture and fixtures $ 6,639 $ -
Office equipment 15,998 -
Computer equipment 37,035 -
---------- ----------
59,672 -
Accumulated depreciation (43,033) -
---------- ----------
$ 16,639 $ -
========== ==========
</TABLE>
3. INTANGIBLE ASSETS
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
Intangible assets at December 31 consist of:
Acquisition costs $ 498,000 $ -
Royalty buyout 100,000 -
--------- ----------
598,000 -
Accumulated amortisation (400,707) -
Write-off of unamortised balance (197,293) -
--------- ----------
$ - $ -
========= ==========
</TABLE>
Acquisition costs include goodwill, product technology and related acquisition
costs.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
4. NOTES PAYABLE
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
Notepayable to Shareholder - On February 13, 1997 the Company issued a note
payable in connection with a proposed private placement of debt securities in
the amount of $750,000. The Company was advanced the sum of $100,000 under the
Note. The Note is secured by the assets of the Company and bore interest at the
First National Bank & Trust Company of Chicago prime rate plus 2% per annum,
which was payable quarterly commencing on July 15, 1997. The holder of the Note
subsequently agreed to accrue interest at the fixed rate of 10% per annum
commencing January 1, 1998 and defer payment of interest and the principal
amount of the Note until the later of May 1, 1999 or the date on which the
holder demands payment. $ 100,000 $ 100,000
Note payable to Shareholder - On May 1, 1998, the Company issued a note payable
in connection with the receipt of $50,000. The Note is unsecured and bears
interest at the fixed rate of 10% per annum. The principal amount of the note
together with accrued interest is due and payable on the later of May 1, 1999
and the date on which the holder demands payment. - 50,000
--------- ----------
$ 100,000 $ 150,000
========= ==========
Note payable, due November 4, 1998. The note is unsecured, non-interest bearing
and currently in default. $ 42,500 $ 42,500
Notes payable paid in full in 1998. 22,500 -
--------- ----------
$ 65,000 $ 42,500
========= ==========
</TABLE>
5. SUBSCRIPTIONS PAYABLE
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
On October 15, 1997, the Company received proceeds from a private placement of
1,400,000 Units at $0.15 each. Each Unit consists of one share of common stock
and one two year non-transferrable warrant to purchase on additional share of
common stock at $0.15 per share during the first year and at $0.1725 per share
during the second year, on a post reverse split basis. $ 210,000 $ -
The Company agreed to issue 3,600,000 shares of common stock at a deemed price
of $0.15 per share and two year non-transferable warrants to purchase an
additional 283,333 shares of common stock, at $0.15 per share in the first year
and at $0.1725 per share in the second year, in full settlement and satisfaction
of certain debts of the Company. 540,000 -
--------- ----------
$ 750,000 $ -
</TABLE>
The afore-mentioned shares of the Company's common stock were issued in January,
1998.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
6. INCOME TAXES
Significant components of the Company's deferred tax assets as of December 31,
1997 and 1998, respectively, are shown below. A valuation allowance has been
recognized to offset the deferred tax assets as realization of such assets is
uncertain.
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 1,935,000 $ 2,007,000
Research and development credits 157,000 157,000
Other - net 30,000 26,000
----------- -----------
Total deferred tax assets 2,122,000 2,190,000
Valuation allowance for deferred tax assets (2,122,000) (2,190,000)
----------- ------------
$ - $ -
=========== ============
</TABLE>
At December 31, 1998, the Company has federal and California tax net operating
loss carryforwards of approximately $5.1 million and $4.4 million, respectively.
The Company also has federal and California research credit carryforwards of
approximately $114,000 and $64,000, respectively. The federal tax loss
carryforward and the research credit carryforwards will begin expiring in 2009
unless previously utilized. The California tax loss carryforward will begin
expiring in 2002 unless previously utilized.
In accordance with certain provisions of the Internal Revenue Code, a change in
ownership of a corporation of greater than 50 percent within a three-year period
will place an annual limitation on the corporation's ability to utilize its
existing tax loss and tax credit carryforwards.
7. CAPITAL STOCK
Performance shares
Included in issued and outstanding common shares at December 31, 1997 are
337,500 performance shares, which would have been released from escrow on the
basis of 1 share for every $0.52 Cdn of pre-tax cash earned by the Company on a
cumulative basis. In March 1998, the holders of these shares surrendered them
for cancellation. These shares are not included in the determination of loss per
share.
Stock options
The Company established a stock option plan ("the Plan") to grant options to
purchase common stock to employees, officers, non-employee directors of the
Company and certain other individuals. The Plan authorizes the Company to issue
or grant stock options to purchase up to 629,475 shares of its common stock as
of December 31, 1998.
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
7. CAPITAL STOCK (Continued)
Stock options
A summary of the Company's stock option activity, and related information for
the years ended December 31, 1997 and 1998 is as follows:
Weighted
Average
Exercise
Options Price
Outstanding at December 31, 1996 481,875 $ 3.00
Granted - -
Cancelled (481,875) 3.00
-------- ------
Outstanding at December 31, 1997 and 1998 -
========
Pro forma information regarding net loss is required to be disclosed in
accordance with SFAS No. 123, and has been determined as if the Company has
accounted for its employee stock options under the fair value method prescribed
in that Statement. The fair value of these options was estimated at the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions for 1997; risk free interest rate of 5% to 6%, dividend
yield of 0%, and a weighted-average life of the options of 5 years.
For purposes of pro forma disclosures, the estimated fair value of the options
is amortised to expense over the vesting period of the related options. The
Company's pro forma information follows:
1997 1998
Pro forma net loss $ 589,995 $ 120,075
Pro forma loss per share $ 0.37 $ 0.02
Warrants
As of December 31, 1998, the Company has outstanding warrants entitling the
holders to purchase a total of 1,754,761 common shares of the Company as
follows:
Number Exercise
of Shares Price Expiration Date
71,428 $ 1.60 April 15, 1999
1,683,333 0.1725 October 15, 1999
---------
1,754,761
=========
<PAGE>
SHAMPAN, LAMPORT HOLDINGS LIMITED
(formerly Allegiant Technologies Inc.)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 1998
8. RELATED PARTY TRANSACTIONS
During the years ended December 31, 1997 and 1998, the Company paid or accrued,
the following amounts to related parties:
1997 1998
Management fees $ 45,000 $ 45,000
Rent - 15,000
Interest 8,000 13,333
Finance fee - 15,000
--------- ---------
$ 53,000 $ 88,333
========= =========
Notes payable to a shareholder are $100,000 and $150,000 at December 31, 1997
and 1998, respectively.
Included in accrued liabilities at December 31, 1998 is $21,333 of accrued
interest due to a director of the Company.
9. GEOGRAPHIC INFORMATION
Substantially all the Company's operations, employees and assets were located in
the United States during 1997. At December 31, 1998, all of the Company's
operations and assets are currently located in Canada.
1997 1998
Sales by geographical region
Japan $ 27,350 $ -
Europe 93,378 -
Other 36,604 -
--------- ---------
Total export sales 157,332 -
United States 427,934 62,541
--------- ---------
Net sales $ 585,266 $ 62,541
========= =========
10. YEAR 2000 ISSUE
Management has completed a review of the Company's systems, and believes, given
the dormant nature of the Company, that any costs to be incurred to ensure its
systems are Year 2000 compliant will not be significant.
Because of the unprecedented nature of the Year 2000 Issue, its effects will not
be fully determinable until the year 2000 and thereafter. Management cannot
assure that the Company is or will be Year 2000 ready, that new business lines,
if any, will be Year 2000 ready, or that parties with whom the Company does
business will be Year 2000 ready.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND THE STATEMENT OF OPERATIONS ATTACHED AS AN EXHIBIT TO THE COMPANY'S
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1998, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 10,776
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,776
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,776
<CURRENT-LIABILITIES> 257,358
<BONDS> 0
0
0
<COMMON> 4,911,165<F1>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 62,541
<TOTAL-REVENUES> 62,541
<CGS> 18,415
<TOTAL-COSTS> 18,415
<OTHER-EXPENSES> 147,953
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,333
<INCOME-PRETAX> (117,160)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (2,915)<F2>
<CHANGES> 0
<NET-INCOME> (120,075)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.01)
<FN>
<F1>This includes amounts paid in excess of par value.
<F2>This includes gain on the sale of PP&E of $4,972, gain on settlement
of obligations of $7,113 and financing expense $15,000.
</FN>
</TABLE>
