U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: June 30, 1998
Commission File Number: 0-25388
DETOUR MAGAZINE, INC.
(Exact name of small business issuer as specified in its charter)
Colorado
(State or other jurisdiction of incorporation or organization)
84-1156459
(IRS Employer Identification No.)
6855 Santa Monica Boulevard
Suite 400
Los Angeles, California
(Address of principal executive offices)
90038
(Zip Code)
(213) 469-9444
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days: Yes
__X__ No ____.
The number of shares of the registrant's only class of common stock
issued and outstanding, as of June 30, 1998, was 15,202,665 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the six month period
ended June 30, 1998, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Company's unaudited financial statements and notes thereto
included herein. In connection with, and because it desires to
take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other
statement made by, or on the behalf of the Company, whether or not
in future filings with the Securities and Exchange Commission.
Forward looking statements are statements not based on historical
information and which relate to future operations, strategies,
financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward
looking statements.
Overview
Detour Magazine, Inc., f/k/a Ichi-Bon Investment Corporation
(the "Company"), was incorporated under the laws of the State of
Colorado on May 18, 1990. On June 6, 1997, pursuant to the terms
of an Agreement and Plan of Reorganization, the Company acquired
all of the issued and outstanding securities of Detour, Inc., a
California corporation, in exchange for 4,500,000 "restricted"
common shares of the Company. As a result, the Company was the
surviving entity. As part of the terms of the aforesaid
transaction, the Company amended its Articles of Incorporation,
changing its name to its present name.
Detour Magazine, Inc. is engaged in publishing of a monthly
magazine entitled Detour, which includes advertisements and
articles relating to fashion, contemporary music and entertainment
and social issues. Management describes the magazine as an "urban,
2
<PAGE>
avant-garde" publication. The Company maintains offices in both
Los Angeles, California and New York City.
The magazine is being published monthly, with the exception of
the issues for January/February and July/August, for which one
issue is published. The magazine has been, in general,
approximately 172 pages in length, comprised of about 44 to 73
pages of advertising, with the balance in editorial pages. This
reflects the limited, but growing, advertising base which typifies
new publications.
The following information is intended to highlight
developments in the Company's operations to present the results of
operations of the Company, to identify key trends affecting the
Company's businesses and to identify other factors affecting the
Company's results of operations for the six month periods ended
June 30, 1998 and 1997.
Results of Operations
Comparison of Results of Operations for the Six Month Periods
Ended June 30, 1998 and 1997
During the six month period ended June 30, 1998, the Company's
revenues remained relatively constant as compared to the similar
period in 1997, as the Company generated revenues of $2,039,390, as
compared to revenues of $2,019,568 for the six months ended June
30, 1997, an increase of $19,822 (approximately 1%). However, in
the six month period ended June 30, 1998, costs of sales rose
significantly to $1,566,455 from $1,062,318 in the six months ended
June 30, 1997, an increase of $504,137 (47.5%). In this regard,
printing costs escalated to $1,183,408 from $872,531, distribution
costs rose from $39,815 to $170,700 and editorial and photo
expenses increased from $149,972 to $212,347. This was due
primarily to the increase in print orders of the Company's magazine
(number of copies printed), caused by management's efforts to
expand circulation, which resulted in increased printing, paper and
distribution costs as a factor of such expansion. Further, while
these figures indicate an increase in costs during the six month
period ended June 30, 1998, during the six month period ended June
30, 1997 five issues of the Company's magazine were on-sale in the
applicable period in 1997, as opposed to six magazines during the
applicable period in 1998. Additional costs were incurred as a
result of additional newsstand and subscription copies printed.
Management anticipated these costs in the Company's budget, as the
Company is engaged in a program to increase visibility of the
Magazine, in order to increase revenues in the future. It is
management's belief that the increased costs associated with
various promotions will result in greater visibility and market
share in the future, with the Company incurring significant losses
during the promotional period. However, there can be no assurances
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<PAGE>
that the Company will generate greater revenues in the future as a
result of these additional marketing efforts.
Selling, general and administrative expenses also increased
significantly during the six month period ended June 30, 1998 to
$1,971,196, as compared to $1,241,835 for the six month period
ended June 30, 1997, as a result of numerous factors including (i)
in late 1997, the Company's new management assumed their respective
positions with the Company, which increased salaries by
approximately $236,000 during this period; (ii) the Company
incurred significant professional fees of approximately $273,000
over similar costs incurred in prior periods as a result of the
Company becoming a reporting company under the Securities Exchange
Act of 1934, as well as the Company's private placement offering
which commenced in November 1997; and (iii) increased newsstand
expense as a result of the Company's point of sale promotion,
wherein the Company attempted to increase recognition and
circulation of the Magazine. These costs were approximately
$144,000.
Management believes that its efforts to increase circulation
of the Company's magazine is beginning to show signs of success,
based upon numerous factors, including the fact that prior to the
six month period ended June 30, 1998, approximately 90% of the
Company's revenues were generated from advertising. In the six
month period ended June 30, 1998, revenues continued to increase,
but advertising accounted for only 81% of such revenue. While
there can be no assurances, management believes that the Company's
revenues should continue to increase over the foreseeable future as
a result of these efforts.
During the six month period ended June 30, 1998, interest
expense also rose in comparison to the similar period in 1997, as
a result of the Company's need to borrow additional working capital
from affiliates, from $73,333 in the six month period ended June
30, 1997, to $125,319 for the six month period ended June 30, 1998,
an increase of $51,986 (70.9%). See "Liquidity and Capital
Resources" below. As a result, the Company generated a net loss of
$(1,623,580) for the six month period ended June 30, 1998, compared
to a net loss of $(357,919) for the six month period ended June 30,
1997. It is anticipated that the Company will continue to incur
operating losses in the foreseeable future, until such time as the
Company is able to put new magazine acquisitions in place. There
can be no assurances that the Company will successfully consummate
new acquisitions, or, if so accomplished, that the new magazines
will allow the Company to generate profits from operations in the
future. See "Trends," below.
4
<PAGE>
Comparison of Results of Operations for the Three Month
Periods Ended June 30, 1998 and 1997
During the three month period ended June 30, 1998, the
Company's revenues decreased significantly, as it generated
revenues of $628,523, compared to revenues of $1,009,784 for the
similar period in 1997, a decrease of $381,261 (37.8%). This was
due to the fact that only two issues of the Company's Magazine were
published during the three month period ended June 30, 1998, as
opposed to three issues published in the applicable period in 1997.
In the three month period ended June 30, 1998, costs of sales
increased from $577,251 in 1997, to $768,217 for the three month
period ended June 30, 1998, an increase of $190,966 (24.8%). This
was due primarily to the reasons cited above in the discussion of
the comparison of the six month period applicable hereto. General
and administrative expenses were $869,525 for the three months
ended June 30, 1998, compared to $574,825 for the similar period in
1997, an increase of $294,700 (51.3%), also due to those reasons
described hereinabove. As a result, the Company generated a net
loss of $(1,089,151) for the three month period ended June 30,
1998, compared to a net loss of $(178,959) for the three month
period ended June 30, 1997.
Liquidity and Capital Resources
At the end of the three month period ended June 30, 1998, the
Company had $382 in cash and cash equivalents. It also decreased
its accounts receivable to $543,990 from $948,310 during the three
months beginning April 1, 1998, a decrease of $404,320 (42.6%),
which management attributes to subscription promotions not
completed. As a result in this latter change, the Company's
anticipated receipt of a significant refund from the US Postal
Service as a result of its conversion from 4th class postage to 2nd
class postage in the first quarter of 1998 is in question. The
funds to complete the subscription promotions were not available
due to the inability of the Company to raise all of the capital
necessary in its private offering described below.
The Company has outstanding notes payable to non-affiliates in
the aggregate amount of $325,336, including the following:
(i) A note in the principal amount of $90,000, which is due
upon demand and bears interest at the rate of 18%, payable
quarterly. This note is personally guaranteed by Ed Stein, an
officer, director and principal shareholder of the Company.
(ii) A note in the principal amount of $122,000, which bears
interest at the rate of 8% per annum. All principal and interest
on this note was due January 22, 1998, but the due date was
extended by mutual agreement until September 30, 1998. This note
is also personally guaranteed by Mr. Stein.
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(iii) Two notes which arose as part of the acquisition
consummated by the Company during the three month period ended
March 31, 1998 of Milton Magazine, including one note with an
outstanding principal balance of $98,336, which accrues interest at
prime rate plus 2% and which is to be repaid over a two year
period, with principal and interest payments escalating over the
life of the note, beginning with monthly payments of $3,164 and
escalating to $6,125, and a second note in the principal amount of
$15,000, which accrues no interest and is payable in monthly
payments of $5,000, which commenced in May 1998.
The remaining outstanding note payable to an unaffiliated
party in the principal amount of $932,313 arose out of a loan
originally due to an affiliated party. Relevant thereto, in 1995,
Mr. Stein loaned the Company $932,313 which bears interest at the
rate of 12% per annum and is due upon demand. The obligation is
secured by all of the assets of the Company. The note holder
agreed to subordinate this security position relevant to the
Company's accounts receivable factoring arrangement. This
stockholder subsequently assigned this Note to JCM Capital Corp.
As of the date of this report, the Company is making interest
payments on this obligation and is in discussions with this
creditor relating to repayment terms.
Mr. Stein has also loaned the Company the principal sum of
$1,414,442, which loan bears interest at the rate of 12% per annum,
calculated on the average monthly outstanding balance and which is
due upon demand. Applicable thereto, Mr. Stein has provided the
Company with a letter advising that he will abstain from demanding
any repayment on this obligation at least through December 31,
1998.
The Company presently factors its monthly domestic accounts
receivable with Riviera Financial, Inc., Los Angeles, California
("Riviera"). The majority of factoring provided by Riviera is on
a non-recourse basis. On average, the Company pays a fee to
Riviera of approximately 4.5% per month. Historically, the Company
factors approximately $3 million per annum in accounts receivable
with Riviera. Riviera's maximum fee for factoring the Company's
receivables is 9% per month, with a hold back of 11% on each
invoice until receipt of funds. Therefore, Riviera is only
factoring 89% of the Company's total eligible domestic advertising
receivables. In addition, Riviera also acts in the capacity of
credit manager for the Magazine by performing credit checks,
mailing invoices, making collection calls and posting receivables.
It is anticipated that, provided the Company successfully raises
additional capital in the near future, of which there can be no
assurance, the factoring relationship with Riviera will be
terminated, as management believes that it will no longer be
necessary due to sufficient cash then available to the Company.
6
<PAGE>
Management has undertaken a plan of expansion and in order to
effectuate the same, has recognized the Company's need for
additional operating capital. In response thereto, in November
1997 the Company commenced a private offering of its common stock
wherein it is offered up to 4,700,000 shares of the Company's
common stock (post forward split) at a price of $.75 per share, for
aggregate gross proceeds of up to $3,525,000. In April 1998, this
offering closed with the Company receiving gross proceeds of
$765,000 from the sale of 1,020,000 common shares. In management's
view, the funds generated from this offering have not been
sufficient to meet the Company's needs for additional working
capital in order to allow the Company to fully implement its
expanded business plan. Numerous scenarios are presently being
explored by management, including discussions with investment
banking firms who have expressed an interest in working with the
Company to raise additional equity capital. However, as of the
date of this report, no definitive arrangements have been made
between the Company and any third party wherein such third party
has agreed to raise additional capital for the Company and, while
management is optimistic that it will be successful in this regard,
there are no assurances that any additional funds will be raised.
Failure of the Company to raise additional funds, either debt or
equity, will have a significant negative impact on the Company's
ability to generate profitable operations.
Trends
Management believes that the Company will continue to operate
the Company's business at a loss for the foreseeable future, but is
optimistic that the Company will begin generating profits from its
operations beginning in the year 2000, and possibly earlier if
sufficient working capital discussed in Liquidity and Capital
Resources, above, is raised. This will occur as a result of
increased circulation of Detour Magazine and new acquisitions of
existing unaffiliated magazines, of which there can be no
assurance. The new magazine acquisitions will allow the current
management team to spread its cost over the new titles. The
current back office structure can add two to six additional
magazines without adding any additional personnel. However, there
can be no assurances that the Company will become profitable within
the time parameters described herein, or at all.
Inflation
Although the operations of the Company are influenced by
general economic conditions, the Company does not believe that
inflation had a material affect on the results of operations during
the six month period ended June 30, 1998.
7
<PAGE>
Year 2000 Disclosure
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000. As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue. The Company presently owns
approximately $80,000 worth of computers. It utilizes outside
contractors for the bulk of its computer work. These consultants
have advised the Company that they have made all necessary
revisions to their software to avoid any potential problems arising
in the year 2000. Relevant to the Company's computers, management
is in the process of retaining outside computer consultants to
assist the Company in insuring that its computers will not fail in
2000. However, as of the date of this report, the Company does not
have available a definitive cost applicable to any service to be
undertaken on its computer software to avoid any problems in this
regard. While no assurances can be provided, management believes
that such cost will not be material to the Company.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
None.
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<TABLE>
DETOUR MAGAZINE, INC.
CONDENSED BALANCE SHEET
<CAPTION>
(unaudited) (unaudited) (audited)
For the Six For the Six For the
Month Period Month Period Fiscal Year
Ended Ended Ended
June 30, June 30, December 31,
1998 1997 1997
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS:
CURRENT ASSETS
Cash $ 382 $ 97,089 $ 11,089
Accounts receivable 543,990 292,542 399,580
Loan receivable-officers 0 0 0
Prepaid expenses and
other current assets 280,072 21,395 61,079
---------- ---------- ----------
Total Current Assets 824,444 411,026 471,748
---------- ---------- ----------
PROPERTY AND EQUIPMENT, Net 131,385 139,296 132,591
---------- ---------- ----------
OTHER ASSETS
Other 100,000 0 0
Security Deposits 13,750 20,750 13,750
---------- ---------- ----------
Total Other Assets 113,750 20,750 13,750
---------- ---------- ----------
TOTAL ASSETS $1,069,579 $ 571,072 $ 618,089
========== ========== ==========
LIABILITIES AND EQUITY:
CURRENT LIABILITIES
Accounts payable and
accrued expenses $1,212,066 $ 939,723 $ 929,394
Unexpired subscriptions 497,693 25,664 192,057
Note payable 325,336 176,700 372,000
Note payable stockholders 932,313 982,448 932,313
Interest payable stockholders 252,929 152,580 208,960
---------- ---------- ----------
Total Current Liabilities 3,220,337 2,277,115 2,634,724
---------- ---------- ----------
OTHER LIABILITIES
Due to stockholder 1,414,442 0 609,976
Interest payable 84,871 0 34,871
---------- ---------- ----------
Total Other Liabilities 1,499,313 0 644,847
---------- ---------- ----------
Total Liabilities 4,719,650 2,277,115 3,279,571
---------- ---------- ----------
9
<PAGE>
<CAPTION>
(unaudited) (unaudited) (audited)
For the Six For the Six For the
Month Period Month Period Fiscal Year
Ended Ended Ended
June 30, June 30, December 31,
1998 1997 1997
---------- ---------- ----------
<S> <C> <C> <C>
EQUITY
Common stock 11,216 9,366 10,369
Additional paid-in capital 1,669,212 855,161 1,035,068
Accumulated deficit (5,330,499) (2,570,570) (3,706,919)
---------- ---------- ----------
TOTAL EQUITY (3,650,071) (1,706,043) (2,661,482)
---------- ---------- ----------
TOTAL LIABILITIES
AND EQUITY $1,069,579 $ 571,072 $ 618,089
========== ========== ==========
</TABLE>
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<TABLE>
DETOUR MAGAZINE, INC.
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months For the Three Months
Ended June 30, Ended June 30,
------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SALES $ 2,039,390 $ 2,019,568 $ 628,523 $ 1,009,784
COST OF SALES 1,566,455 1,062,318 768,217 577,251
----------- ----------- ----------- -----------
GROSS PROFIT 472,935 957,250 (139,694) 432,533
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,971,196 1,241,835 869,525 574,825
----------- ----------- ----------- -----------
OPERATING LOSS (1,498,261) (284,585) (1,009,219) (142,292)
Interest expense (125,319) (73,333) (79,932) (36,667)
----------- ----------- ----------- -----------
NET LOSS $(1,623,580) $ (357,919) $(1,089,151) $ (178,959)
=========== =========== =========== ===========
LOSS PER SHARE OF
COMMON STOCK $ (0.02)
=======================================================
</TABLE>
11
<PAGE>
<TABLE>
DETOUR MAGAZINE, INC.
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
<CAPTION>
For the Six Months
Ended June 30,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(1,623,580) $ (357,919)
----------- -----------
Depreciation 17,820 19,123
Increase in accounts receivable (144,410) (118,463)
Decrease (increase) in prepaid
expenses and other current assets (107,657) 14,153
Increase in accounts payable
and accrued expenses 282,672 438,972
Increase in deferred revenue 305,636 0
Increase in interest payable,
stockholder 93,969 73,333
----------- -----------
TOTAL ADJUSTMENTS (448,030) 427,118
----------- -----------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (1,175,550) 69,199
----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of fixed assets (16,614) (9,534)
Loan to officer 0 52,241
Purchase of of assets (198,000) 0
----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES (214,614) 42,707
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in note payable (60,000) (13,300)
Proceeds from stockholder 804,466 21,545
Proceeds from issuance of stock 634,991 0
----------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 1,379,457 8,245
----------- -----------
NET INCREASE IN CASH (10,707) 120,151
CASH - beginning 11,089 (23,062)
----------- -----------
CASH - ending $ 382 $ 97,089
=========== ===========
</TABLE>
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DETOUR MAGAZINE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Six Month Period Ended June 30, 1998
1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been
prepared in accordance with the instructions for Form 10-QSB
and do not include all of the information and footnotes
required by generally accepted accounting principles for
complete financial statements. In the opinion of management,
all adjustments, consisting only of normal recurring
adjustments considered necessary for a fair presentation,
have been included. Operating results for any quarter are
not necessarily indicative of the results for any other
quarter or for the full year.
2. Basis of Presentation
Business combination
On June 6, 1997, pursuant to the terms of an Agreement and
Plan of Reorganization, Ichi-Bon Investment Corporation
("IBI") acquired all of the outstanding common stock of
Detour, Inc. ("Old Detour") in exchange for 4,500,000
unregistered shares of IBI's common stock. As a result
of the transaction, the former shareholders of Old Detour
received shares representing an aggregate of 90% of IBI's
outstanding common stock, resulting in a change in control of
IBI. As a result of the merger, IBI was the surviving entity
and Old Detour ceased to exist. Simultaneously therewith,
IBI amended its articles of incorporation to reflect a change
in IBI's name to "Detour Magazine, Inc." References to the
"Company" or "Detour" refer to Detour Magazine, Inc. together
with the predecessor company, Old Detour.
The acquisition of Old Detour has been accounted for as a
reverse acquisition. Under the accounting rules for a reverse
acquisition, Old Detour is considered the acquiring entity.
As a result, historical financial information for periods
prior to the date of the transaction are those of Old Detour.
Under purchase method accounting, balances and results of
operations of Old Detour will be included in the accompanying
financial statements from the date of the transaction, June 6,
1997. The Company recorded the assets and liabilities
(excluding intangibles) at their historical cost basis which
was deemed to be approximate fair market value. The reverse
acquisition is treated as a non-cash transaction except to the
extent of cash acquired, since all consideration given was in
the form of stock.
Earnings per share
Earnings per share have been computed based on the weighted
average number of common shares outstanding. For the nine
month period prior to the reverse acquisition discussed in
the business combination section of Note 2 above, the number
of common shares outstanding used in computing earnings per
share is the number of common shares outstanding as a result
of such reverse acquisition (5,000,000 shares).
13
<PAGE>
3. History and Business Activity
Detour was originally incorporated as Ichi-Bon Investment
Corporation on May 18, 1990, under the laws of the State of
Colorado. The name was changed to Detour Magazine, Inc.
concurrent with the business combination described in Note 2.
Prior to such business combination, Detour had not engaged in
any operations or generated any revenue.
Old Detour was a publisher of a nationally distributed
magazine entitled "Detour" which is published monthly and
contains articles and pictorial displays on fashion, music
and social commentary.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
DETOUR MAGAZINE, INC.
(Registrant)
Dated: August 19, 1998
By: s/Barry Ross
--------------------------------
Barry Ross, Secretary
15
<PAGE>
DETOUR MAGAZINE, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended June 30, 1998
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . . 17
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 382
<SECURITIES> 0
<RECEIVABLES> 543,990
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 824,444
<PP&E> 131,385
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,069,579
<CURRENT-LIABILITIES> 3,220,337
<BONDS> 0
0
0
<COMMON> 11,216
<OTHER-SE> (3,661,287)
<TOTAL-LIABILITY-AND-EQUITY> 1,069,579
<SALES> 2,039,390
<TOTAL-REVENUES> 2,039,390
<CGS> 1,566,455
<TOTAL-COSTS> 1,566,455
<OTHER-EXPENSES> 1,971,196
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125,319
<INCOME-PRETAX> (1,623,580)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,623,580)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
