U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
-----------------
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________to________________
Commission File Number: 0-23835
-------
HOMESEEKERS.COM, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0397464
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
2241 Park Place, Suite E, Minden, NV 89423-8602
-----------------------------------------------
(Address of Principal executive offices)
Issuer's telephone number, including area code: (775) 782-2977
--------------
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_____
---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 11,894,528 shares as of January
31, 1999.
1
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HOMESEEKERS.COM, INC.
Form 10-QSB for the quarter ended December 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS AND INFORMATION REQUIRED IN REPORT
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<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements: Page
----
Consolidated, Condensed Balance Sheets as of
December 31, 1998 and June 30, 1998 3
Consolidated, Condensed Statements of Operations
for the three months and six months ended
December 31, 1998 and 1997 5
Consolidated, Condensed Statements of Cash Flows for
the six months ended December 31, 1998 and 1997 6
Notes to the Consolidated, condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II Other Information
Item 1 Legal Proceedings 13
Item 2 Changes in Securities and Use of Proceeds 13
Item 3 Defaults upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
2
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HOMESEEKERS.COM, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
---- ----
<S> <C> <C>
ASSETS
Current Assets
Cash $ 221,453 $ 198,410
Accounts receivable, net of allowance for uncollectible
accounts of $4,413 2,323,058 54,883
Accounts receivable, related parties 87,137 193,289
Note receivable from employee 50,000 -0-
Inventories -0- 16,712
Prepaid expenses 47,700 13,120
------------ ------------
Total Current Assets 2,729,348 476,414
Investments, related party stock, net of valuation
allowance of $700,000 as of 12/31/98 and 6/30/98 -0- -0-
Property and equipment, net 546,888 490,575
Goodwill, net of accumulated amortization of $395,495
as of 12/31/98 and $317,701 as of 6/30/98 493,915 361,359
Other assets 578,769 570,145
------------ ------------
Total Assets $ 4,348,920 $ 1,898,493
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 652,440 $ 323,918
Accrued liabilities 477,941 292,970
Note payable 27,698 29,698
Notes payable - related parties 558,595 31,595
Deferred revenue 3,134,114 1,147,654
----------- -----------
Total Current Liabilities 4,850,788 1,825,835
----------- -----------
</TABLE>
See notes to consolidated, condensed financial statements.
3
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HOMESEEKERS.COM, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
---- ----
<S> <C> <C>
Long-Term Liabilities
Note Payable 250,000 -0-
Convertible Debt 30,000 140,000
------------- --------------
Total Long-Term Liabilities 280,000 140,000
------------- --------------
Stockholders' Deficit
Series A convertible preferred stock, $0.001 par
value, 5,000,000 shares authorized; 657,000
shares and 692,000 shares issued and outstanding
at December 31, 1998 and at June 30, 1998, respectively 657 692
Common stock; $.001 par value, 50,000,000 shares
authorized; 7,924,329 shares and 7,460,703
shares issued and outstanding at December 31,
1998 and at June 30, 1998, respectively 7,924 7,461
Additional paid in capital 11,991,313 11,112,776
Dividends on Series A convertible preferred stock (161,933) (118,725)
Accumulated deficit (11,919,829) (10,369,546)
Unrealized loss on securities (700,000) (700,000)
------------- --------------
Total Stockholders' Deficit (781,868) (67,342)
------------- --------------
Total Liabilities and Stockholders'
Deficit $ 4,348,920 $ 1,898,493
============= ==============
</TABLE>
See notes to consolidated, condensed financial statements.
4
<PAGE>
HOMESEEKERS.COM, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
Revenues: 1998 1997 1998 1997
----- ---- ----- ----
<S> <C> <C> <C> <C>
Web Sites and Web Pages $ 253,778 $ 114,799 $ 428,230 $ 190,411
Prospect Revenues 651,299 254,316 656,031 254,316
Advertising 56,299 46,790 189,605 98,640
Programming, Support and License Fees (1) 93,255 3,781 134,823 25,305
Other 12,979 13,108 33,531 28,268
------------- ------------ ------------ ------------
Total Revenues 1,067,610 432,794 1,442,220 596,940
Cost of Sales 132,696 50,817 216,575 104,429
------------- ------------ ------------ ------------
Gross Profit 934,914 381,977 1,225,645 492,511
Operating Expenses 1,532,264 1,002,040 2,779,635 1,685,935
------------- ------------ ------------ ------------
Net Loss from Operations (597,350) (620,063) (1,553,990) (1,193,424)
Other Income (Expense)
Interest expense (15,408) (43,195) (21,412) (90,677)
Other 25,455 742 25,120 410
------------- ------------ ------------ ------------
Loss Before Provision for Income Taxes (587,303) (662,516) (1,550,282) (1,283,691)
Provision for Income Taxes -0- -0- -0- -0-
------------- ------------ ------------ ------------
Net Loss (587,303) (662,516) (1,550,282) (1,283,691)
Other Comprehensive Income, Net of Tax:
Increase in market value of marketable securities -0- 330,775 -0- 330,775
------------- ------------ ------------ ------------
Net Comprehensive Loss $ (587,303) $ (331,741) $(1,550,282) $ (952,916)
============= ============ ============ ============
Basic and Diluted Net Loss per Common $ (.08) $ (.12) $ (.22) $ (.26)
============= ============ ============ ============
Shares Used in Computing Basic and
Diluted Share Data 7,852,662 5,789,022 7,726,043 5,334,075
============= ============ ============ ============
</TABLE>
(1) Programing, Support and License Sales include net sales to related parties
of $48,955 and $11,700 for the six months ending December 31, 1998 and
1997, respectively.
See notes to consolidated, condensed financial statements.
5
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HOMESEEKERS.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1997
----------- ----------
<S> <C> <C>
Cash Flows From Operating Activities
Net Loss $(1,550,282) $(1,283,691)
---------- ----------
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 186,065 138,230
(Gain) loss on asset sales (53,544) -0-
Allocated loss on investments 555 -0-
Common stock issued for employee compensation 27,407 46,779
Common stock issued for interest 587 35,658
Changes in assets and liabilities net of effect from
purchase of Genstar
Accounts receivable (2,162,909) 11,735
Inventories 16,712 2,951
Prepaid expenses (34,580) (6,941)
Other assets (10,085) (1,094)
Accounts payable 328,522 106,982
Accrued liabilities 234,971 (138,244)
Deferred revenue 1,986,460 (211,550)
------------ -------------
Net adjustments 520,161 (15,494)
------------ -------------
Net Cash Used in Operating Activities (1,030,121) (1,299,185)
------------ -------------
Cash Flows From Investing Activities
Purchase of property and equipment (151,639) (70,550)
Proceeds from asset sales 57,040 -0-
Deposit refunds -0- 5,000
Payment of acquisition deposit -0- (100,000)
Issuance of note receivable (50,000) -0-
------------ -------------
Net Cash Used in
Investing Activities (144,599) (165,550)
------------ -------------
Cash Flows From Financing Activities
Principal payments on capital lease obligations -0- (12,259)
Proceeds from notes payable - related parties 535,000 128,000
Payments on notes payable - related parties (8,000) (138,000)
Proceeds from notes payable 250,000 250,000
Payments on notes payable (2,000) (28,210)
Net proceeds from sale of common stock 490,555 1,291,000
Deferred offering costs paid (67,792) -0-
------------ -------------
Net Cash Provided by Financing Activities 1,197,763 1,490,531
------------ -------------
Net Increase in Cash 23,043 25,796
Cash at Beginning of Period 198,410 32,222
------------ -------------
Cash at End of Period $ 221,453 $ 58,018
============ =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1998 1997
------------ ------------
Cash paid for interest $ 7,387 $ 62,144
============ ============
Cash paid for income taxes $ -0- $ -0-
============ ============
</TABLE>
See notes to consolidated, condensed financial statements.
6
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HOMESEEKERS.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31,
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
1998
- ----
During the six months ended December 31, 1998, accrued liabilities in the
amount of $50,000 were satisfied by the issuance of 20,000 shares of the
Company's common stock.
During the six months ended December 31, 1998, $110,000 of debt was
converted into 55,000 shares of the Company's common stock.
During the six months ended December 31, 1998, a stockholder converted
35,000 shares of Series A preferred stock into 70,000 shares of the Company's
common stock.
During the six months ended December 31, 1998, the Company paid accumulated
dividends on the converted shares of Series A preferred stock by the issuance of
20,290 shares of the Company's common stock.
During the six months ended December 31, 1998 50,000 shares of the
Company's common stock were issued to acquire certain assets of a company in a
purchase transaction valued at $225,000.
1997
- ----
During the six months ended December 31, 1997, the Company issued 18,237
shares of its common stock in exchange for goods and services.
Accrued interest in the amount of $77,267 was satisfied by the issuance of
22,659 shares of the Company's common stock.
During the six months ended December 31, 1997, 1,658,500 of debt was
converted into 829,250 shares of the Company's common stock.
During the quarter ended December 31, 1997, 45,000 shares of Series A
preferred stock were issued in exchange for satisfaction of a note payable in
the amount of $87,708.
During the quarter ended December 31, 1997, the Company reversed the
allowance on marketable securities recorded in the prior year in the amount of
$330,775 to reflect current market value prior to their sale. In addition, the
Company established a valuation allowance of $700,000 for certain marketable
securities during the quarter ended September 30, 1997 due to the inability to
establish a market value of the securities.
The Company deferred certain revenues in the amount of $291,667 during the
quarter ended September 30, 1997 due to collectibility issues.
7
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HOMESEEKERS.COM, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS
- --------------------------------
HomeSeekers.com, Incorporated (the "Company") is a leading provider of
online consumer real estate information on the Internet through its Web site at
homeseekers.com. The Company's Web site provides listings for approximately
670,000 homes constituting the second largest group of residential real estate
listings ("listings") on the Internet. Listings are obtained from various
multiple listing services and from realty firms. The Web site maintains listings
in 27 states and Mexico.
The Company also offers desktop software products used by real estate
professionals to manage information, contacts and listings.
The accompanying consolidated, condensed financial statements as of
December 31, 1998 and for the three months and six months ended December 31,
1998 and 1997 are unaudited. These financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") for interim
financial statements and in accordance with the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with GAAP have been condensed or omitted pursuant to such rules and regulations.
All adjustments that, in the opinion of management, are necessary for a fair
presentation of the results of operations for the interim periods have been made
and are of a recurring nature unless otherwise disclosed herein. The results of
operations for such interim periods are not necessarily indicative of results of
operations for a full year.
NOTE 2 - FINANCING REQUIREMENTS
- -------------------------------
In order to finance operations for the six months ending December 31,
1998, the Company raised $491,000 from the proceeds from the exercise of stock
warrants and options, and obtained loans totaling $785,000 at an average annual
interest rate of 13%. $535,000 of these loans were from related parties at
market rates of interest.
The Company has not yet generated revenues sufficient to cover operating
expenses and has funded its operations primarily through the issuance of equity
and debt. Accordingly, the Company's ability to accomplish its business strategy
and to ultimately achieve profitable operations is dependent upon its ability to
obtain additional financing and execute its business plan. During January 1999
the Company raised $12 million through the sale of common stock to accredited
investors pursuant to Rule 506 of Regulation D. This equity transaction is a
significant step to fund the Company's business plan. Ultimately, however, the
Company will need to achieve profitable operations in order to continue as a
going concern.
NOTE 3 - LIMITED LIABILITY COMPANY ("LLC")
- ------------------------------------------
On January 16, 1998 the Company formed a LLC with an unrelated company to
develop a new Internet Web site. The Company owns 50% of this LLC. The Company
accounts for this investment based on the equity method. Through December 31,
1998 there has been no activity in this LLC, therefore there has been no impact
on the earnings of the Company.
8
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HOMESEEKERS.COM, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - ACQUISITION OF GENSTAR MEDIA
- -------------------------------------
In order to enhance the Company's sale of Web sites to real estate agents,
on August 4, 1998, the Company acquired the customer list and certain other
assets of Genstar Media ("Genstar"), a recently formed company engaged in the
sale of Web sites to real estate agents. Genstar's customer list includes
approximately 1,600 Web site customers. In connection with this acquisition, the
Company engaged the principal officer and shareholder of Genstar, and certain of
its other employees, as employees of the Company. The purchase price for the
assets acquired was 50,000 shares of the Company's common stock valued at
$225,000 based on the current market value of the stock. The Company agreed to
issue additional shares having a market value of up to $200,000, based upon
revenues generated from the purchased assets. The Company also loaned the
sellers $50,000, the repayment of which is secured by the stock issued by the
Company.
This acquisition was accounted for by the purchase method and Genstar's
results of operations from August 5, 1998 on were included in the Company's
results of operations. The purchase price was allocated $14,650 to tangible
assets and $210,350 to goodwill. Goodwill is being amortized over five years.
Due to the recognition of Web site revenues over twelve months, the
Company's results of operations for the six months ended December 31, 1998 were
not materially affected by the acquisition of Genstar.
NOTE 5 - NOTES PAYABLE
- ----------------------
During the three months ended December 31, 1998 the Company borrowed
$445,000 from related parties and $50,000 from unrelated parties to fund
operations. Interest on the notes average 13% per annum. All but $5,000 of these
notes were paid in January 1999.
NOTE 6 - SUBSEQUENT EVENTS
- --------------------------
During January 1999, the Company raised $12 million through the sale of
common stock, netting the company approximately $10.6 million after deducting
commissions of approximately $1.2 million and other offering expenses. The
Company used $1.5 million of these proceeds to retire debt, accounts payable and
accrued liabilities. The balance of the proceeds will be used primarily for
working capital, for strategic business acquisitions and to fund increases in
sales and marketing operations.
During January 1999, as a condition of this equity transaction, holders of
95% of the outstanding Series A Convertible Preferred Stock ("Preferred Stock")
converted their shares into common stock of the Company. It is expected that the
balance of the Preferred Stock will be converted into common stock during the
quarter ending March 31, 1999.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
RESULTS OF OPERATIONS
COMPARISON OF THE SIX MONTHS ENDED DECEMBER 31, 1998 TO THE SIX MONTHS ENDED
DECEMBER 31, 1997.
Total revenues of $1,442,000 for the six months ended December 31, 1998
increased 142% or $845,000 over the same period in 1997 due to increased sales
of Web pages and Web sites to real estate agents; increased Internet prospect
sales, including $400,000 for Internet leads to one customer; increased
advertising revenues and increased custom programming revenues.
Cost of sales increased 108% from $104,000 for the six months ended December 31,
1997 to $217,000 for the six months ended December 31, 1998. This increase was
due primarily to increased MLS board royalties and Genstar Web Site third-party
hosting fees. The company has developed its internal Web site software since the
acquisition of Genstar Media in August 1998. This move is expected to increase
Genstar Web site gross margins starting in January 1999. MLS board royalties are
expected to increase in the future proportional to increases in Web Page
revenues.
Operating expenses of $2,780,000 for the six months ended December 31, 1998
represent an increase of $1,094,000, or 65% over the same period in 1997 due
primarily to increases in sales and marketing expenses and software programming
expenses. Beginning in January 1998 the Company has expanded dramatically the
channels through which it sells Web Sites and Web pages.
Interest expense of $21,000 during the six months ending December 31, 1998
reflects a decrease of 77% from the same period during 1997. This decrease
resulted primarily from the conversion of convertible debt into common stock.
The net loss for the six months ending December 31, 1998 of $1,550,000 or $(.22)
per share increased $597,000 from the net loss of $1,284,000 or $(.26) per share
for the corresponding six months in 1997. The increase in net loss was due
primarily to increases in sales and marketing expenses preceding increases in
corresponding revenues.
10
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 1998 TO THE THREE MONTHS ENDED
DECEMBER 31, 1997.
Total revenues of $1,068,000 for the three months ended December 31, 1998
increased 147% or $635,000 over the same period in 1997 due to increased sales
of Web pages and Web sites to real estate agents, increased Internet prospect
sales and custom programming revenues.
Cost of sales increased by 161% from $51,000 for the three months ended December
31, 1997 to $133,000 for the three months ended December 31, 1998. This increase
was due primarily to increased MLS board royalties and Genstar Web site
third-party hosting fees. The Company has developed its internal Web site
software since the acquisition of Genstar Media in August 1998. This move is
expected to increase Genstar Web site gross margins starting in January 1999.
MLS board royalties are expected to increase in the future proportional to
increases in Web Page revenues.
Operating expenses of $1,532,000 for the three months ended December 31, 1998
represent an increase of $530,000, or 53% over the same period in 1997 due
primarily to increases in sales and marketing expenses and software programming
expenses. Beginning in January 1998 the Company has expanded dramatically the
channels through which it sells Web Sites and Web pages.
Interest expense of $15,000 reflects a decrease of 65% from the 1997 $ 43,000
interest expense. This decrease resulted from the conversion of convertible debt
into common stock.
The Company spun off its FOCUS Publications business unit during November 1998,
resulting in a one-time net gain on sale of $26,000.
The net loss for the three months ending December 31, 1998 of $587,000 or $(.08)
per share decreased $76,000 from the net loss of $663,000 or $(.12) per share
for the corresponding three months in 1997. The decrease in net loss was due to
a higher rate of increase in revenues than in expenses.
LIQUIDITY AND CAPITAL RESOURCES
As reflected in the cash flow statements for the six months ending December 31,
1998 and 1997, the Company's operations have not generated sufficient cash flows
to meet the on-going cash needs of the Company. The Company has generated the
additional cash required to fund its operations through the proceeds from the
exercise of stock warrants and options.
During January 1999 the Company raised $12 million through the sale of common
stock to accredited investors pursuant to Rule 506 of Regulation D. This sale
netted the Company approximately $10.6 million in cash, after deducting
commissions of
11
<PAGE>
approximately $1.2 million and other offering expenses. The results of this
stock sale are not included in the accompanying financial statements.^
Net cash used in operations during the six months ending December 31, 1998 of
$1,030,000 was financed primarily from the proceeds from the exercise of stock
warrants and options of $491,000, and through additional loans totaling
$785,000. These loans were obtained from unrelated entities in the amount of
$250,000 and from related parties in the amount of $535,000. All loans pay
market rates of interest averaging 13% per annum. This compares to net cash used
in operations during the six months ending December 31, 1997 of $1,299,000. This
cash deficit was financed primarily from the sale of common stock, including
$192,000 for the exercise of stock warrants and options.
In October 1998 the Company entered into a technology alliance with an unrelated
entity whereby the Company shall receive payments totaling $2,000,000 through
November 1999. At December 1998 the Company has included $250,000 of these
amounts in revenues, $1,875,000 in accounts receivable and $1,750,000 in
deferred revenue.
Cash outflows from investing activities during the six months ending December
31, 1998 included $152,000 for the purchase of capital assets, primarily
computer equipment and software; and a $50,000 loan made to the owner of Genstar
Media upon the acquisition of this business. Cash inflows included $57,000 from
the sale of Focus publications business unit in November 1998.
Significant investment cash outflows during the six months ended December 31,
1997 included $71,000 for capital assets, primarily computer equipment, and the
payment of a $100,000 deposit for the purchase of a business.
IMPACT OF THE YEAR 2000 ON COMPUTER SYSTEMS
The Company has developed two software products, HS Passport and Realty 2000 Net
98. Realty 2000 Net 98 has been upgraded to be year 2000 compliant, and the
Company is currently in the process of upgrading HS Passport to be year 2000
compliant.
The Company's personal computers, network servers and purchased computer
software used to operate the business are all year 2000 compliant, due to the
recent purchase of, or upgrade to these software and hardware tools.
The Company is currently determining the extent to which it may be impacted by
customers' and vendors' failure to remedy their own year 2000 issues. At this
time, the Company has not found any material deficiencies in significant
vendor's and customer's computer operations. It has been determined that the
multiple listing services real estate listings that the Company pulls to its
homeseekers.com Internet site will not be materially affected by the year 2000
dating problem.
The Company does not anticipate that the financial impact of the year 2000
issues
12
<PAGE>
described above will have a material adverse effect on our business, financial
condition or results of operations.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities and Use of Proceeds
Information in response to the requirements of this Item is disclosed above, in
PART I, Item 2., under the Liquidity and Capital Resources section.
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
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned as duly authorized.
HomeSeekers.com, Inc.
(Registrant)
/s/ Greg Johnson /s/ Scott Berry
- ----------------------------- --------------------------
Greg Johnson Scott Berry
Chief Executive Officer Chief Financial Officer
Dated: February 5, 1999
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 221,453
<SECURITIES> 0
<RECEIVABLES> 2,414,608
<ALLOWANCES> 4,413
<INVENTORY> 0
<CURRENT-ASSETS> 2,729,348
<PP&E> 1,159,016
<DEPRECIATION> 612,128
<TOTAL-ASSETS> 4,348,920
<CURRENT-LIABILITIES> 4,850,788
<BONDS> 0
0
657
<COMMON> 7,924
<OTHER-SE> (790,449)
<TOTAL-LIABILITY-AND-EQUITY> 4,348,920
<SALES> 1,067,610
<TOTAL-REVENUES> 1,067,610
<CGS> 132,696
<TOTAL-COSTS> 1,532,264
<OTHER-EXPENSES> (25,455)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,408
<INCOME-PRETAX> (587,303)
<INCOME-TAX> 0
<INCOME-CONTINUING> (587,303)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (587,303)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
