<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[] 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 0-25658
Kalan Gold Corporation
(Exact name of registrant as specified in its charter)
COLORADO 84-1357927
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
No. 60A, Jalan 19/3, 46300 Petaling Jaya, Selangor, Malaysia
(Address of principal executive offices)
011 603 756-5082
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the registrant (1) has 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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
<TABLE>
<S> <C>
Common stock, $.00001 par value 94,990,999
Class Number of shares outstanding at November 1, 1999
</TABLE>
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FORM 10-QSB
3RD QUARTER
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS *
Condensed consolidated balance sheet as at September 30, 1999 (Unaudited).................... 3
Condensed consolidated statement of operations for the three months ended
September 30, 1999 and September 30, 1998 and the nine month periods ended
September 30, 1999 and September 30, 1998 (Unaudited)........................................ 4
Condensed consolidated statements of cash flows for the nine months ended
September 30, 1999 and September 30, 1998 (Unaudited) ........................................ 5
Notes to condensed consolidated financial statements (Unaudited) ............................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................ 7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................................................... 11
ITEM 2. CHANGES IN SECURITIES................................................................ 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................................... 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE...................................................... 11
ITEM 5. OTHER INFORMATION.................................................................... 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................................... 11
SIGNATURES .................................................................................... 12
</TABLE>
* The accompanying financial statements are not covered by an independent
Certified Public Accountant's report.
2
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PART I. ITEM. 1. FINANCIAL INFORMATION
KALAN GOLD CORPORATION
Condensed Consolidated Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1999
-----------
<S> <C>
ASSETS $
CURRENT ASSETS
Cash and cash equivalents 3,382
Accounts receivable, net 962,998
Other accounts receivable 2,483,873
Inventories 6,750
-----------
Total current assets 3,457,003
FIXED ASSETS
Office and telecommunication equipment, net 528,121
INTANGIBLE ASSET
Goodwill on consolidation 534,917
-----------
Total Assets 4,520,041
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable 15,433
Other accounts payable 334,380
Accrued Interest / related party 34,578
Due to Directors / related party 553,190
Current portion of hire purchase payable 2,067
-----------
Total current liabilities 939,648
LONG TERM LIABILITIES
Hire purchase payable 124,453
-----------
Total liabilities 1,064,101
-----------
Minority Interest 744,327
SHAREHOLDERS' EQUITY
Preferred stock, $0.10 par value, 1,000,000 shares authorized, -
-0- shares issued and outstanding
Common stock, $.00001 par value, 100,000,000 shares
authorized, 94,990,999 shares issued and outstanding 2,319,587
Retained earnings 359,988
-----------
Total shareholders' equity 2,679,575
Cumulative translation adjustment 32,038
-----------
Total liabilities and shareholders' equity $4,520,041
===========
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
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KALAN GOLD CORPORATION
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
$ $ $ $
REVENUE :
Net Sales 467,990 208 1,170,746 183,630
Gain on disposal of assets - 2,909 41,522 117,279
----------- ----------- ----------- -----------
Total revenue 467,990 3,117 1,212,268 300,909
----------- ----------- ----------- -----------
COSTS AND EXPENSES :
Costs of sales 10,079 - 96,928 56,344
Sales and marketing 2,143 2,805 9,848 12,704
Depreciation and amortization 35,421 - 106,284 -
General administration 10,017 36,979 53,412 126,960
Interest - 363 34,578 1,193
Loss on disposal of investments - 947,368 - 1,128,947
----------- ----------- ----------- -----------
Total costs and expenses 57,660 987,515 301,050 1,326,148
----------- ----------- ----------- -----------
Income (loss) before minority interest
and income taxes 410,330 (984,398) 911,218 (1,025,239)
Minority interest 88,023 398,845 159,730 410,590
----------- ----------- ----------- -----------
Income(loss) before income taxes 322,307 (594,553) 751,488 (614,649)
Income taxes - - - -
----------- ----------- ----------- -----------
Net income (loss) before comprehensive income (loss) 322,307 (594,553) 751,488 (614,649)
Comprehensive income - translation adjustment - - 10,428 -
----------- ----------- ----------- -----------
Net income (loss) 322,307 (594,553) 761,916 (614,649)
----------- ----------- ----------- -----------
Net income (loss) per share - Basic $ * (0.08) $.01 $(0.08)
=========== =========== =========== ===========
Average number of common shares outstanding 94,990,999 7,290,999 65,990,999 7,260,110
=========== =========== =========== ===========
</TABLE>
* Less than $0.01 per share
See accompanying notes to condensed consolidated financial statements
4
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KALAN GOLD CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30
1999 1998
---------- ----------
<S> <C> <C>
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by (used in) operating activities $(53,644) (122,627)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of assets - (142,132)
Proceeds from sale of assets 79,881 -
Proceeds from sale of investment - 34,737
---------- ----------
Net cash provided by (used in) investing activities 79,881 (107,395)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
(Payments) / Proceeds from advances from directors (7,262) 270,234
Payments to hire purchase payable (15,930) (39,829)
---------- ----------
Net cash provided by (used in) financing activities (23,192) 230,405
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,045 383
Cash, beginning of period 337 112
---------- ----------
Cash, end of period $3,382 $495
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
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KALAN GOLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENT
SEPTEMBER 30, 1999
(UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statement includes
the accounts of Animated Electronic Industries Sdn. Bhd. ("AEI") and its
Malaysian subsidiary companies, Vistel (Malaysia) Sdn Bhd, and Perwimas
Telecommunications Sdn. Bhd. ("PTSB"). All significant intercompany accounts
and transactions have been eliminated in consolidation. As a result of the
reverse acquisition of Kalan Gold Corporation (the "Registrant") by AEI, AEI
became a wholly owned subsidiary of the Registrant. This acquisition has been
treated as a recapitalization of AEI with AEI as the acquiror (reverse
acquisition). The condensed consolidated financial statements are the
financial statements of AEI.
The unaudited condensed consolidated financial statements presented herein
have been prepared in accordance with the instructions to Form 10-QSB and do
not include all the information and note disclosures required by generally
accepted accounting principles for complete financial statements. The interim
condensed consolidated financial statements should be read in conjunction
with the Consolidated Financial Statements and Notes thereto for the year
ended December 31, 1998, included in the Company's Form 8-K filed with the
Securities and Exchange Commission on July 2, 1999.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The
results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the entire year.
The financial statement has been prepared on the basis that the Registrant is
a going concern. Financial data presented herein are unaudited, pursuant to
the rules and regulations of the Securities and Exchange Commission.
ACQUISITION
On April 20, 1999, the Registrant acquired 100% of the issued and outstanding
capital stock of AEI, a private Malaysian corporation, in exchange for
87,000,000 shares of the Registrant's common stock. Concurrent with the
acquisition of AEI, the Registrant has commenced operations in providing
multimedia communication services and the Registrant is no longer in the
development stage.
TRANSLATION OF CURRENCIES
The following exchange rates of Ringgit Malaysia (RM) into U.S. Dollars (USD)
were used in preparing the financial statements.
<TABLE>
<S> <C> <C> <C>
January 1, 1998 3.880 March 31, 1999 3.800
June 30, 1998 3.800 June 30, 1999 3.800
September 30, 1998 3.800 September 30, 1999 3.800
</TABLE>
6
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REVENUE RECOGNITION
Revenue represents the net invoiced value of goods sold or services provided,
production of multimedia programs, Intranet services, consulting fees, and
other income earned. The Registrant recognizes revenue in the period the
services are provided or earned by the Registrant.
RELATED PARTY TRANSACTIONS
As of September 30, 1999, the Registrant owed a Director $553,190 for
short-term cash advances made to the subsidiary of the Registrant for working
capital purposes. The total $553,190 owing to a director is unsecured, with
interest accruing at a rate of 12.50% per annum and has no fixed terms of
repayment and is recorded in the financial statements as "due to directors".
As of September 30, 1999, related accrued interest on the advances made by
the Director totaled $34,578 and is recorded in the financial statements as
accrued interest.
INVENTORIES
Inventories consisting primarily of telecommunication equipment and spare
parts are valued at the lower of cost or market value. In general, cost is
determined on a first-in first-out basis.
INCOME TAX
No income tax provision was made for all the periods as the Registrant
incurred a loss for the nine months period ended September 30, 1998. For the
nine months period ended September 30, 1999, no provision of income tax was
made on any profits earned, following a tax exemption order granted by the
Government of Malaysia to all individual and corporate taxpayers for the
entire fiscal year 1999.
EARNINGS PER SHARE
Net income per share is computed by dividing net income available to common
shareholders for the period by the weighted average number of shares of
common stock outstanding for the period.
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
THE FOLLOWING ANALYSIS OF THE OPERATIONS AND FINANCIAL CONDITION OF THE
REGISTRANT SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, OF THE REGISTRANT
CONTAINED ELSEWHERE IN THIS FORM 10-QSB.
OVERVIEW
Kalan Gold Corporation (the "Registrant") was incorporated under the laws of
the State of Colorado on September 19, 1985 as a gas exploration company
under the name Knight Natural Gas Inc. On January 1, 1993, the Registrant
entered into a development stage. The Registrant had no operations and
generated no revenue from 1989 until April 1999.
On April 20, 1999 the Registrant acquired all the capital stock of Animated
Electronic Industries Sdn. Bhd., a Malaysian corporation ("AEI"). The
Registrant issued a total of 87,000,000 shares to the shareholders of AEI and
certain advisors in connection with the transaction.
7
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The Registrant produces interactive multimedia content for its existing
customers consisting primarily of Malaysian corporations that operate their
own Local Area Networks (LANs) or Wide Area Networks (WANs). The Registrant
also proposes to market and deliver such multimedia content to residential
consumers through a wireless broadband network (VISIONET) that it is in the
process of deploying in the Central Region of West Malaysia.
The Registrant's current business plan is to devote its resources to the
expansion of the Registrant's existing business and the proposed launch of
VISIONET's test cell in the fourth quarter of 1999 to be followed by a full
implementation of multiple cells in the first quarter of 2000 in the Central
Region of West Malaysia.
COMPARISON OF THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1999 TO THE THREE
MONTH PERIOD ENDED SEPTEMBER 30, 1998
Net Sales
- ------------
Net sales was $467,990 for the three month period ended September 30, 1999 (the
"1999 Third Quarter") compared to $208 for the three month period ended
September 30, 1998 (the "1998 Third Quarter"). The increase in net sales in the
1999 Third Quarter as compared to the 1998 Third Quarter was primarily due to
income generated through the production of multimedia programs; design and
consulting services for website development and network engineering services;
and consulting fees for project management services. Two customers together
accounted for 60% of total revenue during the 1999 Third Quarter. No customer
accounted for more than 10% of total revenue during the 1998 Third Quarter.
Cost of Sales
- ----------------
Cost of sales of $10,079 was recorded in the 1999 Third Quarter. No cost of
sales was recorded in the 1998 Third Quarter. The increase in cost of sales
reflects the corresponding increase in net sales in 1999.
Total Operating Expenses
- -------------------------------
Total operating expenses which includes sales and marketing, depreciation and
amortization, general administration and interest expenses were $47,581 for
the 1999 Third Quarter compared to $40,147 in the 1998 Third Quarter. The
decrease was primarily attributable to a decrease in general administration
expenses from $36,979 in the 1998 Third Quarter to $10,017 in the 1999 Third
Quarter. No interest expense was recorded in the 1999 Third Quarter as
interest is charged on a semi-annual basis. Total operating expenses for the
1999 Third Quarter consisted of sales and marketing expenses totaling $2,143,
general administration expenses totaling $10,017, and depreciation and
amortization amounting to $35,421. Total operating expenses for the 1998
Third Quarter consisted of sales and marketing expenses totaling $2,805,
general administration expenses totaling $36,979, and interest expense of
$363.
Net Income (Loss)
- ------------------------
The Registrant recorded net income of $322,307 for the 1999 Third Quarter
compared to a net loss of $594,553 for the 1998 Third Quarter. The increase
in net income was primarily attributable to the absence of a loss on the
disposal of an investment that occured in the 1998 Third Quarter and to an
increase in net sales and a reduction in total operating expenses in the 1999
Third Quarter.
8
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COMPARISON OF THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1999 TO THE NINE MONTH
PERIOD ENDED SEPTEMBER 30, 1998
Net Sales
- -----------
Net sales increased from $183,630 for the nine month period ended September 30,
1998 (the "1998 Period") to $1,170,746 for the nine month period ended September
30, 1999 (the "1999 Period"), an increase of 537.6%. This increase was
attributable to income generated through the production of multimedia programs;
design and consulting services for website development and network engineering
services; and consulting fees for project management services.
Cost of Sales
- ----------------
Cost of sales increased from $56,344 in the 1998 Period to $96,928 in the 1999
Period, an increase of 72.0%. The increase in cost of sales was primarily due to
an increase in the cost of producing multimedia programs in the 1999 Period.
Total Operating Expenses
- --------------------------------
Total operating expenses which includes sales and marketing, depreciation and
amortization, general administration and interest expense increased 44.9%
from $140,857 in the 1998 Period to $204,122 in the 1999 Period. The increase
was primarily attributable to an increase in depreciation and amortization
and to a lesser extent an increase in interest expense. Total operating
expenses for the 1999 Period consisted of sales and marketing expenses
totaling $9,848, general administration expenses totaling $53,412,
depreciation and amortization amounting to $106,284 and interest expense of
$34,578. Total operating expenses for the 1998 Period consisted of sales and
marketing expenses totaling $12,704, general administration expenses totaling
$126,960, and interest expense of $1,193.
Net Income (Loss)
- ------------------------
The Registrant recorded net income of $761,916 for the 1999 Period compared
to a net loss of $614,649 for the 1998 Period. The increase in net income was
primarily attributable to the absence of a loss on the disposal of an
investment that was present in the 1998 Period, as well as to an increase in
revenue in the 1999 Second and Third Quarter.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, the Registrant had cash and cash equivalents of
$3,382 and working capital of $2,517,355. All operations were funded from
internally generated funds and working capital advanced by the principal
shareholder, director and officer of the Registrant.
For the nine months ended September 30, 1999, cash used in operating
activities of $53,644 was mainly due to the net increase in accounts
receivable of $962,886. Other accounts receivable totaling $2,483,873 as at
September 30, 1999, which relates to sales proceeds arising from the disposal
of investments and fixed assets, is expected to be reduced by approximately
45% before the end of the year. Adjustments will be made in the fourth
quarter of this year to reflect the payment received. The remaining 55% is
expected to be collected by June 30, 2000.
Cash received from investing activities was $79,881. This was primarily
attributable to the disposal of assets of the Registrant.
9
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The Registrant's working capital requirements for the remainder of 1999 will
be funded through internally generated funds. The Registrant expects to make
capital expenditures ranging from $10.0 million to $15.0 million during 2000
in connection with the official launch and build-out of VISIONET. The
Registrant intends to finance all or a portion of such capital expenditures
with additional debt or equity financing. There is, however, no assurance
that financing will be available or, if available, that it would be offered
to the Registrant on acceptable terms.
The Registrant will continuously evaluate financing available to it and may
decide to consider various modes of debt and/or equity financing.
YEAR 2000 COMPLIANCE
The Year 2000 issue (Y2K) is the result of computer programs written using
two digits rather than four digit to define the applicable year. Any of the
Company's computer and telecommunications programs that have date sensitive
software may recognize a date using "00" as the year 1900 instead of 2000.
This could result in system failure or miscalculations causing disruptions in
operations, including the ability to process transactions, send invoices or
engage in similar normal business activities.
The Registrant, with the help of outside specialists and consultants, has (i)
completed its assessment of potential Y2K issues in its non-information
systems (e.g. its multimedia content production and communications system),
as well as in those information systems that were not replaced by the new
enterprise wide system, and (ii) substantially completed the remediation and
testing of all systems. The Registrant has contingency plans for certain
applications in the event the Y2K readiness is delayed and is currently
developing contingency plans for certain other applications. The Registrant
also intends to continue testing and re-testing during the remainder of 1999.
The Registrant's evaluation of potential Y2K exposure related to key
suppliers and customers is also in process and will continue throughout 1999.
In this regard, the Registrant is considering a temporary shutdown of certain
sensitive multimedia production operations for a few days around the turn of
the millennium as an additional safeguard against the unexpected loss of
utilities service. The Registrant expects to schedule production to provide
for such temporary shutdowns.
Although the Registrant believes its key information and non-information
systems will be Y2K ready before the end of 1999, it cannot predict whether
it will find additional problems that would result in unplanned upgrades of
applications during the rest of 1999 or even after December 1999. As a result
of these uncertainties, the Registrant cannot predict the impact on its
financial condition, results of operations or cash flows resulting from Y2K
failures in systems that the Registrant directly or indirectly relies upon.
Should the Registrant's Y2K readiness plans not be successful or be delayed
beyond December 1999, the consequences to the Registrant could be far
reaching and material, including an inability to produce multimedia programs
and provide a continuous transmission service to VISIONET's subscribers,
which could lead to an indeterminate amount of lost revenue.
Although not anticipated, the most reasonably likely worst case scenario of
failure by the Registrant or its equipment suppliers or subscribers to become
Y2K ready would be a short-term slowdown or cessation of production of
multimedia programs and transmission service to subscribers in a timely
manner.
SAFE HARBOR STATEMENT
This Form 10-QSB and other reports filed by the Registrant from time to time
with the Securities and Exchange Commission, as well as the Registrant's
press releases, contain or may contain forward-looking statements and
information that are based upon beliefs of, and information currently
available to, the Registrant's management, as well as estimates and
assumptions made by the Registrant's management. Forward-looking statements
can be identified by the use of forward-looking terminology such as
"believes", "may", "should", "anticipates", "estimates", "expects", "future",
"intends", "plans" or the negative thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that could
cause actual results of the Registrant to vary materially from historical
results or from any future results expressed or implied in such
forward-looking statements. Such factors include, among others, the
following: general economic and business conditions in
10
<PAGE>
Malaysia, costs of capital equipment and the ability of the Registrant to
obtain funding for its capital expenditures. The Registrant does not
undertake to update, revise or correct any of the forward-looking information.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings of a material nature to which the Registrant is a
party were pending during the reporting period, and the Registrant
knows of no legal proceedings of a material nature pending or
threatened or judgments entered against any director or officer of the
Registrant in his or her capacity as such.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
None
ITEM 5. OTHER INFORMATION
On September 1, 1999, Mr. Ahmad Fauzi Zahari was elected Treasurer and
a Director of the Registrant to fill vacancies created by the
resignation of Michael Raisch from these positions in July 1999. Mr.
Zahari was also elected Chief Financial Officer of the Registrant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27* Financial Data Schedule
(b) Reports on Form 8-K:
On July 2, 1999 the Registrant filed a report on Form 8-K/A
pursuant to item 7 containing the financial statements required in
connection with the acquisition of the Registrant by AEI.
11
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KALAN GOLD CORPORATION
(Registrant)
DATE: November 10, 1999 BY : /S/ PATRICK SOON-HOCK LIM
President & Chief Executive Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM KALAN GOLD
CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND
THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,382
<SECURITIES> 0
<RECEIVABLES> 3,446,871
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,457,003
<PP&E> 942,491
<DEPRECIATION> 414,370
<TOTAL-ASSETS> 4,520,041
<CURRENT-LIABILITIES> 939,648
<BONDS> 0
0
0
<COMMON> 950
<OTHER-SE> 2,678,625
<TOTAL-LIABILITY-AND-EQUITY> 4,520,041
<SALES> 1,170,746
<TOTAL-REVENUES> 1,212,268
<CGS> 0
<TOTAL-COSTS> 266,472
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,758
<INCOME-PRETAX> 751,488
<INCOME-TAX> 0
<INCOME-CONTINUING> 751,488
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 751,488
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
