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 the quarterly period ended September 30, 1998 or
[_] 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 0-26548
Legal Research Center, Inc.
(Exact Name of Registrant as Specified in its Charter)
Minnesota 41-1680384
(State Or Other Jurisdiction (IRS Employer Identification No.)
Of Incorporation)
700 Midland Square Building, 331 Second Avenue So., Minneapolis, MN 55401
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 612/332-4950
Indicate by check mark 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 preceding 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)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
3,327,633 shares of Common Stock as of June 22, 1998
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements:
Consolidated Balance Sheets
September 30, 1998 and December 31, 1997 ...........................2
Consolidated Statements of Operations
Three Months Ended September 30, 1998 and 1997.......................3
Consolidated Statements of Stockholders' Equity ......................4
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1998 and 1997........................5
Notes to Consolidated Financial Statements ...........................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ...........................................6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.....................................................8
<PAGE>
PART I. FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
LEGAL RESEARCH CENTER, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
ASSETS 1998 1997
- --------------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents $ 405,571 $ 165,924
Accounts receivable 386,527 277,144
Note receivable 60,000 60,000
Other 17,395 43,399
----------- -----------
TOTAL CURRENT ASSETS 869,493 546,467
----------- -----------
FURNITUIRE AND EQUIPMENT 345,797 362,247
Less accumulated depreciation 290,133 245,632
----------- -----------
55,664 116,615
----------- -----------
OTHER ASSETS
Notes receivable, net of allowance 25,959 60,959
for doubtful accounts
Intangible assets 258,494 313,624
----------- -----------
284,453 374,583
----------- -----------
$ 1,209,610 $ 1,037,665
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Current Liabilities
Accounts payable $ 77,460 $ 57,411
Accrued expenses:
Compensation 58,677 48,899
Other 13,485 21,394
Client Advances 44,867 26,773
----------- -----------
TOTAL CURRENT LIABILITIES 194,489 154,477
----------- -----------
Long Term Liabilities
Convertable Notes $ 200,000
----------- -----------
TOTAL LONG TERM LIABILITIES $ 200,000 $ --
----------- -----------
Stockholders' Equity
Common stock, $0.01 par value; (authorized
20,000,000 shares; issued - 3,327,633) 33,276 33,276
Additional paid-in capital 6,870,007 6,870,007
Accumulated deficit (4,121,912) (4,053,845)
Notes receivable from officers and directors (1,966,250) (1,966,250)
----------- -----------
815,121 883,188
----------- -----------
$ 1,209,610 $ 1,037,665
=========== ===========
See Notes to Consolidated Financial Statements (unaudited)
<PAGE>
LEGAL RESEARCH CENTER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------------ ------------------------------
1998 1997 1998 1997
------------------------------ ------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES $ 684,531 $ 355,133 $ 1,579,084 $ 1,468,645
DIRECT OPERATING COSTS
Compensation and benefits 298,777 157,249 609,373 651,043
Other 15,033 55,529 122,738 232,523
----------- ----------- ----------- -----------
Total direct operating costs 313,810 212,778 732,111 883,566
----------- ----------- ----------- -----------
GROSS PROFIT 370,721 142,355 846,973 585,079
----------- ----------- ----------- -----------
OTHER OPERATING COSTS
Sales and marketing 175,022 165,824 654,364 617,736
General and administrative 93,477 211,569 261,930 688,992
----------- ----------- ----------- -----------
Total other operating costs 268,499 377,393 916,294 1,306,728
----------- ----------- ----------- -----------
PROFIT/LOSS FROM OPERATIONS 102,222 (235,038) (69,321) (721,649)
OTHER INCOME (EXPENSE)
Interest Income 4,669 6,031 8,964 24,994
Interest Expense (5,083) -- (7,711) --
----------- ----------- ----------- -----------
PROFIT/LOSS FROM CONTINUING OPERATIONS $ 101,808 $ (229,007) $ (68,068) $ (696,655)
=========== =========== =========== ===========
DISCONTINUED OPERATIONS
Loss from operations $ -- $ (105,000) $ -- $(1,124,525)
----------- ----------- ----------- -----------
NET PROFIT/LOSS $ 101,808 $ (334,007) $ (68,068) $(1,821,180)
=========== =========== =========== ===========
NET GAIN/LOSS PER COMMON SHARE
Continuing operations $ 0.04 $ (0.10) $ (0.03) $ (0.31)
Discontinued operations -- (0.05) -- (0.50)
$ 0.04 $ (0.15) $ (0.03) $ (0.81)
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON 2,287,633 2,257,633 2,287,633 2,257,633
=========== =========== =========== ===========
SHARES OUTSTANDING
</TABLE>
See Notes to Consolidated Financial Statements (unaudited)
<PAGE>
LEGAL RESEARCH CENTER, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional
------------------------- Paid-in Accumulated Notes
Shares Amount Capital Deficit Receivable Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1995 2,135,833 $ 21,358 $ 4,551,634 $ (332,288) $ -- $ 4,240,704
Issuance of stock to purchase
The Law Office, Inc. 121,800 1,218 242,382 -- -- 243,600
Issuance of stock options to
purchase The Law Office, Inc. -- -- 15,441 -- -- 15,441
Issuance of shares subject to a
stock subscription agreement 1,040,000 10,400 1,955,850 -- (1,966,250) --
Net loss -- -- -- (1,656,553) -- (1,656,553)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 1996 3,297,633 32,976 6,765,307 (1,988,841) (1,966,250) 2,843,192
Expiration on repurchase option
on common stock 30,000 300 104,700 -- -- 105,000
Net Loss -- -- -- (2,065,004) -- (2,065,004)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 1997 3,327,633 33,276 6,870,007 (4,053,845) (1,966,250) 883,188
Net Loss -- -- -- (68,067) -- (68,067)
-----------
BALANCE SEPTEMBER 30, 1998 3,327,633 $ 33,276 $ 6,870,007 $(4,121,912) $(1,966,250) $ 815,121
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements (unaudited)
<PAGE>
LEGAL RESEARCH CENTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
September 30
--------------------------------
1998 1997
--------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (68,068) $(1,487,173)
Adjustments to reconcile net loss to net
cash used by operating activities:
Loss on disposal of The Law Office, Inc. 612,008
Depreciation 59,840 52,258
Amortization and write-off of intangible assets and 55,130 128,219
capitalized development costs
Gain (loss) on disposal of furniture and equipment (2,088) 1,517
Change in assets and liabilities
Trade accounts receivable and unbilled services (109,383) 520,966
Other current assets 26,004 (23,797)
Accounts payable 20,049 (111,413)
Accrued expenses 1,869 (34,135)
Client advances 18,094 34,801
----------- -----------
Net cash provided by (used in) operating activities 1,447 (306,749)
----------- -----------
INVESTING ACTIVITIES
Proceeds from the sale of furniture and equipment 3,200 (1,030)
Capitalized development costs -- (110,193)
Convertable note 200,000
Cash received on notes receivable 35,000 --
----------- -----------
Net cash provided by (used in) investing activities 238,200 (111,223)
----------- -----------
FINANCING ACTIVITIES
Payments on noncompete agreements -- (8,255)
----------- -----------
Net cash used in financing activities -- (8,255)
----------- -----------
Increase (decrease) in cash and cash equivalents 239,647 (426,227)
----------- -----------
Cash and cash equivalents
Beginning of period 165,924 955,600
----------- -----------
End of period $ 405,571 $ 529,373
=========== ===========
</TABLE>
<PAGE>
LEGAL RESEARCH CENTER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(unaudited)
Basis Of Presentation: The interim financial statements are unaudited, but in
the opinion of management reflect all adjustments necessary for a fair
presentation of results of such periods. All such adjustments are of a normal
recurring nature. The results of operations for any interim period are not
necessarily indicative of results for a full fiscal year. These financial
statements should be read in conjunction with the audited financial statements
and notes thereto, for the year ended December 31, 1997.
Principles Of Consolidation: The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, The Law Office, Inc.
(TLO) and its eighty-five percent owned subsidiary, The CyberLaw Office, Inc.
(CLO). All significant inter company accounts and transactions have been
eliminated.
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.
Net Gain (Loss) Per Common Share: Net gain (loss) per common share is computed
on the basis of the weighted average number of common shares outstanding during
the respective periods.
Major Customers: Two customers accounted for 48%, and 14% respectively, of the
Company's total revenues for the quarter ended September 30, 1998. One of these
customers accounted for 13.21% of the Company's total revenues for the quarter
ended September 30, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis provides information that the Company's
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with the financial statements and footnotes which appear
elsewhere in this Report and the Company's annual report for 1997 on Form
10-KSB.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company cautions readers that statements
contained herein, other than historical data, may be forward-looking and subject
to risk and uncertainties including, but not limited to the continuation of
revenues through the Company's strategic alliances and the successful
development of other new business. The following important factors could cause
the Company's actual results to differ materially from those projected in
forward-looking statements made by or on behalf of, the Company:
o Failure of the Company or its partners to successfully expand its
market share and sell products and services.
o Company's inability to produce and deliver its products and services
at margins sufficient to cover operating costs.
o Company's inability to continue operating due to insufficient cash or
capital and continued losses.
o Company's dependence on a major customer or customers.
o Effectiveness of restructuring and cost cutting measures implemented
in 1997 by the Company to increase its gross margin and decrease sales
and general and administrative expenses.
In addition, as a result of the delisting of the Company's common stock from the
Nasdaq SmallCap Market, described below, investors may suffer a loss of
liquidity in the shares and the Company may have difficulty raising funds in the
<PAGE>
capital markets. Although the Company anticipates that its common stock will
trade on the Nasdaq "bulletin board" or in the local over-the-counter market,
there can be no assurance that such a market will develop or be maintained.
The Company's revenues have historically been derived from conducting analytical
research and writing on a non-recurring basis for its customers. Historically,
the Company has experienced a seasonal fluctuation in revenues with second and
third quarters being the slowest quarters of the year and the last quarter being
the strongest. The Company has developed and implemented programs designed to
attract customers to enter into long term relationships to provide greater
consistency in quarterly revenues.
RESULTS OF OPERATIONS
Revenues: Revenues increased by $329,398 or 92.8%, to $684,531 for the three
month period ended September 30, 1998, over the same period of 1997. For the
nine month period, revenues increased $110,439 or 7.5%. The increase is
primarily attributable to an increase in traditional research and writing
services and contract attorney revenues offset by a decrease in
Multi-jurisdictional survey revenue.
Third quarter and year to date 1998 traditional revenues increased approximately
245% and 36.5% respectively from the three and nine months ended September 30,
1997. Year to date MJS survey revenues have decreased 52.9% from the nine month
period in 1997.
Direct Operating Costs: Direct operating costs for compensation and other
benefits include hourly contract fees for independent research attorneys and
hourly compensation of staff research attorneys, document production and support
personnel. Other direct operating costs include outside research fees and
services, royalty fees for association referrals, computer database charges,
project data conversion fees, photocopying, and document retrieval expense.
Total direct operating costs increased $101,032, or 47.5%, for the three months
ended September 30, 1998, from the same period in 1997. For the nine month
period, direct operating costs decreased $151,455, or 17.1%.
The decrease in operating costs is primarily due to lower personnel costs,
computer database charges, and photocopying expense. Personnel costs decreased
due to the continued downsizing of the Company's infrastructure. Computer
database and photocopying charges have decreased due to improved efficiencies of
the Company's research staff.
Direct operating costs, expressed as a percentage of revenues decreased from
59.9% to 45.8% for the three months ended September 30, 1998, from the same
period in 1997. For the nine month period, direct operating costs as a
percentage of revenue decreased from 60.2% to 46.4%. The decreases are due to
various factors explained above.
Gross Profit: Gross profit for the three months ended September 30, 1998,
increased by $228,366 or 160.4% to $370,721 from gross profits of $142,355 for
the comparable period for 1997. As a percentage of revenue, gross profit
increased from 40.1% to 54.2% for the three months ended September 30, 1998,
from the same period in 1997, primarily as a result of the managed control of
direct operating costs.
For the nine months ended September 30, 1998, gross profit increased by $261,894
or 44.8% to $846,973 from the comparable 1997 period. As a percentage of
revenue, gross profit increased from 39.8% to 53.6% for the nine months ended
September 30, 1998, from the same period in 1997, due to the decrease in direct
operating costs as explained above.
Other Operating Costs: Other operating costs include compensation of officers,
sales and corporate staff, advertising and direct marketing expenditures and
general corporate overhead, including depreciation. Other operating costs
decreased by $108,894 or 28.9% for the three months ended September 30, 1998,
from the same period in 1997. Of these other operating costs, sales and
marketing expenses increased by $9,198, or 5.5% and general and administrative
costs decreased by $118,092 or 55.8%. The decrease in other operating costs is
due to the downsizing of the Company's infrastructure and continued cost
containment. For the nine months ended September 30,
<PAGE>
1998, other operating costs decreased $390,434 or 29.9%. The decrease in other
operating costs is primarily attributed to a decrease in general and
administrative costs of $427,062 or 62%, offset by an increase in marketing and
sales costs of $36,628 or 5.9%. The increase in marketing and sales cost is
primarily attributable to increased direct mailings and marketing in first and
third quarters of 1998.
Other Income and Expense: Interest income decreased $1,362 for the three months
ended September, 30, 1998, and $16,030 for the nine months ended September 30,
1998, from the comparable periods in 1997. The decrease was a result of less
cash invested in interest bearing accounts. Interest expense increased $7,711
for the nine months ended September 30, 1998 from the comparable periods in
1997. The increase was a result of interest expense on convertible notes
received in 1998.
Net Profit/Loss: The Company posted a net profit of $101,808 or $.04 per share
for the three months ended September 30, 1998, compared to a loss of $334,007 or
$.15 per share for the comparable period in 1997. For the nine month period
ended September 30, 1998 the Company reports a loss of $68,068 or $.03 per share
as compared to a loss of $1,821,180 or $.81 per share for the comparable period
in 1997. The 96.3% decrease in the loss per share was the result of a 17.1%
decrease in direct operating costs, a 29.9% decrease in general and
administrative expenses through the continued downsizing of the Company's
infrastructure, and discontinuation of operations of The Law Office.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to look for marketing and development opportunities and
alliances to increase revenues and cash flow. At September 30, 1998, the Company
had cash and cash equivalents of $405,571 and working capital of $675,004.
Cash generated in operating activities was $1,447 in the first nine months of
1998. This was primarily the result of a $46,902 net gain before depreciation
and other non-cash charges, a $109,383 increase in accounts receivable and
unbilled services, offset by a $20,049 increase in accounts payable. The Company
expects to further increase cash in the forth quarter of 1998.
Investing activity for the first six months of 1998 was $238,200, principally as
a result of two convertible notes payable, cash received on a note receivable
and proceeds from the sale of equipment.
The Company used $0 in financing activities for the first nine months of 1998.
Part II - Other Information
Item 1. Legal Proceedings
LAWFINDERS LITIGATION
On June 29, 1998, the Company was sued in Dallas, Texas by Lawfinders, Inc.
("Lawfinders"), a competitor of the Company, which alleged that the Company had
misappropriated Lawfinders's proprietary information. Lawfinders sought
injuctive relief and unspecified damages
Commencing in the summer of 1997 and ending in early 1998, the Company was
engaged in discussions with Lawfinders about a possible business combination.
Those discussions failed to produce an agreement between the parties.
Lawfinders commenced suit in state court and obtained a temporary restraining
order restraining the Company from engaging in certain practices in connection
with its appellate brief business. The Company removed the action to federal
court and, on November 4, 1998, after consideration of the evidence and the
parties' briefs, the federal court dissolved
<PAGE>
the temporary restraining order and found that because it is unlikely that
Lawfinders would be successful on the merits of its action, denied Lawfinders a
preliminary injunction.
The Company believes that it will prevail in the litigation, should it continue.
The Company's also believes that its costs of defending the action, including
attorneys' fees, are covered by the Company's general liability insurance
carrier and the Company believes that all future costs of defending the
litigation, if any, will be similarly covered.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LEGAL RESEARCH CENTER, INC.
Dated: November 6, 1998 By: /s/ Christopher R. Ljungkull
----------------------------
Christopher R. Ljungkull
Chief Executive Officer
October 21, 1998
Legal Research Center, Inc. Contacts: Christopher Ljungkull,
700 Midland Square Building CEO, 612 / 332-4950
331 Second Avenue South
Minneapolis, MN 55401
LEGAL RESEARCH CENTER REPORTS
93% INCREASE IN REVENUE, RECORD PROFIT
Minneapolis, MN - Legal Research Center, Inc. (OTC:LRCI) announced a 93%
increase in revenue and a net profit of $101,808, or 4 cents a share for its
third quarter ended September 30, 1998, compared to a net loss of $334,077 or 15
cents a share, over the same period in 1997. Revenue for the period was
$684,531, compared to $355,133 for the third quarter of 1997.
The net profit per share was the result of a 93 % increase in revenue, an
increase of only 50% in direct operating costs, a 29% decrease in general and
administrative expenses through the downsizing of the Company's infrastructure,
and discontinuation of operations of The Law Office.
Christopher Ljungkull, chief executive officer of Legal Research Center,
commented, "LRC's 15% third quarter profit is double our best-ever performance
in the past. It's our first profitable quarter since going public and could very
well mean our first profitable year since '94. Our decision to downsize
infrastructure and focus solely on the core research is clearly paying off in
increased gross and net margins. Strong sales, including large contracts which
we expect to continue through the fourth quarter, boosted us past positive
cashflow to profitability earlier than expected."
James Seidl, President, said, "The company's growth strategy over the
coming quarters is based upon an ongoing and aggressive direct-marketing
campaign, new and improved strategic alliances with prominent attorney
associations and legal publishers, and enhanced product and service offerings."
Legal Research Center (http://www.lrci.com), offers legal research and
writing services to attorneys in corporate and private practice throughout the
world. LRC has repeatedly been recognized as the leading supplier of legal
research services in the United States. In 1989, and each year thereafter, the
Association of Trial Lawyers of America (ATLA) selected LRC as the exclusive
provider of research and writing services to its 60,000 members. From 1990
through 1995, the American Corporate Counsel Association partnered with LRC as
the exclusive provider of research and writing services to its 10,000 members,
honoring LRC in 1996, 1997 and 1998 with ACCA's Prestigious President's Award.
In 1994 and following years, West Publishing (now West Group) selected LRC on an
exclusive basis to provide analytical research and writing services to West
customers.
Statements contained here, other than historical data, may be forward-looking
and subject to risks and uncertainties including, but not limited to the
continuation of revenues from major contracts and the successful development of
other new revenue sources, as well as those set forth in the company's 10-KSB,
10-QSB and other SEC filings.
<PAGE>
LEGAL RESEARCH CENTER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------------------- --------------------------------
1998 1997 1998 1997
-------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Revenues $ 684,531 $ 355,133 $ 1,579,084 $ 1,468,645
Operating income (loss) 102,222 (235,038) (69,321) (721,649)
Net gain (loss) $ 101,808 $ (334,007) $ (68,068) $(1,821,180)
----------- ----------- ----------- -----------
Net gain (loss) per share $ 0.04 $ (0.15) $ (0.03) $ (0.81)
Weighted average common and common
equivalent shares outstanding 2,287,633 2,257,633 2,287,633 2,257,633
</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, December 31,
1998 1997
------------- ------------
Current assets $ 869,493 $ 546,467
Furniture & equipment, net 55,664 116,615
Other assets 284,453 374,583
---------- ----------
Total assets $1,209,610 $1,037,665
========== ==========
Current liabilities $ 194,489 $ 154,477
Long-term liabilities 200,000 --
Stockholders' equity 815,121 883,188
---------- ----------
Total liabilities and shareholders' equity $1,209,610 $1,037,665
========== ==========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTER
ENDED AND NINE MONTHS ENDED SEPTEMBER 30, 1998 FINANCIAL STATEMENT AND IS
QUALIFIED IN ITS ENTRIETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 405,571
<SECURITIES> 0
<RECEIVABLES> 386,527
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 869,493
<PP&E> 345,797
<DEPRECIATION> 290,133
<TOTAL-ASSETS> 1,209,610
<CURRENT-LIABILITIES> 194,489
<BONDS> 0
0
0
<COMMON> 33,276
<OTHER-SE> 781,845
<TOTAL-LIABILITY-AND-EQUITY> 1,209,610
<SALES> 0
<TOTAL-REVENUES> 1,579,084
<CGS> 0
<TOTAL-COSTS> 732,111
<OTHER-EXPENSES> 916,294
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,711
<INCOME-PRETAX> (68,068)
<INCOME-TAX> 0
<INCOME-CONTINUING> (68,068)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,068)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
