FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO
_______________ .
STRATFORD ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-26112 41-1759882
(State of Jurisdiction) (Commission (IRS Employer
File Number) Identification No.)
67 Wall Street, Suite 2411, c/o Daniel W. Dowe, Esq.
New York, New York 10005
(Address of Principal Executive offices) (Zip Code)
Registrant's telephone number, including area code 212-293-7299
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 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 filing requirements for the
past 90 days. Yes _X_ No ___.
The Company had 11,691,896 shares of its $.001 par value common stock issued and
outstanding on November 30, 1997. On a fully diluted basis, assuming all
outstanding stock options and warrants to purchase common are exercised, the
Company would have 14,049,172 shares of common stock issued and outstanding. The
Company has commenced a lawsuit to cancel 1,800,000 shares of common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-Q Incorporated Document
Part II
Item 6 - Exhibits and Reports Form 8-K filed on
on Form 8-K November 10, 1997
Form 8-K filed on
November 24, 1997
<PAGE>
STRATFORD ACQUISITION CORPORATION
Index
Page No.
--------
Part I Financial Information
Item 1. Financial Statements (Unaudited)
Balance Sheet - dated
November 30, 1997 and May 31, 1997.................................F-1
Statement of Operations - for the three months ended November
30, 1997 and November 30, 1996 and for the six months ended
November 30, 1997 and November 30, 1996............................F-2
Statement of Cash Flows - for the six
months ended November 30, 1997 and
November 30, 1996..................................................F-3
Statement of Changes in Shareholders'
Equity.............................................................F-4
Notes to Financial Statements......................................F-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................1
Part II Other Information
Item 1. Legal Proceedings....................................................3
Item 2. Changes in Securities................................................3
Item 3. Defaults Upon Senior Securities......................................4
Item 4. Submission of Matters to a Vote of Security Holders..................4
Item 5. Other Information....................................................4
Item 6. Exhibits and Reports on Form 8-K.....................................4
ii
<PAGE>
PART I
Item 1. Financial Statements Page
----
Balance Sheet - dated
November 30, 1997 and May 31, 1997.................................F-1
Statement of Operations - for the three months ended November
30, 1997 and November 30, 1996 and for the six months ended
November 30, 1997 and November 30, 1996............................F-2
Statement of Cash Flows - for the six
months ended November 30, 1997 and
November 30, 1996..................................................F-3
Statement of Changes in Shareholders'
Equity.............................................................F-4
Notes to Financial Statements......................................F-5
<PAGE>
STRATFORD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
November 30, May 31,
1997 1997
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 15,486 $ 10,098
Other receivables 17,453 40,579
Inventory 198,965 143,313
Marketable securities -- 13,250
----------- -----------
Total Current Assets 231,903 207,240
PROPERTY, PLANT, AND EQUIPMENT, net of
accumulated depreciation and amortization 3,268 2,158
OTHER ASSETS:
Organization costs, net of accumulated amortization 805 741
Security deposits 12,111 9,394
----------- -----------
12,916 10,135
----------- -----------
$ 248,088 $ 219,533
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 204,380 $ 110,385
Payroll taxes payable 2,352 2,833
----------- -----------
Total Current Liabilities 206,732 113,218
DUE TO SHAREHOLDERS: -- 315,000
COMMITMENTS AND CONTINGENCIES: --
SHAREHOLDERS' EQUITY:
Common stock - $0.001 par value
50,000,000 shares authorized
11,691,896 and 7,867,000 shares
issued and outstanding, respectively 9,566 7,813
Additional paid-in capital 1,935,721 1,327,324
Deficit accumulated during the
development stage (1,903,932) (1,543,822)
----------- -----------
Shareholders' equity (deficit) 41,355 (208,685)
----------- -----------
$ 248,088 $ 219,533
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-1
<PAGE>
STRATFORD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
---------------------- ----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues
Technology license fees $ -- -- $ -- $ --
--------- --------- --------- ---------
-- -- -- --
--------- --------- --------- ---------
Operating Expenses
Compensation and related costs
legal, accounting, consulting fees and other general
and administrative costs 147,963 159,890 368,834 336,154
--------- --------- --------- ---------
Total operating expenses 147,963 159,890 368,834 336,154
--------- --------- --------- ---------
Loss from operations (147,963) (159,890) (368,834) (336,154)
--------- --------- --------- ---------
Other Income
Interest income 5 6 39 49
Foreign exchange gain (loss) 7,679 (1,639) 8,686 (1,122)
--------- --------- --------- ---------
7,684 (1,633) 8,725 (1,073)
Net Loss $(140,279) (161,523) $(360,110) $(337,227)
========= ========= ========= =========
Net loss per weighted-average share of
common stock outstanding $ (0.01) $ (0.02) $ (0.03) $ (0.04)
========= ========= ========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-2
<PAGE>
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
<TABLE>
<CAPTION>
November 30,
----------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(360,110) $(337,227)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 524 --
Common stock issued as payment for services 47,700 5
CHANGES IN OPERATING ASSETS AND LIABILITIES:
(Increase) decrease in other receivables 23,126 (31,364)
(Increase) decrease in inventory (55,652) --
(Increase) decrease in organization costs (157) --
(Increase) decrease in security deposits (2,717) 44,118
Increase (decrease) in accounts payable and accrued expenses 93,996 --
Increase (decrease) in accounts payroll taxes payable (481) --
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (253,771) (324,468)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (1,541) --
Proceeds from sale of marketable securities 13,250 --
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES 11,709 --
CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase) decrease in loan to shareholder (315,000) 134,405
Proceeds from sale of common stock 562,450 75,033
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 247,450 209,438
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,388 (115,030)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,098 155,194
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15,486 $ 40,164
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 7 $ --
========= =========
Income taxes $ -- $ --
========= =========
Cash received during the period for:
Interest $ 39 $ 49
========= =========
DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In July 1997, certain stockholders converted a total of $315,000 of stockholder loans
including accrued interest of $11,440 into 907,150 shares of common stock $ 326,440 $ --
========= =========
In July 1997, the Company issued 97,656 shares of common stock to its president
in lieu of payment for his remaining unpaid compensation of $31,250 $ 31,250 $ --
========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-3
<PAGE>
STRATFORD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
----------------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, May 31, 1997 10,113,381 $ 7,813 $ 1,327,324 $(1,543,822) $ (208,685)
Sale of common stock 350,000 350 117,150 -- 117,500
Cancellation of common stock (175,000) -- -- -- --
Issuance of common stock
for services 64,857 65 22,635 -- 22,700
Issuance of common stock
for compensation 71,428 71 24,929 -- 25,000
Conversion of stockholders'
loans to equity 1,004,806 1,005 356,685 -- 357,690
Net loss -- -- -- (219,831) (219,831)
----------- ----------- ----------- ----------- -----------
BALANCE, August 31, 1997 11,429,472 $ 9,304 $ 1,848,723 $(1,763,653) $ 94,374
Sale of common stock 220,750 220 87,080 -- 87,300
Cancellation of common stock (40,000) (40) -- -- (40)
Issuance of common stock
for services -- -- -- -- --
Issuance of common stock
for compensation -- -- -- -- --
Conversion of stockholders'
loans to equity 81,674 82 (82) -- --
Net loss -- -- -- (140,279) (140,279)
----------- ----------- ----------- ----------- -----------
BALANCE, November 30, 1997 11,691,896 $ 9,566 $ 1,935,721 $(1,903,932) $ 41,355
=========== =========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
F-4
<PAGE>
STRATFORD ACQUISITION CORP. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1997
(Unaudited)
Reference is made to the financial statements included in the Company's Annual
Report (Form 10-K) filed with the Securities and Exchange Commission for the
year ended May 31, 1997.
The financial statements for the periods ended November 30, 1997 are unaudited
and include all adjustments which, in the opinion of management, are necessary
to a fair statement of the results of operations for the periods then ended. All
such adjustments are of a normal recurring nature. The results of the Company's
operations for any interim period are not necessarily indicative of the results
of the Company's operations for a full fiscal year.
F-5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following financial information should be read in conjunction with the
Company's financial statements and footnotes, which are annexed hereto. Forward
looking statements made in this section are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying consolidated financial
statements.
The Financial Statements for the period ended November 30, 1997 included in this
Form 10-Q are unaudited; however, such information reflects all adjustments
(consists solely of normal recurring adjustments), which are, in the opinion of
management, necessary to present a fair statement of the results for the interim
period.
Results of Operations
Six months ending November 30, 1997 vs. November 30, 1996.
Sales for the six month period ending November 30, 1997, were $0. In the same
period in 1996, sales were also $0. The Company's inability to generate sales in
this period is attributable to the complete management and operational
turnaround that the Company undertook in November, 1996. However, with the
resignation of the Company's Chairman and Chief Executive Officer, A. Roy
MacMillan, effective November 11, 1997, the Company has publicly announced the
implementation of a 60 Day Plan which will complete the Company's operational
turnaround and allow it to advance from the development stage to the operating
stage on March 1, 1998. The Company announced this 60 Day Plan on December 15,
1997 in a letter to its shareholders. (See Item 6 -Exhibits). As of the filing
date of this Form 10-Q, the Company has made substantial progress on each item
listed in its 60 Day Plan and is on schedule to meet its target production date
of March 1, 1998.
Operating expenses for the six month period ending on November 30, 1997,
increased approximately 10% to $368,834 when compared to the same period in
1996. The increase was attributable to the legal, auditing and administrative
expenses incurred by the Company to complete the turnaround of its operations.
The Company also recorded other income of $7,684, which consisted primarily of
financial gains from currency fluctuations. The net result of the Company's
operations for the six month period was a loss of $360,110. Thus, the Company's
business operations in the six month period ended November 30, 1997 were
nominal, although the Company does intend to begin selling its admixture and
finished mortar products in March, 1998.
<PAGE>
On November 30, 1997, the Company had $248,088 in assets, of which $231,903 were
current assets which include $198,965 of inventory, $15,486 in cash and cash
equivalents and $17,453 in accounts and advances receivable. In addition, the
Company had $3,268 of equipment (net of depreciation), organizational cost of
$805 and security deposits of $12,111. Based on the Company's average monthly
operating expenses of $61,472 during the six month period ending November 30,
1997, the Company has less than one month of current liquid assets to operate
its business, assuming no revenues are earned in the near future and that the
Company is unable to raise capital from third-party sources.
However, in October the Company raised $74,000 for working capital through the
sale of 185,000 shares of common stock to seven shareholders. In November the
Company raised an additional $25,000 for working capital through the sale of
62,500 shares of common stock to three entities controlled by a director,
Douglas Friedenberg. In December and in January, 1998, Douglas Friedenberg,
through an investment entity controlled by him, loaned the Company a total of
$45,000. The Company intends to repay a portion of this loan from the proceeds
of the private Debenture offering it will commence on January 16, 1998, and will
convert the remaining balance of the loan into a purchase of the Debenture.
Although the Company and Mr. Friedenberg have not come to final terms regarding
the repayment of the loan, they have a mutually acceptable agreement to base the
final loan repayment terms on the Company's success in completing the offering.
In the six month period, the Company had total liabilities of $206,732 and
$41,355 in shareholders' equity. However, the Company had an accumulated deficit
of $1,903,932.
Liquidity and Financial Resources at November 30, 1997
On November 30, 1997, the Company, due to the lack of internally generated cash
flow from operations sold common stock to raise working capital from third-party
sources to sustain its operations. The Company is planning to raise additional
working capital through the offer for sale of a 10% Redeemable $500,000
Debenture and warrants to purchase 1,000,000 shares of its common stock. The
Company will commence this offering on January 16, 1998 and foresees the
possibility of closing all or a substantial portion of the offering in early
February. The proceeds of this offering will be used primarily to complete the
purchase and installation of a fully-integrated blending and bagging machine, to
renovate its office facility in Mississauga, Ontario and for additional payroll
expenses attributable to the hiring of a general manager and a sales manager to
oversee the Company's Canadian operations.
2
<PAGE>
Part II Other Information
Item 1. Legal Proceedings
On June 26, 1997, the Company commenced an action against Mr. Jan Sulkiewicz and
certain persons he controls for breach of contract and to secure certain
equipment and intellectual property that is owned by the Company, but is
allegedly being wrongfully withheld by Mr. Sulkiewicz. Since the filing of the
lawsuit, Mr. Sulkiewicz has returned some equipment, however the remaining
issues are still being litigated. The Company believes that this lawsuit will be
adjudicated in its favor. Stratford Acquisition Corporation v. Jan Sulkiewicz,
et. al., Ontario Court (General Division), Index No. 97- CV-126925.
On August 12, 1997, a shareholder, Mel Greenspoon, commenced an action against
the Company and its former President, Mr. A. Roy MacMillan, to enjoin the
Company and Mr. MacMillan from taking any action that would restrict the sale of
common stock that he allegedly owns. Mr. Greenspoon is one of the shareholders
that are subject to the following lawsuit. The Company has raised several
defenses to this action and believes the lawsuit is without merit. Mel
Greenspoon vs. Stratford Acquisition Corporation, et. al., Ontario Court
(General Division), Index No. 97-CV-126814. On August 27, 1997, the Company
commenced an action against 46 separate shareholders seeking, principally, to
cancel approximately 1,800,000 shares of common stock and certain stock options
which it believes were unlawfully issued. In addition, the Company has asserted
additional claims in this litigation against certain defendants, who were former
directors and officers of the Company, for breach of their fiduciary duties of
care and loyalty to the Company. The Company believes that this lawsuit will be
adjudicated in its favor. Stratford Acquisition Corporation v. 10222
Investments, et. al., United States District Court, District of Minnesota, Index
No. 97- 1954. As of the filing of this lawsuit shareholders owning approximately
800,000 shares of stock have defaulted in answering the lawsuit. The Company
will cancel these shares once it has received a final court order.
The SEC has made inquiries of the Company relating to certain accounting and
financial reporting issues arising from the Company's quarterly filings in 1996
and 1995. The SEC's investigation is believed to be directed at the actions and
omissions of former directors, officers, employees and advisors of the Company
that were employed by, or associated with, the Company prior to November 29,
1996.
Item 2. Changes in Securities
In the three month period ended November 30, 1997, the Company issued 302,424
shares of its $.001 par value common stock and cancelled 40,000 shares pursuant
to an agreement with the record
3
<PAGE>
shareholder as part of the lawsuit Stratford Acquisition Corporation v. 10222
Investments, et. al., United States District Court, District of Minnesota, Index
No. 97-1954. Of the 302,424 shares that were issued all shares were issued at
market prices and sold either pursuant to Regulation D or Regulation S, if it
was applicable. Of the 302,424 shares of common stock issued in the three month
period (August 31, 1997 to November 30, 1997) 81,674 shares were issued to an
entity controlled by one of the Company's directors, Douglas Friedenberg, in
partial exchange for the entity's agreement to convert the outstanding principal
and accrued interest in a debenture into equity. (See Liquidity and Financial
Resources at November 30, 1997).
On September 17, 1997, the Company issued an option to purchase 10,000 shares of
its common stock to a former officer of its subsidiary, Novacrete Technology,
Inc. The stock option expires on September 16, 2002 and has an exercise price of
$.50 per share.
On October 17, 1997, the Company issued to a newly appointed director, William
K. Lavin, an option to purchase 200,000 shares of common stock, at the exercise
price of $.40 and having a termination date of October 17, 2002.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable. The Company is planning to hold the next annual
meeting of shareholders in March, 1998.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(99) December 15, 1997 letter to shareholders.
Reports on Form 8-K
Form 8-K filed on Incorporated by reference
November 10, 1997 to the Form 8-K Report
Form 8-K filed on Incorporated by reference
November 24, 1997 to the Form 8-K Report
4
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, Stratford Acquisition Corporation has duly caused this
report to be signed on its behalf by the undersigned person who is duly
authorized to sign on behalf of the Registrant and as chief accounting officer.
STRATFORD ACQUISITION CORPORATION
By: /s/ Daniel W. Dowe
-----------------------------
Daniel W. Dowe
President
Date: January 15, 1998
5
<PAGE>
EXHIBIT A
STRATFORD ACQUISITION CORPORATION
1775 BROADWAY, SUITE 1410
NEW YORK, NEW YORK 10019
December 15, 1997
Dear Shareholder:
With the Holiday Season upon us, the Board of Directors of Stratford
Acquisition Corporation would like to present you with a brief overview of the
past year and some insights into a bold plan of action that we intend to
complete by February 15, 1998. Our plan is known as the "60 Day Plan" and
everyone, from our new Chairman, William Lavin to Phil Ramdharie, our foreman
who will be responsible for stacking bags and pails of our Novacrete Admixture
and Novacrete Mortar Products at our warehouse door for shipment to
distributors, has signed on to this plan.
With the retirement of A. Roy MacMillan on November 17, 1997, I was
appointed as Interim President to spearhead the 60 Day Plan and to kick-off a
very aggressive selling and marketing campaign on our Novacrete Admixture and
all mortar products using the Novacrete Admixture.
From now to February 15, 1998, we will complete the following items which
together constitute our 60 Day Plan:
* Complete a private offering of securities to raise working capital.
* Purchase a fully-integrated blending and bagging machine to produce and
bag our Novacrete Admixture, Novacrete Multi-Purpose Mortar (MP), our
fibre-reinforced Novacrete Multi-Purpose Mortar (MPI) and all future Novacrete
products.
* Work toward completing our negotiations with established distributors of
construction products for Canada. By contracting out the distribution of our
products we will be able to concentrate on the production of the Novacrete
Admixture and new mortar and concrete products. This approach will also allow
our sales personnel to work with our distribution "partners" on maximizing
customer awareness of our products and, ultimately, to generate sales as fast as
possible.
* Hire a salesperson to head our Sales Department in Canada. This person
will have 10+ years of experience in selling construction products and a civil
engineering background to be capable of "speaking" with our distribution
partners and potential customers about the technical advantages of our products,
which management believes are very competitive.
<PAGE>
* We will arrange to have our Novacrete MP and Novacrete MPI mortar
products tested again by Ortech (a leading Canadian testing laboratory) to
validate the products against the very stringent product specification standards
demanded by the New York State Department of Transportation. This validation
will enhance our distribution efforts in New York State and throughout the
United States. We have already had these products tested in accordance with the
specifications demanded by the Ontario Ministry for Transportation, which are
also very stringent, and are quite pleased with each product's performance.
* Secure reports from two consultants that the Company has hired to provide
comments on the technical aspects of the Novacrete Admixture and finished mortar
products and to present ideas on establishing a distribution network in the
United States.
* Establish a new office in New York City to serve as the Company's
Corporate Headquarters and its United States sales office. The Company will
continue to manufacture its products in its Mississauga, Ontario facility.
* Hire a law firm to advise management on the prospects of patenting the
Novacrete Admixture. Although the Company currently has trade secret status for
the Novacrete Admixture, a patent will provide the Company with even greater
legal protections.
* We plan to expand our board of directors and will compliment the existing
board by adding an additional person with substantial experience in the
construction industry in the United States.
* Set a date for our next annual meeting of shareholders. Although it has
been in excess of one year since the last meeting of shareholders we would like
to complete the 60 Day Plan and then present to you at the upcoming Annual
Meeting of Shareholders our business plan for the remaining part of the year --
"The '98 Plan".
Upon the completion of the 60 Day Plan we will have a fully-integrated
production facility, a distribution system to sell our products in Canada, a
sound and experienced management team and governing board of directors, a
first-rate administration office in Canada for our customers and employees and,
foremost, a Company that is finally positioned to sell its products and create
value for its shareholders. None of this could have been accomplished without
the consistent support of our director, Doug Friedenberg, who has been
instrumental in arranging to secure working capital for the Company over the
past year and the consistent performance of Dianne Hartwick, who was recently
promoted to General Manager of our Mississauga facility.
I hope you can attend the upcoming Annual Meeting of Shareholders so that
you can personally witness the improvements we
2
<PAGE>
will make over the next 60 days and get a first-hand presentation of "The '98
Plan".
As a shareholder, I will assure you that the new management team is geared
to move swiftly and with conviction to sell our products and create value for
all shareholders.
Happy Holidays!
Sincerely,
/s/ Daniel W. Dowe
------------------
Daniel W. Dowe
Acting President
3
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Sep-01-1997
<PERIOD-END> Nov-30-1997
<CASH> 15,486
<SECURITIES> 0
<RECEIVABLES> 17,453
<ALLOWANCES> 0
<INVENTORY> 198,965
<CURRENT-ASSETS> 231,903
<PP&E> 3,268
<DEPRECIATION> 0
<TOTAL-ASSETS> 248,088
<CURRENT-LIABILITIES> 206,732
<BONDS> 0
0
0
<COMMON> 1,945,287
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 248,088
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 147,963
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (140,279)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
