<PAGE>
U.S. 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 October 31, 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 No. 0-21255
-------
IAS COMMUNICATIONS, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Oregon 91-1063549
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
185-10751 Shellbridge Way, Richmond, BC Canada V6X 2W8
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(604) 278-5996
------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports 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
------- -------
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of December 6, 1999 - 10,331,712
shares of common stock, no par value.
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X].
<PAGE>
INDEX
<TABLE>
<CAPTION>
PART I -- Financial Information Page
<S> <C>
Item 1. Financial statements........................................................................... 2
- ------- --------------------
Balance Sheets as of October 31, 1999 and April 30, 1999................................................ 3
Statements of Operations for the six months ended October 31, 1999 and 1998............................. 4
Statements of Cash Flows for the six months ended October 31, 1999 and 1998............................. 5
Item 2. Management's Discussion and Analysis of Financial Conditions
- ------- ------------------------------------------------------------
and Results of Operations...................................................................... 6-9
-------------------------
PART II -- Other Information............................................................................ 10
Signatures........................................................................ 11
</TABLE>
-1-
<PAGE>
PART I Financial Information
Item 1. Financial Statements (Unaudited)
- ------- --------------------------------
-2-
<PAGE>
IAS Communications, Inc.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
October 31, April 30,
1999 1999
(unaudited) (audited)
$ $
<S> <C> <C>
Assets
Current Assets
Accounts receivable 9,421 8,445
Inventory 14,500 6,056
Prepaid expenses 44,375 43,031
- ---------------------------------------------------------------------------
68,296 57,532
Property, Plant and Equipment 35,192 39,860
Licence and Patent Protection Costs 370,085 368,947
- ---------------------------------------------------------------------------
473,573 466,339
===========================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Cheques issued in excess of funds on deposit 1,779 26,095
Accounts payable 494,417 472,558
Accrued liabilities 41,782 35,803
Due to related companies 256,408 -
- ---------------------------------------------------------------------------
794,386 534,456
- ---------------------------------------------------------------------------
Convertible Debentures 35,000 210,000
- ---------------------------------------------------------------------------
Stockholders' Equity (Deficit)
Common Stock
Class "A" voting - 100,000,000 shares
authorized without par
value; 10,331,712 shares
and 10,268,858 shares
issued and outstanding
respectively 4,221,060 4,182,794
- paid for but unissued
(194,000 shares) 97,000 -
Class "B" non-voting - 100,000,000 shares
authorized without par
value; none issued - -
- ---------------------------------------------------------------------------
4,318,060 4,182,794
Preferred Stock 50,000,000 shares
authorized; none issued - -
Deficit Accumulated During The Development Stage (4,673,873) (4,460,911)
- ---------------------------------------------------------------------------
(355,813) (278,117)
473,573 466,339
===========================================================================
</TABLE>
-3-
<PAGE>
IAS Communications, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Six months ended
October 31,
-------------------------
1999 1998
(unaudited) (unaudited)
$ $
<S> <C> <C>
Revenue 29,472 -
Cost of Sales (21,206) -
- ---------------------------------------------------------------------------------
Gross Profit 8,266 -
- ---------------------------------------------------------------------------------
Administration Expenses
Advertising 12,400 -
Bank charges 784 478
Business plan (1,700) 11,910
Depreciation 2,090 1,242
Financing commission and legal fees - 47,500
Foreign exchange 1,584 -
Interest on convertible debentures 7,924 13,340
Premium on cash redemption of convertible debentures 29,790 -
Investor relations - consulting 10,000 190,045
Investor relations - publications 5,639 23,998
Management fees 15,000 30,000
Office, postage and courier 15,619 34,460
Professional fees 51,393 82,233
Rent and secretarial 53,810 22,841
Telephone 3,804 6,987
Transfer agent and regulatory 10,341 6,216
Travel and promotion 12,314 56,451
Less interest - (2,414)
- ---------------------------------------------------------------------------------
230,792 525,287
- ---------------------------------------------------------------------------------
Research and Development Expenses
Royalty 1,500 1,500
Depreciation and amortization 15,214 14,582
Consulting 48,000 36,000
Subcontracts
Others 8,721 7,181
West Virginia University Research Corporation - 165,771
Emergent Technologies Corporation - 227,490
Less engineering contribution by a third party (83,000) (80,781)
- ---------------------------------------------------------------------------------
(9,565) 371,743
- ---------------------------------------------------------------------------------
Net Loss 212,961 897,030
=================================================================================
Net Loss Per Share .02 .10
=================================================================================
Weighted Average Shares Outstanding 10,318,000 9,458,000
=================================================================================
</TABLE>
-4-
<PAGE>
IAS Communications, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Six months ended
October 31,
-------------------------
1999 1998
(unaudited) (unaudited)
$ $
<S> <C> <C>
Cash Flows to Operating Activities
Net loss (212,961) (897,030)
Adjustment to reconcile net loss to cash
Depreciation 17,304 15,824
Shares issued for services - 104,867
Shares issued for convertible debenture interest 3,266 -
Change in non-cash working capital items
(Increase) in accounts receivable (976) -
(Increase) in inventory (8,444) -
(Increase) in prepaid expenses (1,344) (28,877)
Increase in accounts payable and accrued liabilities 27,838 128,008
- ---------------------------------------------------------------------------------------
Net Cash Used in Operating Activities (175,317) (677,208)
- ---------------------------------------------------------------------------------------
Cash Flows to Investing Activities
Increase in property, plant and equipment (2,222) (8,857)
Increase in patent protection costs (11,553) (1,260)
Increase in loan receivable - (4,861)
- ---------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (13,775) (14,978)
- ---------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from (redemption of) convertible debentures (140,000) 500,000
Increase in common stock - 215,750
Increase in subscriptions 97,000 -
Proceeds from (repayment to) related companies 256,408 (15,387)
- ---------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 213,408 700,363
- ---------------------------------------------------------------------------------------
Increase in Cash 24,316 8,177
Cash (Deficiency) - Beginning of Period (26,095) 15,882
- ---------------------------------------------------------------------------------------
Cash (Deficiency) - End of Period (1,779) 24,059
=======================================================================================
Non-Cash Financing Activities
Shares issued pursuant to performance stock
agreements for services - 166,640
Convertible debentures with a face value of
$35,000 plus accrued interest of $3,266
were converted into 62,854 shares 38,266 -
- ---------------------------------------------------------------------------------------
38,266 166,640
=======================================================================================
Supplemental disclosures:
Interest paid 12,735 2,287
Income tax paid - -
</TABLE>
-5-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- ------- -----------------------------------------------------------------------
of Operations
-------------
Management's Discussion
- -----------------------
This report contains forward-looking statements. The words, "anticipate",
"believe", expect", "plan", "intend", "estimate", "project", "could", "may",
"foresee", and similar expressions are intended to identify forward-looking
statements. The following discussion and analysis should be read in conjunction
with the Company's Financial Statements and other financial information included
elsewhere in this report which contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below, as well as those discussed elsewhere
in this report.
Overview
- --------
IAS Communications, Inc., herein "the Company", was incorporated on December 13,
1994 pursuant to the Laws of the State of Oregon, USA.
The Company is a development stage company engaged in the development of
advanced antenna technology known as the Contrawound Torroidal Helical Antenna,
herein "CTHA", for wireless communications markets including cellular, meter
reading and global positioning services. The CTHA, previously developed in
conjunction with researchers at West Virginia University, is a technologically
advanced antenna design which could be incorporated into a wide variety of
telecommunications applications. The Company has been granted worldwide
sublicensing rights for commercial applications, excluding military and
governmental applications, for the CTHA pursuant to an agreement with Integral
Concepts Inc. and West Virginia University Research Corporation.
The Company entered into an exclusive five year licensing agreement with
Information Highway, Inc., a leading edge web content developer and Internet
service provider (ISP), in January 1999 to sell the Hawks television and amateur
radio antennas on their virtual mall Internet website at www.theexecutive.com.
The new television and amateur radio antennas can also be purchased from the
Company's website at www.iascom.com.
The Company is currently in production with the 14" television and amateur radio
antennas and is receiving orders on a daily basis through its Internet site. The
Company plans to aggressively market its 5" antenna at $29.95.
The Company was sued in April 1998 in a civil action filed in U.S. District
Court for the District of Oregon (the "Oregon Litigation"). The Plaintiff,
Vortekx, PC, ("Plaintiff") seeks money damages and equitable relief against the
Company alleging patent infringement by the Company for the CTHA. WVU owns the
patent rights to the CTHA technology which were sublicensed to the Company. Two
patents were granted for the CTHA to WVU; one in August 1995, and another in
August 1997. The Plaintiff's patent was approved on March 31, 1998.
The plaintiff in the Oregon Litigation, Kurt VanVoorhies, is a defendant in a
pending civil action in the U.S. District Court for the Northern District of
West Virginia brought by WVU (the "West Virginia Litigation") claiming that the
CTHA invention is owned by WVU. As alleged in the West Virginia Litigation, the
Company believes that the patent rights for the CTHA technology belongs to WVU
and therefore based on the license, the Company owns the worldwide rights to the
CTHA commercial applications. Dr. James Smith, the former Chairman of the Board
of the Company, has been sued by Plaintiff in a third party complaint in the
West Virginia Litigation together with WVU and Integral Concepts, Inc.
Pursuant to various Motions to the U.S. District Court for the District of
Oregon, the Company was successful in having the Oregon Litigation transferred
to the Northern District of West Virginia. A trial date has not been set.
Based upon the information available to the Company at this time, the Company
believes that the Plaintiff's alleged claim of infringement is without legal or
factual basis. However, if the Plaintiff in the Oregon Litigation is successful,
it could seriously jeopardize the Company financially.
In a development stage company, management devotes most of its activities to
establishing a new business. Planned principal activities have not yet produced
significant revenues and the Company has undergone recurring losses from
inception, totalling $4,674,000 and has a working capital deficit of $726,000
which includes a negative cash balance of $2,000. These factors raise doubt
about the Company's ability to continue as a going concern. The ability of the
Company to emerge from the development stage with respect to its planned
principal business activity is dependent upon its successful efforts to raise
additional equity financing and develop markets for its products and receive
ongoing support from the majority of its creditors. During fiscal 1999 the
Company arranged a $5,000,000 convertible debenture with an investment banker,
of which $500,000 has been drawn down. As of October 31, 1999 the Company has
redeemed or the holder has converted $500,000 of such debentures.
-6-
<PAGE>
The Company recently increased its current private placement from 500,000 units
to 1,000,000 units and the price per unit was reduced from $1.00 per unit to
$0.50 per unit. Each unit will contain one share and one warrant to acquire one
additional share at $0.75 per share if exercised in year one. A total of
$319,000 has been raised and 200,000 shares issued (with a further 438,000
shares allotted and to be issued) as at November 30, 1999.
The Company has allotted 1,013,600 shares for the potential exercise of warrants
at between $1.50 and $2.85 per share, which, if exercised, could raise in excess
of $2,000,000. As at December 6, 1999 the exercise price was substantially
greater than the trading price of the Company's stock. The Company has allotted
1,220,500 shares for the potential exercise of stock options at prices between
$0.25 and $2.25 per share. If all options are exercised the Company could raise
in excess of $1,300,000. Of these, a total of 1,070,500 have exercise prices at
$1.00 or less.
Progress Report from May 1, 1999 to December 7, 1999
- ----------------------------------------------------
The Company successfully tested the CTHA for the ham version of the CTHA at the
Dayton Hamvention, which demonstration served to introduce the CTHA to users in
the ham frequency range.
An agreement was completed to build and test the CTHA Antenna for receiver sites
in the narrowband personal communications system network of MobileComm
(MobileMedia Communications, Inc.). Ten prototypes of the CTHA were completed
for testing by MobileComm. The test results from MobileComm have been
unsuccessful.
Larry Hawks, the Company's Chief Engineer and Vice-President of Research and
Development, has designed a new technology antenna that is 14" in diameter and
2" thick that will receive in an omni pattern or can be directional to receive
in 35 degree segments. The new antenna requires no amplifier and is easy to
connect as it is simply bolted in place with the mounting provided. The
Company's low profile, environmentally friendly television antenna will receive
all local VHF/UHF stations and will replace the unsightly existing beam antennas
used today. They can be attached to a satellite dish mounted on a recreational
vehicle, placed in the attic of a house or condominium, on top of a roof or
placed on a television set to receive local television statements within a 60
mile radius. A new amateur radio antenna was also designed and tested, which new
design is portable on 10 through 80 meters with an antenna tuner or operates as
a monoband on 20 and 40 meters. With its unique properties, the antenna can be
laid on the ground, in an attic, on a roof or awning, or placed on a tree or on
top o a motorhome and even transmits and receives in the trunk of an automobile.
The antenna is approximately 36" in diameter and is 2" high. It can use a 50-OHM
coax of choice and will load to the full legal limit and is broad banded to
receive signals from .5 MHz to 30 MHz. It has been field tested by Larry Hawks
for one year, with logged contacts from California to New York, north central
Indiana to Mexico, all of South America, Spain, England, Russia, Norway,
Switzerland and many other European countries.
The Company granted ARINC an exclusive license to market and sell the new
antennas for ORBCOMM satellite applications under the Dominium(R) product line
to encompass the worldwide inter-modal shipping containers market area for one
year. ARINC, founded in 1929 and headquartered in Annapolis, Maryland, provides
communications and systems integration engineering to business and industry.
ARINC's Dominium(R) product line uses the ORBCOMM low earth orbit (LEO)
satellite communication system, which provides global communications coverage
especially useful in remote areas that are not serviced by conventional or
cellular telephone or other terrestrial communication networks. The Dominium(R)
tracker unit is battery powered and equipped with the Global Positioning System
(GPS). It can be programmed to automatically report its position and other
information like temperature, engine speed or load capacity, at any desired time
interval, or upon reaching a user-determined alarm value. Dominium(R) also
markets a data messaging line of products, which integrates input/output devices
for sending and receiving text messages.
A subscriber installs the tracker unit on the asset to be tracked or monitored
for a variety of applications including trucks, truck tractors, detached truck
trailers, rail cars, ships and containers. Dominium(R) currently provides
service to national and regional trucking companies and to national railroads.
The new antenna is a compact, low profile antenna, flush mounted on an
application at a fraction of the height of the monopole antenna used today. The
Company holds the worldwide rights to all commercial applications for this
technology and ETC owns the Military/Government rights.
By News Release dated September 27, 1999 the Company announced an agreement to
grant ARINC Incorporated exclusive worldwide rights to sell and manufacture the
Hawks/ARINC antenna for the Orbcomm frequency.
The license gives ARINC the exclusive right for three years to use the
Hawks/ARINC antenna for use in monitoring and tracking trailers, refrigeration
monitoring, in-cab tracking, messaging and for long haul trailers using the
Orbcomm Satellite frequency. ARINC shall purchase from IAS a minimum of 5,000
Hawks antennas with an option to purchase 60,000 antennas or more.
-7-
<PAGE>
IAS has also granted to ARINC an exclusive license to manufacture and resell
antenna units with minimum royalty payments as follows:
. $1 Million during the first year
. $5 Million during the second year
. $7.5 Million in the third year
On November 9th, 1999 the Company announced announce that the Vortekx motion to
transfer was denied by the court in West Virginia and the court ordered that the
case be consolidated with the present action with VanVoorhies and West Virginia
University ("WVU") regarding the CTHA patent dispute. The court further ordered
a stay on the claims in the Vortekx/IAS Communications, Inc. case, pending the
resolution of the matters currently before the court in the University of West
Virginia Board of Trustees vs. Kurt VanVoorhies. According to the order the two
motions raised the same legal issues and arise out of the same facts and
procedural posture pending before the court.
The dispute in the WVU action concerns two inventions allegedly conceived during
VanVoorhies' studies as a graduate research assistant at West Virginia
University. VanVoorhies assigned all rights to the first invention to the WVU,
which included an assignment of all future technologies derived from the
technology underlying the first invention. VanVoorhies subsequently declined to
assign to WVU any interest in the second invention. WVU claimed that the second
invention constituted future technology derived from the first invention. For
this reason, WVU claimed that VanVoorhies' assignment of the first invention
obligated VanVoorhies to assign the second invention to WVU, which VanVoorhies
disputed.
As a result of this dispute, WVU and VanVoorhies filed various patent
applications asserting ownership of the technologies arising under the second
invention. Litigation ensued between WVU and VanVoorhies. Reduced to its
essentials, the dispute in this lawsuit between Vortekx & IAS case focuses on
the very same patents and technologies at issue in the Vortekx/WVU action.
Y2K issue
- ---------
In recognition of the Year 2000 risk for information systems, computers,
equipment and products using date sensitive software, the Company has retained a
consultant to assess the risk to the Company, both internally and externally.
However, the Company does not anticipate that its operations will be materially
affected. In the unlikely event that the Company's computers are not Year 2000
compliant, the consultant will remedy any deficiencies.
The Company is monitoring the Year 2000 compliance by external parties to whom
the Company may be dependent, primarily its bank, suppliers and accountants. The
Company is unable to assess the potential damage that may be caused if external
parties are unable to resolve their Year 2000 compliance. If it appears that any
external party to whom the Company is dependent will be unable to resolve its
Year 2000 issue prior to December 31, 1999, the Company has designated personnel
to be responsible for developing a contingency plan to minimize the risk of
business interruption of the Company.
To mitigate any risk to the Company from external parties, the Company has made
every effort to ensure that all current financial, legal and administrative
information on the Company is maintained by the Company, both on paper and on
the Company's computers.
It is not expected that any material costs will be incurred in addressing the
Year 2000 compliance for the Company.
Results of operations for the six months ended October 31, 1999 ("1999")
- ------------------------------------------------------------------------
compared to the six months ended October 31, 1998 ("1998")
- ----------------------------------------------------------
The revenues in 1999 from the sale of CTHA's were $29,472, compared to nil in
1998. The majority of these sales were sales of antennas by way of the Internet
through its agreement with Information-Highway.com, Inc. and the remainder were
direct sales from its Kokomo office direct to end users. The Company is awaiting
the first revenues from a licence agreement with ARINC, discussed above, which
agreement is in its final stages of approvals.
The net loss in 1999 was $213,000 compared to $897,000 in 1998, a decrease of
$684,000. The decrease in net loss was due to a decrease of $295,000 in
administrative expenses and a decrease of $381,000 in research and development
costs.
Administrative expenses decreased because the Company used in-house investor
relations consultants and minimized the number of publications it used to send
the progress reports to the general investment community and the Company did not
issue shares for investor relations services in 1999 whereas in 1998 the Company
incurred $166,000 of such expenditures. Other notable variances were due to one-
time charges in 1998; $12,000 for a business plan; $47,500 was paid as a
financing commission and
-8-
<PAGE>
$65,000 of professional fees were paid in connection with the $500,000
convertible redeemable debenture unit offering. Travel and promotion in 1999
decreased by $44,000 to $12,000 as compared to $56,000 in 1998 as a result of
less travel by the Company's management to Eastern United States.
The Company's expenditures on research and development decreased significantly
due to performing the majority of its development work with in-house consultants
instead of expensive large contractors as used in 1998. The Company has set up
its own facility in Kokomo, Indiana which is run by Larry Hawkes. The Company
also received an $83,000 engineering contribution from ARINC for costs incurred
in developing its specific use antenna. The Company concluded the contract with
West Virginia University which contract totalled $166,000 for the six months
ended October 31, 1998. The Company contracted Emergent Technologies
Corporation, through a joint venture, to develop prototypes to be delivered to
ARINC Incorporated. A total of $227,000 was paid to Emergent during the six
months ended October 31, 1998. No expense has been incurred during 1999 with
respect to Emergent or West Virginia University.
Liquidity
- ---------
During 1999 the Company financed its operating deficiency of $175,000, its
investment in capital assets and patents of $14,000 and cash redemptions of
convertible debentures of $140,000 by receiving subscription proceeds of $97,000
in connection with a private placement. These shares have not been issued as of
December 6, 1999. The Company also received short-term loans from related
parties of $256,000 to October 31, 1999. These loans are non-interest bearing
and due on demand.
The Company received $83,000 from ARINC Incorporated which represents a Fixed
Price Agreement for CTHA Development and Prototypes. This amount reduced related
research and development costs incurred.
The Company has allotted 1,013,600 shares for the potential exercise of warrants
at between $1.50 and $2.85 per share, which, if exercised, could raise in excess
of $2,000,000. As at December 6, 1999 the exercise price was substantially
greater than the price the Company's stock is trading at. It is unlikely that
these warrants will be exercised in the short-term.
The Company has allotted 1,220,500 shares for the potential exercise of stock
options at prices between $0.25 and $2.25 per share. If all options are
exercised the Company could raise in excess of $1,300,000. Of these, a total of
1,070,500 have exercise prices at $1.00 or less.
The Company's working capital deficiency as at October 31, 1999 was $726,000.
The Company continues to finance its operations through funding from private
placement of its equity securities and advances from related companies to the
President of the Company.
The Company's ability to manage payables and to finance future operations and
development is contingent upon receiving funds from selling its equity
securities and continuing to receive loans from related companies.
Equity or debt financing may not be available on terms acceptable to the
Company, or at all. The Company will need additional funds, which it may not be
able to obtain.
-9-
<PAGE>
PART II Other Information
Item 1. Legal Proceedings
- ------- -----------------
None
Item 2. Changes in Securities
- ------- ---------------------
None
Item 3. Defaults upon Senior Securities
- ------- -------------------------------
None
Item 4. Submissions of Matters to a Vote of Security Holders
- ------- ----------------------------------------------------
None
Item 5. Other Information
- ------- -----------------
None
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
27.1 - Financial Data Schedule
-10-
<PAGE>
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.
Dated: December 7, 1999 IAS COMMUNICATIONS, INC.
By: /s/ John G. Robertson
------------------------------
John G. Robertson, President
(Principal Executive Officer)
By: /s/ Jennifer Lorette
------------------------------
Jennifer Lorette, Chief Financial Officer
(Principal Financial Officer)
-11-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 9,421
<ALLOWANCES> 0
<INVENTORY> 14,500
<CURRENT-ASSETS> 68,296
<PP&E> 492,370
<DEPRECIATION> 87,093
<TOTAL-ASSETS> 473,573
<CURRENT-LIABILITIES> 794,386
<BONDS> 35,000
0
0
<COMMON> 4,221,060
<OTHER-SE> 97,000
<TOTAL-LIABILITY-AND-EQUITY> 473,573
<SALES> 29,472
<TOTAL-REVENUES> 29,472
<CGS> 21,206
<TOTAL-COSTS> 21,206
<OTHER-EXPENSES> 213,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,924
<INCOME-PRETAX> (212,961)
<INCOME-TAX> 0
<INCOME-CONTINUING> (212,961)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (212,961)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
