<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended February 28, 1997
[ ] 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 0-27046
QUINTEL ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3322277
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Blue Hill Plaza
Pearl River, New York 10965
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 620-1212
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
--- ---
The number of shares outstanding of the Registrant's common stock is
18,530,644 (as of 4/10/97).
<PAGE> 2
QUINTEL ENTERTAINMENT, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
QUARTER ENDED FEBRUARY 28, 1997
ITEMS IN FORM 10-Q
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to
a Vote of Security Holders N/A
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
QUINTEL ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28, November 30,
1997 1996
ASSETS: (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 12,158,321 $14,140,987
Marketable securities 20,515,410 14,595,724
Accounts receivable, trade 22,755,215 18,030,083
Deferred tax asset 6,385,315 6,961,940
Due from related parties 169,163 644,168
Prepaid expenses and other current assets 2,539,527 2,345,154
------------ -----------
Total current assets 64,522,951 56,718,056
Property and equipment, at cost, net of accumulated depreciation 390,665 344,407
Intangible assets, net 21,258,360 21,967,084
------------ -----------
$ 86,171,976 $79,029,547
============ ===========
LIABILITIES:
Current liabilities:
Accounts payable $ 4,512,302 $ 2,565,383
Accrued expenses 6,389,526 3,019,760
Reserve for customer chargebacks 18,747,510 20,080,903
Due to related parties 632,059 1,478,515
Income taxes payable 2,587,062 4,131,303
------------ -----------
Total liabilities 32,868,459 31,275,864
------------ -----------
Minority interest 19,100 18,750
STOCKHOLDERS' EQUITY:
Preferred stock - $.001 par value; 1,000,000 shares authorized;
none issued and outstanding
Common stock - $.001 par value; authorized 50,000,000 shares; issued
and outstanding 18,475,706 and 18,452,368 shares, respectively 18,476 18,452
Additional paid-in capital 37,532,421 37,406,050
Retained earnings 15,735,547 10,300,150
Unrealized (loss) gain on marketable securities (2,027) 10,281
------------ -----------
Total stockholders' equity 53,284,417 47,734,933
------------ -----------
$ 86,171,976 $79,029,547
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
QUINTEL ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
FEBRUARY 28, February 29,
1997 1996
<S> <C> <C>
Net revenue $ 44,059,812 $ 16,018,571
Cost of sales 30,516,792 12,677,980
------------ ------------
Gross profit 13,543,020 3,340,591
Selling, general and administrative expenses 4,779,142 2,073,374
------------ ------------
8,763,878 1,267,217
Interest expense (18,184) (139,961)
Other income, net 299,461 366,110
Equity in earnings of joint venture 2,437,030
------------ ------------
9,045,155 3,930,396
Provision (benefit) for income taxes 3,609,758 (371,793)
------------ ------------
Net income $ 5,435,397 $ 4,302,189
============ ============
Net earnings per share $ 0.29 $ 0.28
============ ============
Weighted average shares outstanding 18,776,177 15,446,043
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
QUINTEL ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
FEBRUARY 28, February 29,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,435,397 $ 4,302,189
Items not affecting cash:
Depreciation and amortization 740,561 9,639
Reserve for customer chargebacks (1,333,393) 2,227,980
Deferred income taxes 708,966 (2,446,544)
Equity in net earnings of joint venture, net of dividends received (187,030)
Other (221,079)
Changes in assets and liabilities:
Accounts receivable (4,725,132) (3,877,782)
Prepaid expenses and other current assets (194,373) (1,760,639)
Accounts payable 1,946,919 1,587,794
Income tax payable (1,544,241) 2,059,871
Due to related parties, net (371,451) 24,606
Other, principally accrued expenses 3,370,116 945,485
------------ ------------
Net cash provided by operating activities 3,812,290 2,885,569
------------ ------------
Cash flows from investing activities:
Purchases of securities (8,219,121)
Proceeds from sales of securities 2,500,000
Other, principally capital expenditures (202,230) (50,229)
------------ ------------
Net cash used in investing activities (5,921,351) (50,229)
------------ ------------
Cash flows from financing activities:
Proceeds from collection of common stock subscription 20,000
Proceeds from issuance of common stock, net 13,402,075
Distributions to S corporation shareholders (3,000,000)
Principal payments on notes payable to shareholders (1,509,795)
Loans payable, net 650,284
Proceeds from exercise of stock options 126,395
------------ ------------
Net cash provided by financing activities 126,395 9,562,564
------------ ------------
Net (decrease) increase in cash and cash equivalents (1,982,666) 12,397,904
Cash and cash equivalents, beginning of period 14,140,987 3,570,468
------------ ------------
Cash and cash equivalents, end of period $ 12,158,321 $ 15,968,372
============ ============
Non-cash financing activities:
Notes payable to shareholders of undistributed S corporation earnings $ 3,611,135
Contribution of capital from S corporation 575,000
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
QUINTEL ENTERTAINMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL:
The consolidated financial statements for the three month periods ended
February 28, 1997 and February 29, 1996 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim period. The
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report on Form 10-K for the
fiscal year ended November 30, 1996. The results of operations for the
three months ended February 28, 1997 are not necessarily indicative of the
results for the entire fiscal year ending November 30, 1997.
2. EARNINGS PER SHARE:
Net earnings per share have been computed by dividing net income by the
weighted average number of common and common equivalent shares outstanding
during the period, computed in accordance with the treasury stock method.
3. ADVERTISING EXPENSES:
The Company generally expenses advertising costs, which consist primarily
of print, media, production, telemarketing and direct mail related charges,
when the related advertising occurs. For interim purposes, certain
telemarketing and production expenses are deferred and charged to
operations over their expected period of benefit. All such amounts will be
expensed prior to year end. Total advertising expense incurred for the
three months ended February 28, 1997 and February 29, 1996 were
approximately $14,132,000 and $5,552,249, respectively. Included in prepaid
expenses and other current assets is approximately $1,380,000 and
$1,069,700 relating to prepaid advertising at February 28, 1997 and
November 30, 1996, respectively.
4. NEW LAUDERDALE:
On September 10, 1996, the Company acquired the remaining 50% interest in
New Lauderdale, L.C. ("New Lauderdale"). The consolidated financial
statements of the Company include the accounts of New Lauderdale subsequent
to this date. New Lauderdale had previously been accounted for by the
equity method as a 50% owned joint venture.
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
The following is condensed financial data for New Lauderdale:
<TABLE>
<CAPTION>
FEBRUARY 29,
1996
(UNAUDITED)
<S> <C>
Net revenues $22,246,546
Gross profit 5,845,062
Net income 4,874,060
</TABLE>
5. NEWLY ISSUED ACCOUNTING STANDARDS:
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"), which establishes standards for computing and presenting earnings per
share. SFAS No. 128 will be effective for financial statements issued for
periods ending after December 15, 1997. Earlier application is not permitted.
Management has not yet evaluated the effects of this change on the Company's
financial statements.
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," ("SFAS No. 123"). SFAS No. 123, which becomes effective in fiscal
1997, allows companies to measure compensation cost in connection with employee
stock compensation plans using a fair value based method or to continue to use
an intrinsic value based method, which generally does not result in compensation
cost. The Company intends to adopt the disclosure only provisions of the
statement.
7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is a discussion of the financial condition and
results of operations of the Company for the three month periods ended February
28, 1997 and February 29, 1996. It should be read in conjunction with the
interim condensed consolidated financial statements of the Company, the Notes
thereto and other financial information included elsewhere in this report.
Results of Operations
Net revenue for the three months ended February 28, 1997 was
$44,059,812, an increase of $28,041,241, or 175%, as compared to $16,018,571
for the three months ended February 29, 1996. 118% of such increase was
attributable to the Company's acquisition of New Lauderdale, L.C. ("New
Lauderdale") in September 1996. In addition, increases in net revenue
are also attributable to increased call volume to the Company's "900"
number entertainment services (41%), and revenue resulting from a strategic
corporate partnership with AT&T Communications, Inc. ("AT&T") to market AT&T's
long distance products (34%), offset by decreases of sales of the Company's
enhanced voice mail networks ("VM Enhanced Product") (18%). For the three
months ended February 28, 1997, net revenue from the VM Enhanced Product and
basic voice mail services (the "VM services") (collectively, the "VM
products"), "900" entertainment services, the AT&T strategic corporate
partnership and other products approximated 12%, 73%, 13% and 2%, respectively.
For the three months ended February 29, 1996, net revenue of the Company was
attributable exclusively to the VM products and "900" entertainment services,
accounting for approximately 45% and 55% of net revenue, respectively. The
provisions for chargebacks for the three months ended February 28, 1997 were
$15,035,148, an increase of $5,362,187, or 55%, as compared to $9,672,961 for
the three months ended February 29, 1996. This increase is attributable to
increased call volume to the Company's "900" number entertainment services and
the acquisition of New Lauderdale, partially offset by decreased chargebacks
relating to the Company's $19.95 VM Enhanced Product. The provisions for
chargebacks as a percentage of gross revenues decreased from approximately 38%
for the three months ended February 29, 1996 to approximately 25% for the three
months ended February 28, 1997. This decrease is primarily due to the
percentage decrease in chargebacks as they relate to "900" entertainment
services resulting from customer service modifications instituted by one of the
Company's service providers. See "VM Enhanced Product Chargebacks."
8
<PAGE> 9
Cost of sales for the three months ended February 28, 1997 was $30,516,792, an
increase of $17,838,812, or 141%, as compared to $12,677,980 for the three
months ended February 29, 1996. The increase in cost of sales is directly
attributable to increases in service bureau fees and advertising costs
resulting from an increase in net revenue, as well as the inclusion of New
Lauderdale's cost of sales during the three month period ended February 28,
1997. Cost of sales as a percentage of net revenue decreased to 69% for the
three months ended February 28, 1997 from 79% for the three months ended
February 29, 1996. The decrease in the relationship of cost of sales to net
revenue is due to chargebacks, which decreased as a percentage of gross revenue
as discussed in the net revenue section above. Additionally, the Company,
as a result of its increased call volume related to the acquisition of
New Lauderdale, was able to renegotiate certain contract terms with one
of its service providers during the fourth quarter of fiscal 1996,
thereby resulting in additional cost savings.
Selling, general and administrative expenses ("SG&A") for the three months
ended February 28, 1997 were $4,779,142, an increase of $2,705,768, or 131%, as
compared to $2,073,374 for the three months ended February 29, 1996. SG&A as a
percentage of the Company's gross revenue remained constant at 8.1% for
the three months ended February 28, 1997 and February 29, 1996. Included in
SG&A for the three months ended February 28, 1997 is $707,061 of goodwill
amortization relating to the New Lauderdale acquisition and increases in
salaries of approximately $863,000 as a result of the growth of the Company's
operations. Had the Company not incurred this goodwill amortization in the
quarter ended February 28, 1997, SG&A expense as a percentage of gross revenue
would have decreased to 7% as compared to 8.1% in the comparable period in
1996. This decrease is directly attributable to the contribution of New
Lauderdale's lower SG&A expense as a percentage of its gross revenue.
Interest expense decreased by $121,777 or 87%, to $18,184 for the three months
ended February 28, 1997 as compared to $139,961 for the three months ended
February 29, 1996. This decrease is due to the elimination of interest expense
of approximately $72,000, relating to the final S corporation distributions made
during the three months ended February 29, 1996 and the elimination of interest
expense as a result of the Company discontinuing the financing of its accounts
receivable. Accounts receivable financing arrangements remain available, but
are currently not in use. See "Liquidity and Capital Resources".
For the three months ended February 28, 1997, other income was $299,461, a
decrease of $66,649, or 18%, as compared to $366,110 for the three months ended
February 29, 1996. This decrease was attributable to reductions in management
fee income from New Lauderdale offset by interest and gains on the Company's
investments.
For the quarter ended February 29, 1996, the Company recognized equity in
earnings of joint venture of $2,437,030, of which $2,250,000 was distributed to
the Company during such quarter. This reflected the Company's 50% interest in
the net income of New Lauderdale's operations for the three months ended
February 29, 1996. On September 10, 1996, the Company acquired the remaining 50%
interest in New Lauderdale. After the acquisition, the Company commenced
treating New Lauderdale as a subsidiary and including its results of operations
on a consolidated basis in the Company's consolidated financial statements.
The Company's effective tax rate was 40% for the three months ended February
28, 1997. The first quarter of fiscal year ended November 30,
1996 included a tax benefit of approximately $1,782,000 relating to the
Company's conversion to the accrual basis of accounting in connection
with the termination of its S corporation status.
9
<PAGE> 10
The three months ended February 29, 1996 would have reflected a 36% effective
rate had the aforementioned tax benefit not been recognized. The Company's
effective tax rate is higher than the federal statutory rate due to the
addition of state income taxes and certain deductions taken for financial
reporting purposes that are not deductible for federal income tax purposes. The
primary factor contributing to the increase in the effective tax rate in the
first quarter of fiscal 1997 as compared to the first quarter of fiscal 1996 is
nondeductible amortization relating to the New Lauderdale acquisition.
Net income increased to $5,435,397 for the three months ended February 28, 1997
from $4,302,189 for the three months ended February 29, 1996. This increase was
primarily due to an increase in income from operations, partially offset
by the elimination of equity earnings in New Lauderdale and increases
in amortization, salaries and income taxes.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 1997, the Company had working capital of $31,654,492, an
increase of $6,212,300, or 24%, as compared to $25,442,192 at November 30, 1996.
The Company continues to generate strong cash flows from operations, as
indicated by a $3,937,020 increase in marketable securities and cash balances
during the quarter ended February 28, 1997. Historically the Company has
financed its working capital requirements principally through cash flow from
operations and receivables financing. Although not currently dependent on cash
flow from receivables financing, credit lines for this purpose are being
maintained and the Company may avail itself of such financing in the future. See
"Forward Looking Information May Prove Inaccurate".
The Company's primary cash requirements have been to fund the cost of
advertising and promotion. Collections of accounts receivable by the Company's
service providers are remitted net of chargebacks. The Company anticipates
purchasing equipment in connection with the establishment of in-house
telemarketing operations and expanding its customer service department and its
computer database capabilities. The Company currently has no other plans or
material commitments for capital expenditures. Based on currently proposed plans
and assumptions relating to its operations (including the substantial costs
associated with its proposed advertising and marketing activities),
projected cash flows from operations and available cash resources, including, if
necessary, its financing arrangements with service providers, will be sufficient
to satisfy its anticipated cash requirements for at least the next twelve
months. The Company does not currently have any long-term obligations and does
not intend to incur any such obligations in the future. As the Company seeks to
diversify with new telecommunications products and services, the Board of
Directors, may, at its discretion, authorize the use of existing cash reserves,
long term financing or other means to finance such diversification. See "Forward
Looking Information May Prove Inaccurate".
During the fiscal year ended November 30, 1996, the Company formed several
new wholly owned subsidiaries and entered into two new joint venture agreements.
The joint venture agreements require the Company to provide loans to the
ventures in initial amounts of $250,000. Each agreement provides for additional
loans at the Company's discretion. Such loans would bear interest at the rate of
7% per annum and be repaid in installments as a percentage of the venture's
retained earnings or net available cash as specified in each agreement.
Additionally, the Company will also advance $20,000 per month to LaBuick
Entertainment, Inc. for services rendered pursuant to one of the joint venture
agreements. Such advances are deductible from distributions due LaBuick
Entertainment, Inc., under the agreement. The Company expects to be able to fund
such loans and advances from its operating cash flow over the next twelve months
and that such loans and advances, as extended, would not have a significant
effect on the working capital position of the Company. To date, the
11
<PAGE> 12
new subsidiary and joint venture operations have contributed an immaterial
amount to net income and did not impose any significant cash requirements on
the Company. The Company does not anticipate any of these new subsidiaries to
materially alter the working capital or cash requirements of the Company during
the next twelve months. See "Forward Looking Information May Prove Inaccurate".
VM ENHANCED PRODUCT CHARGEBACKS
During the first quarter of fiscal 1996, the Company increased
marketing activities and experienced high enrollments of new customers which
caused the Company to experience a high level of acceptance difficulties with
its VM Enhanced Product. These acceptance difficulties occurred at two levels,
consumer and regional telephone carrier.
At the consumer level, customers did not always relate the VM Enhanced
Product billing description on their telephone bills to the entertainment
service that they purchased. This prompted an increase in customer service
inquiries to both the Company and ESBI, the billing service bureau conduit to
the regional telephone carriers and telephone companies. Accordingly, for the
first quarter of 1996, the Company experienced a higher level of customer
cancellations and chargebacks relating to the $19.95 per month VM Enhanced
Product. The Company no longer markets the $19.95 VM Enhanced Product but
continues to service approximately 61,000 subscribers. The Company modified and
repositioned this product to service the existing customer base primarily
during the second quarter ended May 31, 1996. The Company and ESBI expanded
their customer service departments during the first fiscal quarter of 1996 to
better educate the consumer about the product. Telemarketing efforts for new
products during the second fiscal quarter of 1996 were reduced as the marketing
shift was being accomplished. Although there can be no assurance that these
marketing efforts and changes will continue to be successful, management
anticipates that the marketing shift along with the expansions in customer
service will continue to maintain customer chargebacks for the VM Enhanced
Product at the acceptable levels currently being achieved. Several variations,
including the change to offer customers a basic VM service or theme-related
club membership product, continue to be tested with many tests yielding
positive results. Currently, only $9.95 per month VM Enhanced Products are
being marketed to new customers. The pace of telemarketing and enrollments
has been proceeding gradually. This controlled marketing effort and increased
customer service support, allows the Company to closely monitor chargeback
experience, as well as identify any problems, should they arise, on a
timely basis, so as to
12
<PAGE> 13
not repeat the difficulties encountered during the first quarter of the
fiscal year ended November 30,1996. The VM Enhanced Product is
independent of the Company's "900" number entertainment services and these
difficulties did not impact the "900" number portion of the Company's
business.
The Company intends to continue its promotion of a VM Enhanced Product
or similar voice-mail entertainment services concept as previously discussed.
In addition, recent shifts in marketing and other strategies
have increased the Company's net revenues from strategic corporate partnerships
and "900" number entertainment services. While the Company is pursuing new
VM services and club membership product enrollments, it is possible that
revenues from these products will account for a stable or decreasing portion
of the Company's net revenues in the future. Since any reduction in
VM Enhanced Product contributions to total net revenues are expected to be
more than offset by increases in the Company's net revenues from strategic
corporate partnerships, "900" number entertainment services and other
telecommunications products and services, total net revenues are expected to
increase. However no assurance can be given that these projections
will prove to be accurate. See "Forward Looking Information May Prove
Inaccurate".
FORWARD LOOKING INFORMATION
MAY PROVE INACCURATE
This Quarterly Report on Form 10-Q contains certain forward-looking
statements and information relating to the Company that are based on the
beliefs of Management, as well as assumptions made by and information currently
available to the Company. When used in this document, the word "anticipate,"
"believe," "estimate," and "expect" and similar expressions,as they relate to
the Company, are intended to identify forward-looking statements. Such
statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions,
including those described in this Quarterly Report on Form 10-Q. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or expected. The Company
does not intend to update these forward-looking statements.
13
<PAGE> 14
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
EXHIBIT
NUMBER
3.1 Articles of Incorporation of the Registrant, as
amended (1)
3.2 By-Laws of the Registrant (2)
27.1* Financial Data Schedule
- --------------
* Filed herewith.
(1) Filed as an Exhibit to the Registrant's Registration Statement on Form
8-A, dated October 23, 1995, and incorporated herein by reference.
(2) Filed as an Exhibit to the Registrant's Registration
Statement on Form S-1, dated September 6, 1995 (File No. 33-
96632), and incorporated herein by reference.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the first quarter of the
fiscal year ending November 30, 1997.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUINTEL ENTERTAINMENT, INC.
By:/s/ Jeffrey L. Schwartz
---------------------------
Jeffrey L. Schwartz
Date: April 14, 1997 Chairman and CEO
By:/s/ Daniel Harvey
---------------------------
Daniel Harvey
Principal Financial Officer
Date: April 14, 1997 (Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 12,158,321
<SECURITIES> 20,515,410
<RECEIVABLES> 22,755,215
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 64,522,951
<PP&E> 488,434
<DEPRECIATION> 97,769
<TOTAL-ASSETS> 86,171,976
<CURRENT-LIABILITIES> 32,868,459
<BONDS> 0
0
0
<COMMON> 18,476
<OTHER-SE> 53,284,417
<TOTAL-LIABILITY-AND-EQUITY> 86,171,976
<SALES> 44,059,812
<TOTAL-REVENUES> 44,059,812
<CGS> 30,516,792
<TOTAL-COSTS> 30,516,792
<OTHER-EXPENSES> 4,779,142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,184
<INCOME-PRETAX> 9,045,155
<INCOME-TAX> 3,609,758
<INCOME-CONTINUING> 5,435,397
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,435,397
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
