U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended December 31, 1999
-----------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number 0-21279
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THERMACELL TECHNOLOGIES, INC.
----------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
FLORIDA 59-3223708
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
440 Fentress Blvd., Daytona Beach, Florida 32114
------------------------------------------------
(Address of Principal Executive Offices)
(904) 253-6262
--------------
(Issuer's Telephone Number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a
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 Issuer's Common Stock, $.0001 Par
Value, as of December 31, 1999 was 9,883,653.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Index
Page
Part I - Financial Information ----
- ------------------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
December 31, 1999 and September 30, 1999................... 1 - 2
Consolidated Statements of Operations -
Three months ended December 31, 1999 and 1998.............. 3
Consolidated Statements of Cash Flows -
Three months ended December 31, 1999 and 1998.............. 4
Notes to Consolidated Financial Statements................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 7 -12
Part II - Other Information
Item 1. Legal Proceedings............................................. 12
Signatures.................................................... 13
Exhibit 11............................................................ 14
i
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
----------------- -----------------
(unaudited)
<S> <C> <C>
Current assets
Cash $ - $ 60,173
Accounts receivable
Trade, net of allowance for uncollectible accounts
of $177,570 and $194,125 respectively 485,546 388,316
Notes receivable - trade 78,000 93,000
Notes receivable - other 8,452 11,510
Officer advance - 156,234
Other assets - -
Inventories 419,390 541,933
Prepaid expenses and other 42,575 52,576
----------------- -----------------
Total current assets 1,033,963 1,303,742
----------------- -----------------
Property and equipment 1,605,577 1,563,110
Less - accumulated depreciation 673,107 613,908
----------------- -----------------
932,470 949,202
----------------- -----------------
Other assets
Deposits 98,658 55,901
Deferred income tax benefit, net 0 0
Prepaid interest 220,194 164,242
Goodwill, net of accumulated amortization
of $238,453 and $206,453 respectively 1,833,174 1,865,174
Other intangibles, net of accumulated amortization
of $42,820 and $33,620 respectively 712,206 721,406
----------------- -----------------
2,864,231 2,806,723
----------------- -----------------
Total assets $ 4,830,663 $ 5,059,667
================= =================
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
----------------- -----------------
(unaudited)
<S> <C> <C>
Current liabilities
Bank overdraft $ 16,211 $ -
Accounts payable 983,183 998,961
Accrued expenses 137,470 129,290
Accrued payroll and payroll taxes 16,665 31,863
Current maturities of long-term debt
Notes payable 28,004 41,172
Capital leases 96,022 82,026
----------------- -----------------
Total current liabilities 1,277,556 1,283,312
----------------- -----------------
Long-term debt, net of current maturities
Notes payable 1,423,246 1,148,393
Capital lease obligations 215,229 229,225
----------------- -----------------
Total long-term debt, net of current maturities 1,638,476 1,377,618
----------------- -----------------
Total Liabilities 2,916,031 2,660,930
----------------- -----------------
Stockholders' equity
Common stock, par value $.0001
Authorized 20,000,000 shares,
9,883,653 issued and outstanding 988 943
Additional paid-in capital 9,849,602 9,519,168
Deduct notes receivable associated with stockholder loan (39,560) (147,035)
Accumulated deficit (7,841,398) (6,919,339)
Treasury stock (55,000) (55,000)
----------------- -----------------
Total stockholders' equity 1,914,632 2,398,737
----------------- -----------------
Total liabilities and stockholders' equity $ 4,830,663 $ 5,059,667
================= =================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
---------------------------------
December 31, December 31,
1999 1998
-------------- ------------
<S> <C> <C>
Revenue
Sales $ 1,202,194 $ 811,410
Less cost of sales 890,328 573,143
-------------- ------------
Gross profit 311,866 238,267
Selling, general and administrative
expenses 1,151,623 517,460
-------------- ------------
Loss from operations (839,757) (279,193)
-------------- ------------
Other income (expense)
Interest income 0 4,431
Interest expense (82,302) (2,835)
-------------- ------------
.
Total other income (expense) (82,302) 1,596
-------------- ------------
Loss before income taxes (922,059) (277,597)
Income taxes
Deferred income tax benefit 0 55,519
-------------- ------------
Net loss $ (922,059) $ (222,078)
============== ============
Basic loss per common share $ (0.10) $ (0.04)
============== ============
Weighted average number of
common shares outstanding 9,511,153 5,730,568
============== ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
---------------------------------
December 31, December 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Reconciliation of net loss to net cash
used in operating activities
Net loss $ (922,059) $ (222,078)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation 59,199 39,577
Amortization 41,201 36,367
Deferred income tax benefit - (55,519)
Changes in assets and liabilities, net of acquisitions
(Increase) in accounts and notes receivable (79,172) (61,932)
Decrease in inventories 122,543 49,239
Decrease in prepaid and other assets (88,708) 37,576
(Decrease) in accounts payable (15,778) (22,906)
(Decrease) increase in accrued expenses (7,018) 134,768
Common stock issued for services 330,479 -
--------------- ---------------
Net cash used in operating activities (559,311) (64,908)
--------------- ---------------
Cash flows from investing activities
Capital expenditures (42,467) (71,875)
Acquisitions - (1,420,101)
Expenditures for patent, net - (40,000)
--------------- ---------------
Net cash used in investing activities (42,467) (1,531,976)
--------------- ---------------
Cash flows from financing activities
Proceeds from issuance of common stock - 1,650,000
Proceeds from issuance of notes payable 171,000 35,235
Principal payments on notes payable 90,686 -
Principal advances on stockholder loan - (114,134)
Proceeds from payments on stockholder loan 263,709 -
--------------- ---------------
Net cash provided by financing activities 525,394 1,571,101
--------------- ---------------
Net increase (decrease) in cash (76,384) (25,783)
Cash beginning 60,173 67,405
--------------- ---------------
Cash ending $ (16,211) $ 41,622
=============== ===============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
Note 1 - Basis of presentation
The accompanying unaudited consolidated financial statements, which are for
interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited financial statements should
be read in conjunction with the financial statements and the footnotes thereto
contained in Form 10-KSB for the fiscal period ended September 30, 1999 of
ThermaCell Technologies, Inc. (the "Company"), as filed with the Securities and
Exchange Commission.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (which are of a normal and recurring nature) necessary
for a fair presentation of the financial statements. The results of operations
for the three months ended December 31, 1999 are not necessarily indicative of
the results to be expected for the full year.
Note 2 - Basic loss per share calculations
The computation of net earnings (loss) per common share has been based upon the
weighted average number of shares of outstanding common stock, which for the
three month periods ended December 31, 1999 and December 31, 1998 were 9,511,153
and 5,730,568, respectively.
Note 3 - Accounting Change
The Company adopted Statement of Accounting Standards #128, Earnings per Share,
during the quarter ended December 31, 1997. Since the Company has reported a
loss only the basic earnings (loss) per share is thereby reported as the
reporting of diluted loss per share would be anti-dilutive. The inclusion of
converted preferred shares in the calculation of weighted average shares for
diluted earnings per share purposes would be anti-dilutive and per FASB 128,
cannot be included in the financial statements.
Note 4 - Equity Transactions
On October 28, 1999 the Company issued 450,000 shares of common stock to a
consultant in a Regulation S-8 filing. These shares represented compensation for
the services to be performed by the consultant in introducing the Company to
companies that it could either acquire or merge into its operations.
5
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The statements contained in this Report on Form 10-QSB, that are not purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding the Company's
expectations, intentions, or strategies regarding future matters. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof. It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements contained in this Form 10-QSB. The forward-looking
statements contained here-in are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments regarding, among other things, the Company's ability to secure
financing or investment for capital expenditures, future economic and
competitive market conditions, and future business decisions. All these matters
are difficult or impossible to predict accurately and many of which may be
beyond the control of the Company. Although the Company believes that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this form 10-QSB will prove to be
accurate.
GENERAL
The Company was incorporated in Florida in August, 1993, for the purpose of
developing, manufacturing and marketing insulating materials and coatings using
partially evacuated glass microspheres ( "microshells"). The Company's
technology utilizes the insertion of the microshells in various materials and
products that improve the thermal resistive characteristics of such products.
The Company's business strategy is to (i) expand the marketing and distribution
of ThermaCool(TM) paints and coatings, (ii) develop and manufacture the
Company's own microshells and (iii) expand the shell technology to other
products, such as drywall, gypsum board, home siding materials, and space foam
insulation, among others.
On November 30, 1995, the Company acquired the assets of C.F. Darling Paint &
Chemicals, Inc., a paint manufacturing company, located in New Port Richey,
Florida. The Company acquired these assets to produce and develop paints and
coatings for its ThermaCool(TM) product line.
6
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
On March 19, 1998, the Company completed a public offering for 1,375,000 Units,
each Unit consisting of one share of Common Stock, $.0001 par value, and one
Series A Redeemable Common Stock Purchase Warrant, at a price of $4.00 per Unit.
In addition, the underwriter exercised its over-allotment purchase option and
purchased 206,250 additional Units at the initial per Unit public offering price
less the underwriting discounts and commission. The net proceeds from this
offering was more than $4.7 million.
On July 28, 1998, the Company acquired all the outstanding common stock,
representing 100% ownership, of Atlas Chemical Company, a paint manufacturer and
distributor, located in Miami, Florida. The Company acquired this firm for a
larger manufacturing facility to both expand production of paints and coatings
and to obtain an established marketing distribution channel which included major
accounts such as Home Depot, Ace Hardware, among others.
On March 2, 1999, the Company acquired the assets of Ladehoff Paints, Inc., a
paint manufacturer and distributor located in Mesa, Arizona. The total purchase
price was $115,000. This acquisition was classified as a purchase transaction.
The Company acquired T-Coast Pavers/Sealco Systems, Inc. effective December 1,
1999 for 300,000 shares of its common stock valued at $300,000 and an employment
agreement with its founder and key executive. This company provides paver
installation and driveway sealant and coating services primarily to contractors
in Southeast Florida.
The Company acquired American Paints, Inc., a Pompano Beach, Florida paint
manufacturer and distributor, for 572,000 common shares on December 1, 1999.
American Paints' operations were consolidated into the Company's Atlas
manufacturing facility to reduce duplicate costs and increase operating margins.
The Company has sustained significant operating losses since its inception.
Management's strategy of expanding the ThermaCool(TM) product line, developing a
commercially viable manufacturing process for microshells and expansion into new
markets for its shell technology may result in the Company incurring additional
losses due to the costs associated with these strategies. The Company expects to
incur losses until it is able to increase its sales, expand its product line and
increase its distribution capabilities to a sufficient revenue level to offset
ongoing operating and expansion costs.
RESULTS OF OPERATIONS
Three months ended December 31, 1999 compared to three months ended December 31,
1998
Total consolidated revenue for the three months ended December 31, 1999 was
$1,202,194 compared to $811,410 for the same period of 1998, which represents an
increase of $390,784, or 48%. This increase was primarily attributed to the
7
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
revenue contribution of the two acquisitions: American Paints and T-Coast/Sealco
Systems, Inc. for a full three months. In the prior year's period these business
contributed only one month of operating results. The revenues for the Company's
previously existing paint business declined for this recent period over the
prior year ago period. This resulted from the loss of some customers in the
consolidation of operations and the closing of the Mesa, Arizona and Holiday,
Florida locations. For the recent quarter ended December 31, 1999,
T-Coast/Sealco segment of the business contributed approximately 40% of total
revenues.
Gross profit margins were 25.9% and 29.4%, respectively, for the three month
period ended December 31, 1999, as compared to the prior period ended December
31, 1998. This decrease is the result of a change in the mix of paint and
coatings products sold by the Company, and in part, by lower contribution margin
from the America Paints and Sealco acquisitions. Sealco business experienced a
gross profit margin of 16.9% for the recent quarter ended December 31, 1999. The
Company expects that with buying efficiencies and the opportunity to provide all
coating and sealant needed for the Sealco operations, that business' overall
gross profit margin can be improved over time to 25%.
For the three months ended December 31, 1999, total selling, general and
administrative expenses were $1,151,623 as compared to $517,460 for the same
period of the previous year, an increase of $634,163 or 123%. This increase is
the result of higher marketing, staffing, consulting services and other general
expenses associated with the Company's acquisitions and its continuing
operations. The Company has taken steps to reduce duplication of personnel and
is in the process of consolidating its staffing, marketing, and production for
more efficient and effective business operations for its acquisitions. During
this recent quarter, the Holiday, Florida location was closed. With the
expansion of distribution channels provided by the American Paints acquisition,
the Company anticipates future benefit from the sales of products to its
expanded customer base.
The Company continued to experience losses from operations of $839,757 for the
period ended December 31, 1999 as compared to a loss of $279,193 for the same
prior year ago period. This increase in the operating loss over that of the
preceding year's period reflects the lower gross margin contribution from
revenues and the higher S. G & A expense during this period. Management
anticipates that increasing level of sales, including the contribution of its
acquisitions and the production and shipment of its own microshells will result
in improvement in future operating performances and eventually profitable
operations.
8
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
The interest expense for the period ended December 31, 1999 was $82,302 as
compared to the prior year's quarter of $2,835. The higher interest expense for
the current period was the result of a convertible debenture issued to finance
the Company's operations. In the prior year ago period, interest charges were
primarily for vehicle financings.
The basic loss and basic loss per share were $922,059 and $0.10 per share
respectively, for the three months ended December 31, 1999 as compared to a
basic loss and basic loss per share of $222,078 and $.04 respectively, for the
same period in 1998. This loss represents a 315% increase over the basic loss
experienced in the year ago quarter. The loss per share for the period increased
150% over the previous year ago period. In the prior year ago period, there was
a $55,519 deferred income tax benefit while none was applied to the recent
period ended December 31, 1999. The weighted average shares outstanding for the
quarter ended December 31, 1999 was 9,511,153 as compared to 5,730,568 for the
preceding year quarter ended December 31, 1998. Diluted loss per share is not
presented as it is anti-dilutive.
The Company has focused in the recent quarter ended December 31, 1999, on
developing its microshell production at its new Daytona Beach facility. In the
second quarter of this fiscal year shipment of microshells will begin in
significant commercial quantities. The company plans to aggressively market
microshells and those related paint and coatings products. In addition to the
Company's marketing efforts, the two acquisitions of last year will further the
utilization of the Company's paint and coatings production capacity. Management
is optimistic about the benefits of its business strategy.
The Company anticipates improvements in raw material purchasing economies that
will result in cost savings in its purchases within its manufacturing operation.
The Company also anticipates improvement in gross profit margins this fiscal
year resulting from improved purchasing economies.
LIQUIDITY AND CAPITAL RESOURCES
Over its history the Company has largely funded its operations and its product
development activities with funds provided by both issuing securities and from
borrowings. During the recent three months ended, the Company received $171,000
from a debt financing and $263,704 from a stockholder loan repayment. These
funds were used for working capital purposes.
The Company issued 450,000 shares of common stock during October 1999 for
consulting services. These services are to be rendered over the fiscal year and
are to identify companies in which the Company may merge or acquire. Such an
acquisition or merger would assist the Company in more rapidly developing its
prospects toward achieving business growth.
9
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Net cash used in operating activities for the three months ended December 31,
1999 was $559,311 compared to net cash used of $64,908 for the three months
ended December 31, 1998. This increase in cash used by operating activities is
primarily due to a higher net loss and an increase in other assets, particularly
prepaid interest, despite the cash provided by a decrease in inventory of
$122,543 and the use of common stock with a value of $330,479 for services. In
the prior year's period, increases in both accounts payables and inventory
coupled with decreases in accounts payables and accrued expenses contributed to
higher net cash used in operating activities even though the Company incurred a
lower net loss.
Cash used in investing activities for the three months ended December 31, 1999
and the same period in 1998 was $42,467 and $1,531,976 respectively. The major
use of funds for the period ended December 31, 1999 was capital expenditures of
$42,467 for plant facilities outfitting. In the prior year's period, $1,420,101
was expended for two acquisitions-American Paints and T-Coast/ Sealco Systems
and $71,875 represented capital expenditures. In this year ago period, the
Company spent $40,000 on patents. There were no acquisitions in the recent
period as well as any expenditure for patents.
Cash provided by financing activities for the three months ended December 31,
1999 was $525,394 as compared to cash provided of $1,571,101 for the three
months ended December 31, 1998. During the recent quarter ended, The Company
issued a note payable of $171,000 and had $263,709 in shareholder loan
repayments. During the prior year ago period quarter, the Company issued common
stock with an aggregate value of $1,650,000 that included its two acquisitions.
As of December 31, 1999, the Company had net working capital deficit of $243,593
as compared to $20,430 of net working capital at fiscal year ended September 30,
1999. This decrease in net working capital of $264,023 is primarily due to lower
current assets that include inventory and officer advances while the Company's
current liabilities remained approximately the same as at year end. The
Company's current ratio was 0.8 at December 31, 1999, and 1.0 at fiscal year
ended September 30, 1999.
The Company is not presently profitable and continues to fund itself from the
proceeds of securities placements and debt financings. Once the Company achieves
profitability, it will then be in a position to fund itself on an operating
basis.
The Company has restructured its operations with a focused effort on
establishing production capabilities for the manufacture of microshells at its
own facility. This initiative includes the manufacture of certain proprietary
microshell products for two major prospective customers.
10
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Management believes that additional capital will be needed to fund its present
plan to build within this fiscal year a manufacturing facility to produce
microshells for its paint and coating technology products. The Company is
optimistic that such funds will be available from investment or financing
sources to provide for this expansion plan. Should funds not be readily
available, management intends to again defer the building of an expanded
manufacturing facility to a later time when appropriate funding can be arranged.
The Company is in need of funding to provide for its working capital
requirements over the next six months as its present operations are consuming
cash at higher rates. Should such funding not be available, the Company would
have to significantly curtail its present operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
On February 4, 1999, a complaint was filed in the United States District Court,
Middle District of Florida by Mr. Russell Haraburda and Eden Group, Inc. against
John Pidorenko, the Company's president, and the Company for monies purportedly
due for arranging financing for the Company prior to its IPO in March of 1997.
The Company does not believe any monies are due Mr. Haraburda or his firm. In
addition, the Company has been assigned two promissory notes of the Eden Group,
Inc., Mr. Haraburda's firm, that are unpaid. The Company will vigorously defend
itself in this matter and will seek full and complete payment under its
promissory notes from the Eden Group.
On January 5, 1998, NASD Regulation, Inc. announced that a complaint was issued
on December 23, 1997 charging Monroe Parker Securities, Inc. and certain of its
officers with price manipulation and excessive markups in the trading of Steven
Madden, Ltd. and fraud in the sales of securities of United Leisure. Neither
firm is affiliated with the Company. The complaint asks for restitution to
defrauded investors and potential sanctions that may include a fine, suspension,
individual bar, or firm expulsion from the NASD. To date, there have been no
adverse effects upon the Company relating to allegations against Monroe Parker
Securities, Inc.
Monroe Parker Securities, Inc. was the Company's investment banker and
underwriter for the public offering that was concluded on March 19, 1997. The
underwriter was granted an appointee to the board of directors as a condition
for this undertaking. During December 1997, Monroe Parker ceased substantive
market making activities in the Company's common stock. On December 19, 1997,
Stephen Drescher, who was the Monroe Parker designee to the Company's board of
directors, resigned effective that date. Since then, the Company has not
suffered any further consequence of Monroe Parker ceasing operations.
11
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
On February 7, 2000, the Company's listing on the NASDAQ Small Capitalization
Market was suspended for non-compliance with its listing requirements. Since
that time, the Company's common stock has been traded on the OTC Bulletin Board
under the symbol VCLL.
Item 5. Other Information
-----------------
On February 1, 2000, Mr. Donald Huggins resigned as a member of the board of
directors of the Company. His vacancy was filled by the appointment of Mr. Peter
Thomas. Mr. Thomas was also appointed to the audit and compensation committees
of the board of directors.
Item 6. Exhibits and reports on Form 8K
-------------------------------
None
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
ThermaCell Technologies, Inc.
Dated 2/18/00 /s/ John Pidorenko
------------------
John Pidorenko
President and CEO
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
Computation of Loss Per Common Share
<TABLE>
<CAPTION>
For the Three Months Ended
December 31,
---------------------------------
1999 1998
--------------- ---------------
(unaudited) (unaudited)
<S> <C> <C>
Shares outstanding: 9,883,653 7,206,325
Weighted average shares outstanding 9,511,153 5,730,568
Net loss $ (922,059) $ (222,078)
--------------- ---------------
Net loss per common share $ (0.10) (0.04)
=============== ===============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> SEP-30-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 485,546
<ALLOWANCES> 177,570
<INVENTORY> 419,390
<CURRENT-ASSETS> 1,033,963
<PP&E> 1,605,577
<DEPRECIATION> 673,107
<TOTAL-ASSETS> 4,830,663
<CURRENT-LIABILITIES> 1,277,556
<BONDS> 0
0
0
<COMMON> 988
<OTHER-SE> 1,913,644
<TOTAL-LIABILITY-AND-EQUITY> 4,830,663
<SALES> 1,202,194
<TOTAL-REVENUES> 1,202,194
<CGS> 890,328
<TOTAL-COSTS> 1,151,623
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82,302
<INCOME-PRETAX> (922,059)
<INCOME-TAX> 0
<INCOME-CONTINUING> (922,059)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (922,059)
<EPS-BASIC> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
