FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
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 March 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 Number 1-14160
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HelpMate Robotics Inc.
(Exact name of small business issuer as
specified in its charter)
Connecticut 06-1110906
----------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Shelter Rock Lane; Danbury, Connecticut; 06810
----------------------------------------------
(Address of principal executive offices)
(203) 798-8988
--------------
(Issuer's telephone number)
---------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed
since last report)
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 shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the registrant's common stock as of May 6,
1999 is 14,201,402 shares.
Transitional Small Business Disclosure Format (Check One) Yes |_| No |X|
<PAGE>
HELPMATE ROBOTICS INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet as of March 31, 1999 (unaudited) 3
Condensed Statements of Operations for the three months 4
ended March 31, 1999 and 1998 (unaudited)
Condensed Statement of Stockholders' Equity 5
as of March 31, 1999 (unaudited)
Condensed Statements of Cash Flows for the three months 6
ended March 31, 1999 and 1998 (unaudited)
Notes to Condensed Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
PART II. OTHER INFORMATION
SIGNATURE 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
HelpMate Robotics Inc.
Condensed
Balance Sheet (Unaudited)
March 31, 1999
<TABLE>
<S> <C>
Assets
Current assets:
Cash $ 680,509
Accounts receivable, net of allowance for doubtful accounts of $50,000 607,147
Inventory, net of reserve for obsolescence of $170,000 493,112
------------
Total current assets 1,780,768
Installation costs, net of accumulated amortization of $717,883 54,273
Equipment leased to others, net of accumulated amortization of $1,103,151 903,276
Property and equipment, net of accumulated amortization of $863,842 289,008
Deposits 130,160
------------
$ 3,157,485
============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 112,128
Accrued expenses 491,219
Accrued employee benefits 117,546
Current portion of notes payable 252,514
Deferred revenue 191,140
------------
Total current liabilities 1,164,547
Notes payable, less current portion 39,428
------------
Total liabilities 1,203,975
------------
Commitments and contingencies
Stockholders' equity:
Common stock, no par value; 40,000,000 shares authorized; 14,201,402
shares issued and outstanding 19,573,937
Capital surplus 5,232,012
Accumulated deficit (22,852,439)
------------
Total stockholders' equity 1,953,510
------------
$ 3,157,485
============
</TABLE>
See accompanying notes
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Operations (Unaudited)
Three months ended March 31, 1999 and 1998
Three months ended March 31
---------------------------
1999 1998
---- ----
Revenues:
Sales revenues $ 428,020 $ 57,547
Rental revenues 679,733 651,250
Research and development contracts -- 111,177
------------ ------------
Total revenues 1,107,753 819,974
------------ ------------
Cost of revenues:
Cost of sales 111,456 18,362
Cost of rental revenues 414,623 463,214
Cost of research and development contracts -- 111,177
------------ ------------
Total costs of revenues 526,079 592,753
------------ ------------
Gross profit 581,674 227,221
Selling, general and administrative expenses 459,571 508,139
------------ ------------
Operating income (loss) 122,103 (280,918)
Other Income (Expense):
Other income -- 3,349
Interest expense (18,844) (78,381)
Interest income 5,603 12,363
Vendor forgiveness of debt -- 53,795
------------ ------------
Net income (loss) $ 108,862 $ (289,792)
============ ============
Basic and diluted income (loss ) per share $ -- $ (0.04)
============ ============
Weighted average number of shares of common stock
outstanding 14,140,229 6,856,325
============ ============
See accompanying notes
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Stockholders' Equity (Unaudited)
For the three months ended March 31, 1999
<TABLE>
<CAPTION>
Accumulated
Common Stock Capital Surplus Deficit Total
------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $ 16,964,504 $ 5,174,839 $(22,508,439) $ (369,096)
Conversion of notes, accounts payable, and
accrued expenses to common stock 2,544,545 -- -- 2,544,545
Issuance of stock options below fair market value -- 57,173 -- 57,173
Net loss -- -- (452,862) (452,862)
Balance at December 31, 1998 19,509,049 5,232,012 (22,961,301) 1,779,760
Conversion of accrued expenses to common stock 64,888 -- -- 64,888
Net income -- -- 108,862 108,862
------------------------------------------------------------
Balance at March 31, 1999 $ 19,573,937 $ 5,232,012 $(22,852,439) $ 1,953,510
============================================================
</TABLE>
See accompany notes
<PAGE>
HelpMate Robotics Inc.
Statements of Cash Flows (Unaudited)
Condensed
Three months ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Three months ended March 31
---------------------------
1999 1998
--------- ---------
<S> <C> <C>
Operating activities
Net income (loss) $ 108,862 $(289,792)
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Vendor debt forgiveness -- (53,795)
Depreciation and amortization 159,374 195,287
Changes in operating accounts:
Decrease in accounts receivable 195,715 17,986
Increase in inventory (97,137) (111,575)
Increase in other assets -- (27,762)
(Decrease) increase in accounts payable and accrued expenses (66,765) 88,416
Decrease in deferred revenue (76,514) (57,874)
--------- ---------
Net cash provided by (used in) operating activities 223,535 (239,109)
--------- ---------
Investing activities
Installation costs (397) (91,673)
Equipment leased to others 115,200 (5,803)
Purchase of property and equipment (703) --
--------- ---------
Net cash provided by (used in) investing activities 114,100 (97,476)
--------- ---------
Financing activities
Proceeds from issuance of notes -- 222,000
Repayments of notes payable (97,505) (174,040)
--------- ---------
Net cash (used in) provided by financing activities (97,505) 47,960
--------- ---------
Net increase (decrease) in cash and cash equivalents 240,130 (288,625)
Cash and cash equivalents at beginning of period 440,379 807,278
--------- ---------
Cash and cash equivalents at end of period $ 680,509 $ 518,653
========= =========
Supplemental non-cash financing activities:
Conversion of notes, accounts payable, and
accrued expenses to common stock $ 64,888 $ 216,898
========= =========
</TABLE>
See accompanying notes
<PAGE>
HelpMate Robotics Inc.
Notes to Condensed Financial Statements (Unaudited)
March 31, 1999
Basis of Presentation
HelpMate Robotics Inc. ("HelpMate", "HRI", or the "Company"), was incorporated
in May 1984. The Company is primarily engaged in the design, manufacture and
sale of the Company's flagship product, the HelpMate(R) robotics courier system,
a trackless robotic courier used primarily in the healthcare industry to
transport materials. The Company derives revenue from three principal sources:
rentals and sales of HelpMates; sales of robotic components such as LabMate,
LightRanger and BiSight and from research and development contracts.
Historically, the Company has been dependent upon sources other than operations
to finance its working capital requirements. These sources include loans and/or
investments from stockholders and their affiliates, private placements of its
debt and equity securities.
The Company continues to actively seek additional financing alternatives in
order to strengthen its liquidity in the short term. Although the Company has
identified some potential sources of such financing, the Company has no current
commitments or agreements with respect to such and there can be no assurance
that any additional financing will be available to the Company on acceptable
terms, or at all. Such alternatives include, but are not limited to Financed
Rental transactions similar in nature to that entered into with LTI; (including
senior or subordinated debt). Further, additional equity financing may involve
substantial dilution of the stock ownership of the Company's existing
stockholders. Moreover, financial or other covenants imposed by future financing
sources might further adversely affect the Company's ability to pay dividends
and management's ability to control the Company. Additionally, by transferring
the title and rental agreements to a third party in Financed Rental transactions
for an immediate cash payment, the Company could lose all or a portion of its
opportunity to benefit from ongoing rentals in the future or from the residual
value of the units upon the expiration of the rental agreements. Finally, no
assurances can be given that any such financing will provide sufficient cash
required for the Company to attain an operating revenue stream of cash
sufficient to support the Company's continued operations. It is also not
anticipated that current stockholders will provide any additional financing.
The Company is liable for the payment of unpaid taxes not remitted by the
Company's former payroll company to the Internal Revenue Service as well as
interest and penalties assessed, if any. The Company has calculated these unpaid
taxes to approximate $1,000,000 exclusive of interest and penalties. (See
Management's Discussion and Analysis - Liquidity and Capital Resources)
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The matter discussed above raises substantial
doubt about the Company's ability to continue as a going concern.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Rule 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring accruals, considered necessary for a fair presentation have been
included in the accompanying unaudited financial statements. Operating results
for the three month period ended March 31, 1999 are not necessarily indicative
of the results that may be expected for the full year ending December 31, 1999.
For further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis
General
The Company develops, manufacturers and markets mobile robotic systems, which
are distinguished by their ability to navigate autonomously without the need for
fixed tracks or guide wires. The Company accomplishes this by employing state of
the art sensor technology, wireless radio and proprietary software to the
guidance of battery-powered vehicles of its own design. So equipped, these
autonomous vehicles can navigate from point to point, avoid stationary and
moving obstacles (including people), make almost instantaneous stops when
necessary, summon elevators to travel between floors, announce their arrival at
destinations, signal closed doors to open, and maintain communications with a
centrally located computer.
The Company also continues to sell, on a limited basis, components of its
autonomous mobile robotics technology to universities and other research
facilities, and has licensed some of its technologies for use in floor cleaning
and automated prescription filling applications. The Company also engages in
research and development contracts in the area of mobile robotics technology.
Liquidity and Capital Resources
The Company believes the opportunity to establish the HelpMate robot as a
flexible, cost-efficient and preferred method for transporting materials within
hospitals and other healthcare facilities remains significant. Although the
Company does not presently have specific plans to purchase parts for builds of
new HelpMate robots, the Company will continue to maintain a sales presence in
the marketplace and book orders in anticipation of another release of HelpMate
units for production. Therefore, while the Company's near-term objective is to
stabilize and enhance its business at the level of the current customer base, it
will actively pursue additional means of financing that would be necessary to
resume expansion of its original aggressive marketing plans.
The remaining backlog at March 31, 1999 is scheduled to be installed and
operational by mid year. At that point, the Company expects to have 72 robots on
rental in its US customer base, providing a stream of on-going revenues. The
two-armed, mobile, robot project under contract to NASA was completed and
delivered to NASA in September, 1998.
The Company's near-term objective is to stabilize its business at the level of
its current customer base while seeking additional financing necessary to resume
original marketing plans.
As a result of the termination of the Otis agreement, the Company will receive
seven robots from Otis during fiscal 1999 at a cost of $1 each. These robots
will be included in the Company's marketing plan. In addition, during the third
and fourth quarters of 1999 the Company has the option to repurchase up to nine
robots, which are currently rented to hospitals, from HTLP for an aggregate of
$81,000. Assuming these rentals continue, the Company estimates that these
robots would generate approximately $100,000 in rental revenue in 1999. Also,
the Company believes it has in inventory most of the parts necessary to perform
routine maintenance and repairs on its rental robots in 1999.
The Company is operating at slightly below a cash break-even level and
management believes that at the Company's current level of operations, it will
have sufficient cash to maintain operations through year end.
The Company continues to actively seek additional financing alternatives in
order to strengthen its liquidity situation in the short term. Although the
Company has identified some potential sources of such financing, the Company has
no current commitments or agreements with respect to such and there can be no
assurance that any additional financing will be available to the Company on
acceptable terms,
<PAGE>
or at all. Such alternatives include, but are not limited to Financed Rental
transactions similar in nature to that entered into with Leasing Technologies
International, Inc. ("LTI"); private placement of the Company's securities in
the United States or abroad; and/or mezzanine type financing (including senior
or subordinated debt). Further, additional equity financing may involve
substantial dilution of the stock ownership of the Company's existing
stockholders. Moreover, financial or other covenants imposed by future financing
sources might further adversely affect the Company's ability to pay dividends
and management's ability to control the Company. Additionally, by transferring
the title and rental agreements to a third party in Financed Rental transactions
for an immediate cash payment, the Company could lose all or a portion of its
opportunity to benefit from ongoing rentals in the future or from the residual
value of the units upon the expiration of the rental agreements. Finally, no
assurances can be given that any such financing will provide sufficient cash
required for the Company to attain an operating revenue stream of cash
sufficient to support the Company's continued operations. It is also not
anticipated that current stockholders will provide any additional financing.
In October 1998 the Company announced that it is conducting an investigation to
determine the extent to which it has been defrauded by its former payroll
company. The payroll company, KPM, Inc., of Brookfield, Connecticut, did
business under the names Payroll Express and Compusystems. Based upon the
Company's preliminary investigation, the Company believes that KPM
misappropriated Company funds which KPM was required to pay to the Internal
Revenue Service with respect to Company employment taxes. As part of its
investigation, the Company has discovered that copies of the tax returns
provided by KPM to the Company differ materially from the actual returns which
KPM filed on the Company's behalf with the IRS. KPM was engaged as the Company's
payroll service from the late 1980's until August 1998. KPM filed for bankruptcy
in July 1998.
The Company understands from published reports that KPM may have similarly
misappropriated funds from a number of other KPM customers and that IRS Criminal
Investigation Division and the office of the United States Attorney are
currently investigating KPM.
Under the Internal Revenue Code, the Company is liable for the payment of these
unpaid taxes as well as interest and penalties assessed, if any. The Company has
calculated these unpaid taxes to approximate $1,000,000 exclusive of interest
and penalties. The Company anticipates that it will be able to negotiate a
settlement with the Internal Revenue Service not to exceed $150,000 and
therefore has recorded this amount in accrued expenses and selling, general and
administrative expenses in its 1998 financial statements. This amount remains
accrued at March 31, 1999.
The Company believes that this tax liability may have a material and adverse
affect on the Company's business, its financial condition and on the results of
its operations. The Company has taken the following actions; (a) filed a claim
in the KPM bankruptcy proceedings; (b) filed a claim under the Company's
insurance policy; the claim was denied; and (c) entered into discussion with the
Internal Revenue Service regarding a compromise of the Company's liability for
these employment taxes. In addition, the Company may need to use its available
cash and future revenues to liquidate its tax liability.
The Company is continuing to investigate this matter and expects to cooperate
fully with the ongoing IRS and United States Attorney investigations of KPM.
Although the accompanying financial statements have been prepared assuming that
the Company will continue as a going concern, failure to reach a compromise on
this matter on terms favorable to the Company raises substantial doubt about its
ability to continue as a going concern.
<PAGE>
Results of Operations
Revenues
Total revenues before research and development contracts increased by $398,955
from the quarter ended March 31, 1998 compared to the quarter ended March 31,
1999. Rental revenue increased by $28,482 or 4% while sales revenues increased
by $370,473 or 644%. The Company also earned revenues and incurred costs from
research and development contracts of $111,177 in 1998.
The total rental fleet at March 31, 1999 has decreased to 69 units due primarily
to the sale of three rental robots and the return of two robots. The increase in
sales revenues was attributable to an increase in sales of component products to
universities and researchers around the world and the sale of three HelpMates
compared to the quarter ended March 31, 1998, where no HelpMates were sold.
Cost of Revenues
Cost of revenues before research and development contracts increased $287,778
from the quarter ended March 31, 1998 compared to the quarter ended March 31,
1999. The increase in cost of revenues reflects the increase in sales revenues
discussed above.
Gross Profit
For the quarter ended March 31, 1999, gross profit increased $354,452 or 156%
for the quarter ended March 31, 1998. The increase in gross profit percentage
and dollars for the quarter reflects the sale of three robots, coupled with the
fact that several of the Company's rental units are now fully depreciated.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by $8,569 or 2% from the
quarter ended March 31, 1998 compared to the quarter ended March 31, 1999. The
decrease reflects the Company's on-going efforts to control costs.
Interest Expense and Interest Income
Net interest expense decreased $52,777 from the quarter ended March 31, 1998
compared to the quarter ended March 31, 1999. The decrease reflects the
conversion of certain long-term obligations and interest thereon to equity in
1998.
Net Income/Loss
The Company had net profit from operations of $108,862 for the period ended
March 31, 1999 compared to a loss of $289,792 for the quarter ended March 31,
1998. The income for the three months ended March 31, 1999 reflects the sale of
three robots as described above. Although the decrease in staffing and sales and
marketing expenses have reduced losses in fiscal 1998 and the first quarter of
1999, the Company anticipates that such losses will continue until the volume of
sales and rentals of HelpMates necessary to cover overhead expenses is achieved.
As noted above, the overall profitability and cash flow of the Company is highly
dependent upon its mix of robot rentals and robot sales (i.e., more robot
rentals than sales results in larger losses and a quicker depletion of cash).
Earnings (Loss) Per Share
Earnings (loss) per share of common stock for the quarter ended March 31, 1999
and 1998 was $0.00 and ($0.04), respectively. Basic and diluted earnings (loss)
per common share is computed according to SFAS 128. It is based on the weighted
average number of common shares and common stock equivalent shares outstanding
during the period, as adjusted for the stock split that occurred in conjunction
with the initial public offering. Shares from the assumed exercise of options
and warrants granted by the Company have been included in the computations of
earnings per share for all periods unless their inclusion would be
<PAGE>
antidilutive.
Other
For the foreseeable future, the Company does not anticipate paying dividends and
the Company anticipates retaining any earnings to fund its operations. Moreover,
the ability of the Company to pay dividends is subject to contractual
restrictions through September 2001. Specifically, during that period, the
Company may not, unless otherwise approved by one of its lenders, directly or
indirectly declare, order, pay or reserve any sum or property for the payment of
any dividend or other distribution on the Company's capital stock until such
time as the Company has achieved a net profit for three consecutive fiscal
quarters.
Income Taxes
The Company accounts for income taxes in accordance with Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes" ("SFAS 109"),
SFAS 109. The Company's net operating loss carry forwards of approximately $18.6
million at December 31, 1998 expire during the years 1999 through 2013. The
related deferred tax asset has been fully reserved because the ability of the
Company to realize a future tax benefit from its net operating loss carry
forwards may be limited.
Inflation
The Company does not believe that the relatively moderate levels of inflation
which have been experienced in the United States has had or will have a
significant effect on its revenues or operations.
Year 2000 Readiness
The Year 2000 issue affects computer and information technology ("IT") systems,
as well as non-IT systems which include embedded technology such as
micro-processors and micro-chips that have date sensitive programs that may not
properly recognize the year 2000. Systems that do not properly recognize such
information could generate inaccurate date or cause a system to fail, resulting
in business interruption. The Company is currently implementing a plan to
provide measured assurances that its computer and IT-systems and non-IT systems,
including analytical instruments and equipment, and those of third parties which
have a material relationship with the Company are or will be compliant.
The Company expects to complete a comprehensive inventory and assessment of its
existing IT and non-IT systems and those of third parties in April 1999.
Assessment will include identifying critical systems - internal and external
(including third parties) - in order to formulate a remediation and verification
plan. The Company currently believes that remediation and verification, which
include obtaining written assurances from key vendors and suppliers, as well as
testing, will be complete by July 1999. The Company has completed its testing of
its flagship product, the HelpMate robotic courier system, and determined that
it is year 2000 compliant.
The Company believes, based on preliminary information, that the costs
associated with remediation and verification to become year 2000 compliant will
not have a material adverse impact on the Company's financial position, results
of operations, or cash flow.
Although the Company has taken steps to address the year 2000 issue, there can
be no assurance that the failure of the Company and/or its material third
parties to timely attain year 2000 compliance or that the failures and/or the
impacts of broader compliance failures by telephone, mail, data transfer or
other utility or general service providers or government or private entities
will not have a material adverse effect on the Company. Further, based on the
information available, the Company cannot conclude that any failure of the
Company or third parties to achieve Year 2000 compliance will not adversely
effect the Company.
<PAGE>
Forward Looking Statements
Statements made in this report regarding (a) the projection of revenues, income,
earning per share, capital expenditures, dividends or other financial items, (b)
the plans and objectives of management for the Company's future operations, (c)
the future economic performance of the Company, and (d) statements regarding the
assumptions underlying or relating to the foregoing items are forward-looking
statements. Forward-looking statements are contained in this report, including
under the sections entitled "Basis of Presentation"; -- "Management's Discussion
and Analysis -- General; -- Liquidity and Capital Resources - Net Income/Losses;
and -- Other." There are important factors that could cause the actual results
to differ materially from those in the forward-looking statements. These
important factors include the following: (a) if the mix of robot rentals versus
sales changes; (b) if there are substantial returns of robots currently on
rental or if the Company is unable to place returned robots with new customers;
(c) if there is a substantial reduction in the aggregate number of hours for
which robots are rented; (d) if existing orders in backlog are canceled; (e) if
the Company's own order/installation forecast changes; (f) if the Company is
unable to purchase the robots from HTLP; (g) if the Company is unable to sustain
its current level of operations;(h) if the Company's financial condition
negatively impacts the Company's reputation in the marketplace and consequently
negatively impacts order receipts; (i) if the Company is unable in the
foreseeable future to secure additional financing; (j) the Company is unable to
reach an agreement with a new strategic marketing partner in Europe; (k) if
customers or vendors have year 2000 issues which adversely affect the Company;
and (l) the impact of the payroll company matters described in "Liquidity and
Capital Resources."
<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. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned , thereunto duly
authorized.
HelpMate Robotics Inc.
Date: May 12, 1999 /s/ Joseph F. Engelberger
-------------------------
Joseph F. Engelberger, President.
Chief Executive Officer and Principal
Financial and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 680,509
<SECURITIES> 0
<RECEIVABLES> 667,147
<ALLOWANCES> 50,000
<INVENTORY> 493,112
<CURRENT-ASSETS> 1,780,768
<PP&E> 3,931,433
<DEPRECIATION> (2,284,876)
<TOTAL-ASSETS> 3,157,485
<CURRENT-LIABILITIES> 1,164,547
<BONDS> 0
0
0
<COMMON> 19,573,937
<OTHER-SE> (17,620,427)
<TOTAL-LIABILITY-AND-EQUITY> 3,157,485
<SALES> 428,020
<TOTAL-REVENUES> 1,107,753
<CGS> 111,456
<TOTAL-COSTS> 526,079
<OTHER-EXPENSES> 459,571
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,844
<INCOME-PRETAX> 108,862
<INCOME-TAX> 0
<INCOME-CONTINUING> 108,862
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,862
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
