UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 or
----------------
[ ] 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 000-21659
---------
ENTERTAINMENT DIGITAL NETWORK, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 94-173300
- --------------------------------------------------------------------------------
State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
One Union Street, San Francisco, California 94111
- --------------------------------------------------------------------------------
Address of principal executive offices (Zip Code)
Issuer's telephone number, including area code (415) 274-8800
-------------------
EDnet, Inc.
- --------------------------------------------------------------------------------
Former Name
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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
--- ---
Number of shares outstanding of the issuer's Common Stock as of March 31, 1999:
18,286,836
Transitional Small Business Disclosure Format (Check one): Yes No X
--- ---
<PAGE>
Part I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Entertainment Digital Network, Inc.
CONSOLIDATED BALANCE SHEETS
As of March 31, 1999 and September 30, 1998
ASSETS 03/31/99 09/30/98
(Unaudited) (Audited)
------------ ------------
CURRENT ASSETS
<S> <C> <C>
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 303,187 $ 88,470
Restricted cash . . . . . . . . . . . . . . . . . . . . . 100,000 -
Accounts receivable, net of allowance
for doubtful accounts of $5,308 and $8,500 at
March 31, 1999 and September 30, 1998, respectively . . 516,596 574,800
Accounts and interest receivable - related party. . . . . 42,911 33,008
Inventories . . . . . . . . . . . . . . . . . . . . . . . 219,878 122,986
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . 22,479 4,601
Other current assets. . . . . . . . . . . . . . . . . . . 8,577 826
------------ ------------
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . 1,213,628 824,691
------------ ------------
PROPERTY AND EQUIPMENT, NET . . . . . . . . . . . . . . . . 267,086 380,416
------------ ------------
OTHER ASSETS. . . . . . . . . . . . . . . . . . . . . . . . 1,754 6,455
------------ ------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . $ 1,482,468 $ 1,211,562
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Entertainment Digital Network, Inc.
CONSOLIDATED BALANCE SHEETS
As of March 31, 1999 and September 30, 1998
(continued)
03/31/99 09/30/98
(Unaudited) (Audited)
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable and accrued expenses . . . . . . . . . . $ 515,972 $ 543,104
Deferred revenue. . . . . . . . . . . . . . . . . . . . . 15,672 33,421
Line of credit. . . . . . . . . . . . . . . . . . . . . . 50,000 8,214
Notes payable - related party . . . . . . . . . . . . . . 40,500 240,500
Current portion of capital lease obligations. . . . . . . 13,076 17,147
------------ ------------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . 635,220 842,386
------------ ------------
Capital lease obligations . . . . . . . . . . . . . . . . 11,029 15,058
------------ ------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . 646,249 857,444
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock; par value $0.001 per share
Authorized 50,000,000 shares; 18,286,836 and 16,761,836
issued and outstanding at March 31, 1999 and
September 30, 1998, respectively. . . . . . . . . . . 18,286 16,761
Capital paid in excess of par value of Common Stock . . . 6,906,461 6,755,443
Subscription receivable . . . . . . . . . . . . . . . . . (76,250) -
Secured note receivable . . . . . . . . . . . . . . . . . (283,746) (283,746)
Accumulated deficit . . . . . . . . . . . . . . . . . . . (5,728,532) (6,134,340)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . . . 836,219 354,118
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . . $ 1,482,468 $ 1,211,562
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Entertainment Digital Network, Inc.
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months ended March 31, 1999 & 1998
Six Months Three Months
Ended March 31 Ended March 31
(Unaudited) (Unaudited)
--------------------------------- --------------------------
1999 1998 1999 1998
--------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Equipment sales and installation. . . . . . . . . . . . $ 553,252 $ 419,283 $ 299,398 $ 268,951
Site development and services . . . . . . . . . . . . . 191,661 379,479 - 211,417
Access, Usage, and Hosting fees . . . . . . . . . . . . 1,129,327 1,200,346 569,894 549,408
Other fees. . . . . . . . . . . . . . . . . . . . . . . 43,055 69,453 20,445 30,128
--------------- ---------------- ------------ ------------
1,917,295 2,068,561 889,737 1,059,904
Cost of sales . . . . . . . . . . . . . . . . . . . . . . 1,335,131 1,366,526 630,249 688,422
--------------- ---------------- ------------ ------------
Gross Profit. . . . . . . . . . . . . . . . . . . . . . 582,164 702,035 259,488 371,482
Sales and Marketing expenses. . . . . . . . . . . . . . . 215,168 299,058 78,327 148,336
General and Administrative expenses . . . . . . . . . . . 625,049 456,843 345,949 306,151
--------------- ---------------- ------------ ------------
840,217 755,901 424,276 454,487
Loss from operations. . . . . . . . . . . . . . . . . . (258,053) (53,866) (164,788) (83,005)
--------------- ---------------- ------------ ------------
Other income:
Interest income/(expense) . . . . . . . . . . . . . . . 7,432 (33,461) 7,930 (16,192)
Gain on sale of subsidiary. . . . . . . . . . . . . . . 663,530 - - -
Other income/(expense). . . . . . . . . . . . . . . . . (3,032) 551,078 (2,400) 214,293
--------------- ---------------- ------------ ------------
Total other income, net . . . . . . . . . . . . . . . . 667,930 517,617 5,530 198,101
--------------- ---------------- ------------ ------------
Income/(loss) before provision for income taxes . . . . 409,877 463,751 (159,258) 115,096
Income taxes. . . . . . . . . . . . . . . . . . . . . . . 4,000 2,400 - -
Net income/(loss) . . . . . . . . . . . . . . . . . . . . $ 405,877 $ 461,351 ($159,258) $ 115,096
--------------- ---------------- ------------ ------------
Diluted and Basic Earnings (loss) per share: . . . . . . $ 0.02 $ 0.05 ($0.01) $ 0.01
=============== ================ ============= ===========
Diluted and Basic Number of Shares Outstanding: . . . . . 24,550,062 8,431,450 17,411,836 8,032,899
=============== ================ ============= ===========
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Entertainment Digital Network, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the Six Months ended March 31, 1999 and 1998
03/31/99 03/31/98
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $ 405,877 $ 461,351
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization . . . . . . . . . . 74,479 94,539
Provision for doubtful accounts . . . . . . . . . 4,248 (14,319)
Noncash compensation expenses . . . . . . . . . . - 21,244
Gain from sale of assets - IBS. . . . . . . . . . (663,530) -
Increase in accounts receivable . . . . . . . . . (93,647) (7,575)
Increase in accounts receivable-related party . . (9,903) -
Decrease/(increase) in inventory. . . . . . . . . (96,892) 32,085
Increase in prepaid expenses. . . . . . . . . . . (17,878) -
Increase in other current assets. . . . . . . . . (60,908) (13,451)
Decrease in accounts payable
and accrued expenses. . . . . . . . . . . . . . (122,134) (1,072,329)
Decrease in deferred revenue. . . . . . . . . . . (31,870) (93,069)
------------ ------------
Net cash used by operating activities . . . . . . (612,158) (591,524)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment. . . . . . . . . (83,104) (13,752)
Sale of property and equipment. . . . . . . . . . . - 9,844
Proceeds from sale of assets. . . . . . . . . . . . 1,000,000 495,000
------------ ------------
Net cash provided by investing activities . . . . 916,896 491,092
------------ ------------
Cash flows from financing activities:
Repayment on borrowings . . . . . . . . . . . . . . (308,214) (278,489)
Proceeds from borrowings. . . . . . . . . . . . . . 200,000 437,667
Repayments on capital leases. . . . . . . . . . . . (8,100) (18,705)
Repayment on Settlement of Claim in Equity. . . . . (50,000) -
Issuance of Common Stock . . . . . . . . . . . . . 76,293 888
------------ ------------
Net cash provided/(used) by financing activities. (90,021) 141,361
------------ ------------
Net increase in cash. . . . . . . . . . . . . . 214,717 40,929
============ ============
Cash at beginning of period . . . . . . . . . . . . . 88,470 1,176
------------ ------------
Cash at end of period . . . . . . . . . . . . . . . . $ 303,187 $ 42,105
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
ENTERTAINMENT DIGITAL NETWORK, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
-----------------------
The interim, condensed, consolidated financial statements of Entertainment
Digital Network, Inc. (the "Company") included herein have been prepared in
conformity with generally accepted accounting principles. The principles
applied are consistent in all material respects with those used in the Company's
Transition Report on Form 10-QSB for the transition period July 1, 1998 to
September 30, 1998. The interim financial statements are unaudited but reflect
all normal adjustments which are, in the opinion of management, necessary to
provide fair, condensed, consolidated balance sheets, statements of income and
cash flows for the interim periods presented. The interim financial statements
should be read in conjunction with the financial statements in the Company's
Transition Report on Form 10-QSB for the transition period July 1, 1998 to
September 30, 1998.
2. Consolidation
-------------
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary: Entertainment Digital Network (EDN). Material
inter-company transactions and balances have been eliminated. The Company is
51% owned by Visual Data Corporation ("VDC").
3. Loss per Share
----------------
Basic earnings (loss) per share are computed using the weighted-average
number of shares of Common Stock outstanding during the periods. Diluted
earnings per share are computed using the weighted-average number of common
shares and common share equivalents outstanding during the periods. The
computation of net income (loss) per share was as follows:
<TABLE>
<CAPTION>
Income/(loss) Shares Per Share
Numerator Denominator Amount
------------- ----------- ----------
<S> <C> <C> <C>
Six months ended March 31, 1999:
Operating income/(loss) per share . . . . . . $ (262,053) 17,086,836 Nil
Other income. . . . . . . . . . . . . . . . . 667,930 $ 0.04
Effect of dilutive stock options and warrants 7,463,226
------------- ----------- ----------
Diluted earnings per share. . . . . . . . . . $ 405,877 24,550,062 $ 0.02
============= =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income/(loss) Shares Per Share
Numerator Denominator Amount
------------- ----------- ----------
<S> <C> <C> <C>
Six months ended March 31, 1998:
Operating income/(loss) per share . . . . . . $ (56,265) 7,935,128 Nil
Other income. . . . . . . . . . . . . . . . . 517,616 $ 0.07
Effect of dilutive stock options and warrants 496,322
-------------- ---------- ----------
Diluted earnings per share. . . . . . . . . . . $ 461,351 8,431,450 $ 0.05
============== ========== ==========
</TABLE>
At March 31, 1999, options and warrants for the purchase of 8,733,736 common
shares at prices ranging from $1.00 to $2.50 per share were not included in the
computation of diluted earnings per share as the exercise price was greater than
the average market price of common shares.
4. Secured Note Receivable - Related Party
---------------------------------------
A note receivable with face value of $283,746, due from VDC is part of the
payment resulting from VDC's purchase of 8,653,419 shares of the Company's
Common Stock. VDC has 51% ownership of the Company. The acquired Common Stock
and a second mortgage secure the note. Principal payment of $56,749 plus
interest is due annually commencing July 1, 1999 until July 1, 2003; the note
bears a fixed interest rate of 7% per annum.
5
<PAGE>
At March 31, 1999, VDC owed the Company $27,403 for the purchase of equipment
and $15,508 of accrued interest on the note receivable.
5. Sale of Subsidiary
--------------------
On December 11, 1998, the Company completed the sale of substantially all of the
assets of the Company's wholly-owned subsidiary Internet Business Solutions,
Inc. ("IBS"), a California corporation, to Enterprise Communications Consulting,
Inc., a Washington Corporation ("Buyer"), a wholly-owned subsidiary of
Attachmate Corporation of Bellevue, Washington. The transaction was completed
for a total of $1,000,000, of which $100,000 was deposited into an escrow
account. The balance is to be released in full to the Company in increments upon
the termination of the statute of limitations governing certain potential claims
against IBS or the Buyer connected with the disposition of IBS's assets, or upon
the earlier agreement of the Buyer.
6. Subscription Receivable
------------------------
A subscription receivable in the amount of $76,250 was due from VDC for
exercising 762,500 warrants of the Company's stock. The funds were received on
April 7, 1999.
7. Notes Payable
--------------
On August 4, 1998, a Promissory Note ("Note") in the amount of $200,000 was
executed between the Company and Eric Jacobs, a member of the Company's and
VDC's Board of Directors. VDC owns a 51% share of the Company. The Company
transferred the principal to an interest-bearing Equipment Purchase Repo Account
("Account"). This Account was restricted to solely purchasing equipment to
fulfill existing customer orders. The Note was paid in full on December 30,
1998 and included interest accrued through December 31, 1998.
Notes payable-related party consist of the following:
<TABLE>
<CAPTION>
March 31, Sep 30,
1999 1998
------- --------
<S> <C> <C>
Note payable to Eric Jacobs, a director of VDC and the
Company, with original principal of $200,000 at 12%
interest. The principal balance and accrued interest is due
on August 3, 1999. Accrued interest payable as of September
30, 1998 is $3,814.. . . . . . . . . . . . . . . . . . . . . . - $200,000
Notes payable to an officer and employees, interest at 6% per
annum, uncollateralized. Accrued interest payable as of
March 31, 1999 is $607.50. The notes are subordinated to the
$250,000 credit line discussed below.
$40,500 $ 40,500
------- --------
Total notes payable-related party. . . . . . . . . . . . . . . . $40,500 $240,500
======= ========
</TABLE>
<PAGE>
ENTERTAINMENT DIGITAL NETWORK, INC
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the three months ended March 31, 1999, our revenues were $889,737,
representing a decrease of 16% compared to revenues of $1,059,904 in the
comparable period last year. Revenues for the six months ended March 31, 1999
decreased 7% to $1,917,295 compared to revenues of $2,068,561 in the comparable
period last year. These decreases are primarily due to the sale of our wholly
owned subsidiary IBS, which took place in December 1998 as part of our decision
to re-focus activities on audio/video digital transmission and webcasting
activities. The 16% decrease in revenue in the current quarter resulted from
losing $304,925 in sales from Internet business consulting and hosting fees.
This decrease is offset with increased revenues from audio equipment sales and
the start up of our webcasting services in partnership with P.R. Newswire.
Gross Profit decreased to $259,488 or 29% of sales, in the three months ended
March 31, 1999 compared to $371,482, or 35% of sales, in the comparable period
last year. For the six months ended March 31, 1999 gross profit decreased to
$582,164 or 30% of sales, from $702,035, or 34% of sales in the comparable
period last year. Gross profit for the current quarter and year to date
decreased primarily because of the sale of the assets of IBS, which had
contributed $162,866 and $428,106, respectively to gross profit in those
periods. The loss of IBS's hosting services, which generated higher gross profit
percentages than other services, reduced gross profit percentages for those
periods.
Operating expenses (including Sales & Marketing, and General & Administrative)
decreased to $424,276 in the three months ended March 31, 1999 compared to
$454,487 in the equivalent period last year. During the quarter there was a
reduction of $133,572 in operating expenses due to the sale of IBS. However,
this was offset by non-recurring increases in legal and accounting fees due to
the change of domicile from Colorado to Delaware, and the registration on Form
S-3 of certain shares of Common Stock, filed April 30, 1999. The registration
relates to the offer and sale of up to 2,900,439 shares of Common Stock issued
or issuable to certain third parties upon their exercise of Common Stock
purchase warrants at prices ranging from $0.10 to $1.25 per share. The Company
will not receive proceeds directly from the sale of those shares of Common
Stock, but we expect the exercise of warrants to yield up to $1,731,844 in
proceeds to fund the working capital requirements of our expanded digital audio
and video transmission and webcasting activities. For the six months ended March
31, 1999 operating expenses increased to $840,217 from $755,901 in the
equivalent period last year. There were significant expenditures for the current
six months ended such as: non-recurring legal and accounting costs associated
with the IBS sale, additional year end audit and tax returns due to the change
in fiscal year, re-incorporation, S-3 Registration and the first shareholders'
meeting.
6
<PAGE>
The decrease in other income from $198,101 to $5,530 for the three-month period
ending March 31, 1999 compared to the corresponding period last year was
primarily attributable to the restructuring of accounts payable for $135,000 and
write off of a note payable for $100,000. For the six-month periods ending March
31, 1999, and March 31, 1998, other income increased to $667,930 from $517,617.
The current year to date other income was attributable to the IBS sale. The
prior year to date other income was due to the restructuring of accounts payable
and the gain from the sale of our investment in Breakthrough Software.
The decrease in interest expense and increase in interest income is due to the
restructuring of senior notes on June 30, 1998 and interest income accrued of
$16,287 on both the notes receivable from VDC and the $100,000 in escrow due
from the sale of IBS. This resulted in lowering interest expense from $16,192 to
interest income of $7,930 for the three months ended March 31, 1999 and
decreasing interest expense from $33,461 to interest income of $7,432 for the
six months ended March 31, 1999 compared to the comparable periods in the prior
year.
For the three months ended March 31, 1999, we incurred a net loss of $159,258 or
($0.01) per share based on a weighted-average of 17,411,836 shares outstanding,
which is in line with our forecast. This compares with a net income of $115,096,
or $0.01 per share based on a weighted-average of 8,032,899 shares outstanding
in the prior year for the comparable period. Net income for the six months ended
March 31, 1999 was $405,877, or $0.02 per share based on a weighted-average of
17,086,836 shares outstanding, compared with a net income of $461,351, or $0.05
per share, based on a weighted-average of 8,431,450 shares in the prior year.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
At March 31, 1999, we had an accumulated deficit of $5,728,532 and a positive
net working capital of $578,408. This compares to a March 31, 1998 accumulated
deficit of $6,679,733 and a negative net working capital of $1,195,946. VDC's
investment in Entertainment Digital Network, Inc. and the restructuring of our
accounts and notes payable had a positive impact on working capital and
accumulated deficit. Our working capital improved from a negative $17,695 at
September 30, 1998 to $578,408 at March 31, 1999, due to the sale of IBS's
assets.
We believe we have sufficient working capital to fund our current plan of
operation. We anticipate increasing revenues from the introduction of new
services, including: sales of the Telestream "ClipMail Pro" high quality video
delivery system; video networking services based on high speed bandwidth
connections via DSL and frame relay T1 to the ClipMail Pro systems; and
webcasting services. We have available a $250,000 Line of Credit with Union Bank
of California and several leasing facilities. We also anticipate receiving up to
$1,731,844 in May 1999 from the exercise of warrants in connection with the
registration on Form S-3 of the underlying shares of Common Stock.
7
<PAGE>
READINESS FOR YEAR 2000
We are aware of the issues associated with the programming code in existing
computer systems as the year 2000 approaches. The year 2000 issue relates to
whether computer systems will properly recognize and process information
relating to dates in and after the year 2000. These systems could fail or
produce erroneous results if they cannot adequately process dates beyond the
year 1999 and are not corrected. Many people in the software industry are
uncertain about the potential consequences that may result from the failure of
software to adequately address the year 2000 issue.
We have reviewed the software and hardware we use internally in our support
systems to determine whether they are year 2000 compliant. We are confident that
we have already taken or soon will be able to complete the work required to make
our systems, products and infrastructure year 2000 ready. Most of our software
has already been upgraded by the manufacturer or was recently purchased and is
year 2000 compliant. There are no technological issues in the hardware or
software that we sell or rent to our clients that will be affected by year 2000
issues.
We do not believe that the aggregate cost for the year 2000 issue will be
material, but we cannot predict the effect of the year 2000 issue on many of the
entities with which we transact business. We are evaluating the year 2000
readiness of our consultants, vendors and suppliers. Where we determine that
critical suppliers are not year 2000 ready, we will monitor their progress and
take appropriate actions. In particular, the telephone companies that supply us
with services must be year 2000 ready in order to avoid major billing errors.
Though we may experience some temporary delay in our ability to accurately
rebill customers, we do not foresee any permanent liability, should some error
occur on the part of these suppliers.
DISCLOSURE PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
When used in this Management's Discussion and Analysis, the words "anticipate,"
"estimate," "expect," and similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks and
uncertainties, including, but not limited to, the following: risks associated
with fundraising and our ability to secure resources necessary to fully develop
business products; risks associated with mergers and acquisitions, the nature of
any transaction consummated, and the ability to successfully operate a merged
entity; business conditions in the telecommunications, entertainment,
advertising and Internet-related industries, and the general economy;
competitive factors such as rival networking technology, competing products, and
competitive pricing; risks associated with development, introduction, and
acceptance of new products; our ability to manage rapid growth and attract and
retain key employees; and other risk factors. Actual results may differ
materially from management expectations as discussed here.
8
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) (27) Financial Data Schedule, filed electronically
9
<PAGE>
SIGNATURE
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.
Entertainment Digital Network, Inc.
May 17, 1999 By: __________________
Tom Kobayashi
Chairman and CEO
By: __________________
David Gustafson
President
10
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 403,187
<SECURITIES> 0
<RECEIVABLES> 521,904
<ALLOWANCES> (5,308)
<INVENTORY> 219,878
<CURRENT-ASSETS> 1,213,628
<PP&E> 1,061,172
<DEPRECIATION> (794,087)
<TOTAL-ASSETS> 1,482,468
<CURRENT-LIABILITIES> 635,220
<BONDS> 0
0
0
<COMMON> 18,286
<OTHER-SE> 817,933
<TOTAL-LIABILITY-AND-EQUITY> 1,482,468
<SALES> 0
<TOTAL-REVENUES> 1,917,295
<CGS> 1,335,131
<TOTAL-COSTS> 840,217
<OTHER-EXPENSES> 3032
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 409,877
<INCOME-TAX> 4,000
<INCOME-CONTINUING> 405,877
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405,877
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.02
</TABLE>
