<PAGE>
FORM 10-Q SB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-20947
ON-SITE SOURCING, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1648470
-------- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1111 N. 19TH STREET, SUITE 600, ARLINGTON, VA 22209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 276-1123
------------------
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
----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 31, 1998.
COMMON STOCK 0.01 PAR VALUE NUMBER OF SHARES
--------------------------- ----------------
NO CLASS 4,846,669
PREFERRED STOCK 0.01 PAR VALUE
------------------------------
NO CLASS NONE
<PAGE>
ON-SITE SOURCING,INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION. Page No.
<S> <C>
Item 1. Financial Statements
Balance sheets -
June 30, 1999 and December 31, 1998 3
Statements of Operations -
Three and six months ended June 30, 1999 and 1998 4
Statements of Stockholders Equity
Six months ended June 30, 1999 and 1998 5
Statements of Cash Flows -
Three and six months ended June 30, 1999 and 1998 6
Condensed notes to financial statements 7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 10-12
PART II. OTHER INFORMATION
SIGNATURES 12
</TABLE>
Page 2 of 12
<PAGE>
ON-SITE SOURCING, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited
June 30, December 31,
1999 1998
ASSETS
-------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ -- $ --
Accounts receivable, net 6,188,159 5,922,027
Prepaid supplies 540,151 449,366
Prepaid expenses 280,755 136,758
------------ ------------
Total current assets 7,009,064 6,508,151
Property and equipment, net 4,241,707 4,367,996
Other assets, net 57,499 75,062
------------ ------------
11,308,270 10,951,209
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 1,862,817 $ 2,018,248
Line of Credit 928,000 141,345
Accrued and other liabilities 428,551 694,334
Current portion of long-term debt 608,321 472,824
Provision for income taxes, current -- --
------------ ------------
Total current liabilities 3,827,689 3,326,751
Long-term debt net of current portion 764,640 1,169,454
Deferred rent 121,911 121,911
Provision for Income taxes, net of current portion --
Deferred taxes 197,182 197,182
Commitments and contingencies -- --
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 20,000,000 shares authorized
4,851,669 and 4,824,669 shares issued and outstanding 48,517 48,247
Preferred stock,$.01 par value, 1,000,000 shares
authorized, no shares issued and outstanding -- --
Subscription receivable (50,400) (50,400)
Additional paid in capital 6,469,921 6,432,691
Treasury stock (5,000 shares of common stock at cost) (25,000) (25,000)
------------
Accumulated Earnings (Deficit) (46,189) (269,627)
------------ ------------
$ 6,396,848 $ 6,135,911
------------ ------------
11,308,270 10,951,209
------------ ------------
</TABLE>
See notes to financial statements
Page 3 of 12
<PAGE>
ON-SITE SOURCING, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---------------- -------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Revenue $ 12,921,957 $ 11,448,259 $ 6,591,361 $ 5,701,444
Costs and expenses
Cost of sales 9,892,506 10,167,326 4,956,717 5,069,489
---------------- -------------- ----------------- ----------------
3,029,451 1,280,933 1,634,644 631,955
---------------- -------------- ----------------- ----------------
Selling expense 1,069,805 1,284,074 574,533 638,904
Administrative expense 1,711,364 1,332,481 911,651 698,969
---------------- -------------- ----------------- ----------------
2,781,168 2,616,556 1,486,183 1,337,873
--------------------------------- ----------------- ----------------
Earnings from operations 248,283 (1,335,623) 148,461 (705,918)
Other income (expense)
Other income 67,182 172,057 43,500 80,745
Other expense (92,027) (75,291) (46,743) (36,338)
---------------- -------------- ----------------- ----------------
(24,845) 96,766 (3,243) 44,408
---------------- -------------- ----------------- ----------------
Earnings (Loss) before income taxes 223,438 (1,238,856) 145,218 (661,510)
Income tax (benefit)expense - (450,500) (231,500)
---------------- -------------- ----------------- ----------------
Net Earnings (Loss) $ 223,438 $ (788,356) $ 145,218 $ (430,010)
---------------- -------------- ----------------- ----------------
Basic earnings (loss) per common share $ 0.05 $ (0.16) $ 0.03 $ (0.09)
Diluted earnings per share $ 0.05 $ N/A $ 0.03 $ N/A
</TABLE>
See notes to financial statements
Page 4 of 12
<PAGE>
<TABLE>
<CAPTION>
Additional Treasury
Common Common Paid in Subscriptions Stock Retained
Shares Stock Capital Receivable (COMMON) Earnings Total
--------- ---------- ---------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 4,824,669 $ 48,247 $6,432,691 $ (50,400) $ (25,000) $ (269,628) $6,135,910
---------- ---------- ---------- ---------- ---------- ---------- ----------
Sale of common stock 27,000 270 37,230 37,500
Net Income 223,438 223,438
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ----------
Balance at June 30, 1999 4,851,669 $ 48,517 $6,469,921 $ (50,400) $ (25,000) $ (46,190) $6,396,848
---------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
Additional Treasury
Common Common Paid in Subscriptions Stock Retained
Shares Stock Capital Receivable (COMMON) Earnings Total
--------- ---------- ---------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 4,802,221 $ 48,022 $6,367,379 $ (50,400) - $ 727,986 $7,092,987
---------- ---------- ---------- ---------- ---------- ---------- ----------
Sale of common stock 17,448 174 65,362 65,536
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss (788,356) (788,356)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at June 30, 1998 4,819,669 $ 48,196 $6,432,741 $ (50,400) - $ (60,370) $6,370,167
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
Page 5 of 12
<PAGE>
ON-SITE SOURCING, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net earnings (loss) $ 223,438 $ (788,356) $ 145,218 $ (430,010)
--------------- -------------- --------------- ---------------
Adjustments to reconcile net earnings to net cash
(used in) provided by operations
Depreciation and amortization 512,207 482,840 216,140 256,662
Loss (gain) on disposition of equipment - -
Changes in assets and liabilities
Increase in accounts receivable, net (266,132) (603,744) (707,124) (387,002)
Increase in prepaid supplies (90,785) (47,807) (17,712) (3,675)
(Increase) decrease in prepaid expenses (143,997) 42,798 (83,944) (20,566)
(Increase) decrease in other assets 17,563 39,328 127,090 34,562
Increase in accounts payable - trade (155,431) (349,239) 345,526 (236,191)
Increase in accrued and other liabilities (265,783) 95,238 (134,197) 249,288
Increase (decrease) in deferred rent - - - -
Increase (decrease) in provison for income taxes - (416,557) - (231,500)
Increase (decrease) in deferred taxes - (33,943) - -
--------------- -------------- --------------- ---------------
Total Adjustments (392,357) (791,086) (254,221) (338,422)
--------------- -------------- --------------- ---------------
Net cash provided by (used in) operations (168,920) (1,579,442) (109,004) (768,432)
--------------- -------------- --------------- ---------------
Cash flows from investing activities
Capital expenditures (385,919) (838,782) (185,700) (301,081)
--------------- -------------- --------------- ---------------
Net cash used in investing activities (385,919) (838,782) (185,700) (301,081)
--------------- -------------- --------------- ---------------
Cash flows from financing activities
Proceeds from sale of common stock and
exercise of warrants 37,500 65,535 37,500 5,550
Proceeds of long-term debt agreements - 316,000 - 316,000
Payments under long-term debt agreements (269,317) (205,014) (135,434) (99,509)
Net borrowings (payments) under line of credit agreement 786,655 751,000 392,638 251,000
--------------- -------------- --------------- ---------------
Net cash provided by financing activities 554,838 927,521 294,704 473,041
--------------- -------------- --------------- ---------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (0) (1,490,702) (0) (596,472)
Cash and cash equivalents, beginning - 1,490,702 - 596,472
--------------- -------------- --------------- ---------------
Cash and cash equivalents, ending $ (0) $ (0) $ (0) $ (0)
--------------- -------------- --------------- ---------------
--------------- -------------- --------------- ---------------
</TABLE>
Page 6 of 12
<PAGE>
ON-SITE SOURCING, INC.
Condensed Notes to Financial Statements
(unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JUNE 30, 1999
- --------------------------------------------------------------------------------
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in
the annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not
misleading.
In the opinion of management, the accompanying condensed financial
statements reflect all necessary adjustments and reclassifications that are
necessary for fair presentation for the periods presented. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and the notes filed in the Company's Annual Report on
Form 10-KSB. The results of operations for the six months ended June 30,
1999 are not necessarily indicative of the results to be expected for the
full year.
REVENUE RECOGNITION
Revenue from facilities management is recognized based on monthly fixed fees
and, in certain cases, variable per copy fees, as contained in facilities
management agreements. Revenue from reprographic and imaging services is
recognized on a per copy or image basis upon completion of the services.
Revenue from information technology services is billed on an hourly basis.
PROPERTY AND EQUIPMENT
Property and equipment consists of copy center equipment, office furniture
and fixtures, and delivery equipment. Depreciation is provided for in
sufficient amounts to relate the cost of depreciable assets to operations
over their estimated service lives, ranging from two to fifteen years.
During 1999, management determined that the useful life of certain equipment
was longer than originally estimated. A change in accounting estimate was
recognized to reflect this decision, resulting in an increase in net income
of $82,784 for the three months ended June 30, 1999. The straight-line
method is followed for financial reporting purposes. Accelerated methods
are used for tax purposes.
INCOME TAXES
The provision for income taxes presented in the statements of earnings is
based upon the estimated effective tax rate for the year, and is largely
determined by management's estimate as of the interim date of projected
taxable income for the entire fiscal year.
Page 7 of 12
<PAGE>
ON-SITE SOURCING, INC.
Condensed Notes to Financial Statements--Continued
(unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JUNE 30, 1999
- --------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE
Basic earnings per share is calculated using the average number of shares
outstanding and excludes dilution. Diluted earnings per share is computed on
the basis of the average number of shares outstanding plus the effect of
outstanding options using the "treasury stock method". Prior year earnings
per share have been restated to conform to this method.
NOTE B--CREDIT FACILITIES
The Company entered into an agreement for a working capital line of credit
with a financial institution for $2,500,000. The line of credit bears
interest at the financial institution's prime rate or the 30 day LIBOR rate
plus 2.25%, payable monthly. Any remaining principal balance and accrued
interest is due at the maturity date of April 30, 2000.The line of credit is
secured by certain assets of the Company, including accounts receivable and
certain fixed assets. As of June 30, 1999 there were advances made under the
line of credit of $928,000.
During 1997, the Company entered into a term note with a financial
institution to provide $1,100,000 to refinance certain capitalized lease
obligations. The note is payable in 48 monthly installments, bears interest
at the rate of 9.02%, and matures on April 30, 2001. The note is
collateralized by specific equipment and is subject to certain financial
covenants. The balance of the term note at June 30, 1999 was $481,250.
During 1997, the Company financed certain equipment purchases of
approximately $361,000 with notes with terms of 36 to 48 months and interest
rates of 5.0% to 9.7%. During 1998 the Company financed additional equipment
purchases under similar terms. The balance of these notes as of June 30,
1999 was approximately $891,712.
NOTE C--RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH AN OFFICER/SHAREHOLDER
During the six months ended June 30, 1999 and 1998, the Company
recorded the following transaction with an officer/shareholder:
During the six months ended June 30, 1998, the Company incurred
approximately $44,000 for legal services and recognized $16,500 in
revenue due to the officer/shareholder. There were no related
transactions for the six months ended June 30, 1999.
Page 8 of 12
<PAGE>
SUBSCRIPTION RECEIVABLE -- SHAREHOLDER
The Company has a note receivable from an officer/director for $89,900 in
connection with the exercise of stock options. The note bears interest at
6% per year with the remaining principal and interest due April 1, 2000.
The balance of the note at June 30, 1999 was $50,400.
During the first quarter of 1999 the Company revalued options to its original
Underwriter, M.H. Meyerson & Co., Inc. The original agreement included an option
to purchase 96,000 Units (Units consists of two shares of common stock and one
common stock warrant) at an exercise price of $10.00. The units are exercisable
starting July 9, 1997 for a period of four years. Under the new agreement the
options are exercisable at a price of $3.50. All other terms remain unchanged.
NOTE D--COMMITMENTS
The Company has annual rental and lease commitments with a term of one year
or more for its offices and production facilities that expire at various
times through 2006. The minimum annual rent is approximately $1,400,000.
NOTE E--INCENTIVE STOCK OPTION PLANS
In 1995 through 1998, the Company adopted incentive stock option plans,
under which pools of 510,000, 200,000, 500,000, and 700,000 shares
respectively have been reserved. The plans are administered and terms of
option grants are established by the Board of Directors. Under the terms of
the plans, options may be granted to the Company's employees and directors
to purchase shares of common stock. Options become exercisable ratably over
a vesting period as determined by the Board of Directors, and expire over
terms not exceeding ten years from the date of grant, three months after
termination of employment, or one year after the death or permanent
disability of the employee. The Board of Directors determines the option
price (not less than fair market value) at the date of grant.
Pursuant to an employment agreement, the Company had outstanding options to
sell 162,000 shares of common stock to an officer/director of the Company at
an exercise price of $.56 per share. The options, which were fully vested
during 1994, were exercised on March 29, 1996 for $90,000. In connection
with the exercise of the options, the Company loaned $89,900 to the
officer/director. The balance of the note on June 30, 1999, was $50,400.
At September 30, 1998 the Company had outstanding options to sell 126,000
shares of common stock to an officer/director at an exercise price of $1.11
per share. As of September 30, 1998 the options are fully vested.
The options expire in December 2000.
The Company has outstanding employee stock options for 1,398,612 shares of
common stock at exercise prices ranging from $1.11 to $3.50 per share. As of
June 30, 1999, 779,452 of the shares are vested with the remainder scheduled
to vest through June, 2004.
Page 9 of 12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
On-Site Sourcing, Inc. (On-Site or the "Company") provides reprographic,
document management, imaging, facilities management services and information
technology services to law firms, corporations, non-profit organizations,
accounting firms, financial institutions and other organizations throughout the
East Coast of the United States. In order to meet the highly specialized
requirements of each client, On-Site offers a variety of customized reprographic
and facilities management services. The Company provides reprographic and
imaging services 24 hours-per-day, seven days-per-week including copying,
binding, labeling, collating and indexing in support of complex
document-intensive litigation as well as higher volume production of manuals,
brochures and other materials for corporations and non-profit organizations.
On-Site also provides on-premises management of customers' support services
including mailroom operations, facsimile transmission, records and supply room
management and copying services. The information technology group provides a
full range of technology services to professional service organizations,
including systems design and integration, training and network management
services.
The nature of the IT Group's value-added services is expected to produce
significant revenue and increased margins in future periods. The IT Group was
formed in response to the need of law firms for new client/server applications
and connectivity, requiring IT expertise that is difficult to acquire due the
competitive nature of the industry. The competitive law firm has the need for
E-mail, integrated billing and document management services and recurring
technology upgrades that are being demanded by their clients. These are problems
that the IT Group is beginning to address for these firms.
This Form 10-QSB contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from
results discussed in the forward-looking statements. Factors that might cause
such differences include, but are not limited to, demand for services, market
acceptance of the new IT group, impact of competitive services and pricing,
commercialization and technical difficulties, capacity constraints or
difficulties, general business and economic conditions and other risks detailed
in the Company's Annual Report, Form 10-KSB and other filings with the
Securities and Exchange Commission.
SIX MONTHS ENDED 1999 VS. 1998
Revenue for the six months ended June 30, 1999 increased 13% or $1,473,698 to
$12,921,957 over the comparable period in 1998. Principal reasons for the
increase are higher demand for the Company's Reprographics, Information
Technology, and Imaging groups.
Cost of sales for the six months ended June 30, 1999 decreased by 3 % or
$274,820 to $9,892,506 as compared to $10,167,326 for the same period in 1998.
Gross margins were 23% and 11%, respectively for the six months ended June 30,
1999 and 1998. The increase in gross margins was due to effective management of
the direct labor force, improved imaging operations, and increased volume in our
information technology business.
Selling expenses for the six months ended June 30,1999 decreased by $214,269 to
$1,069,805 over the same period last year. As a percentage of sales, selling
expense was 8% and 11% for the six months ended June 30, 1999 and 1998,
respectively. Selling expenses are primarily commissions based on sales.
Administrative expense for the six months ended June 30, 1999 increased by
$378,883 to $1,711,364 over the same period last year due primarily to increases
in administrative staffing and costs associated with expansion. As a percent of
sales, administrative expense was 13% for the six month period in 1998 as
compared to 12% for the same period last year.
.
NET EARNINGS (LOSS)
For the six months ended June 30, 1999 the Company's net earnings were $223,438
compared to a loss of $788,356 for the same period last year. Profits amounted
to $ 0.05 basic earnings per share and $0.05 diluted earnings per share compared
Page 10 of 12
<PAGE>
to losses of $ 0.16 for basic and diluted for the same period last year.
Shares outstanding for the six months ended June 30, 1999 were 4,833,169
basic and 4,938,302 diluted. The Company had an income tax benefit of
$450,500 versus an income tax expense of $0.00 for the six months ended
June 30, 1998 and 1999 respectively.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company believes its market risk exposure with regard to its financial
instruments is limited to changes in interest rates. Based upon the composition
of the Company's variable rate debt outstanding at June 30, 1999 which is
primarily borrowings under the working capital line of credit, the Company does
not believe that a hypothetical increase in the bank's prime rate of interest or
the 30 day LIBOR rate would be material to net income.
LIQUIDITY AND CAPITAL RESOURCES AT JUNE 30, 1999 AND SUBSEQUENT ACTIVITY
The Company has funded its expansion and growth by utilizing internally
generated cash flow and long term financing, where appropriate, for significant
capital outlays. The Company anticipates that cash flow from operations and
credit facilities will be sufficient to meet the Company's expected cash
requirements for the next twelve months. There can be no assurances that
unforeseen events may require more working capital than the Company has at its
disposal.
The Company has a secured a $2,500,000 line of credit with a financial
institution. The line of credit bears interest at the financial institution's
prime rate or the 30 day LIBOR rate plus 2.25%, payable monthly. The line of
credit will be utilized to finance accounts receivable and other working capital
needs. As of June 30, 1999 there were advances under the line that totaled
$928,000. The Company also has a $1,100,000 term note to refinance certain
capital leases at more favorable interest rates. The note is payable in 48
monthly installments, bears interest at the rate of 9.02%, and matures on April
30, 2001. The balance on the note at June 30, 1999 was $481,250.
During the six months ended June 30, 1999 and 1998, the Company's principal uses
of cash were to fund fixed asset purchases, pay off long-term debt, changes in
staffing requirements and relocation costs and expenses.
THREE MONTHS ENDED JUNE 1999 VS. 1998
Revenue for the three months ended June 30, 1999 increased 16% or $889,917 to
$6,591,361 over the same period in 1998. The increase is primarily from the
Company's Reprographics, Imaging and Information Technology groups.
Cost of Sales decreased by $112,772 to $4,956,717 for the three months ended
June 30, 1999 compared to the same period in 1998, even as sales increased.
Gross margins improved to 25% for the three months ended June 30, 1999 compared
to 11% for the same period in 1998.
Selling Expenses decreased 10% or $64,371 for the three months ended June 30,
1999 as compared to June 30, 1998. Selling Expenses as a percentage of sales
were 9% and 11% for the three months ended June 30, 1999 and 1998.
Administrative expenses increased 32% or $212,682 to $911,651 resulting mainly
from additional support staff and costs associated with expansion.
Net earnings for the three months ended June 30, 1999 for the Company were
$145,218 compared to a loss of $430,010 for the comparable period in 1998. The
profit resulted from improved gross margins and effective cost controls.
YEAR 2000
The Company is aware of the issues associated with the programming code in
existing computer systems as the Year 2000 approaches. Management is in the
process of converting its computer systems. Maintenance or modification costs
will be expensed as incurred, while the costs associated with new computer
systems will be capitalized and amortized over the
Page 11 of 12
<PAGE>
systems useful lives. Management believes that with converting to new computer
systems, the Year 2000 issue will not pose a significant operational problem.
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 hereunto duly authorized.
On-site Sourcing, Inc.
----------------------
Date: August 15, 1999
By:
/s/ Christopher J. Weiler
President and
Chief Executive Officer
By:
/s/ Alfred Duncan
Vice President of Finance and
Chief Financial Officer
Page 12 of 12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 1
<RECEIVABLES> 6,188,159
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,009,064
<PP&E> 4,241,707
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,308,270
<CURRENT-LIABILITIES> 3,827,689
<BONDS> 0
0
0
<COMMON> 48,517
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,308,270
<SALES> 6,591,361
<TOTAL-REVENUES> 6,591,361
<CGS> 4,956,717
<TOTAL-COSTS> 6,442,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46,743
<INCOME-PRETAX> 145,218
<INCOME-TAX> 0
<INCOME-CONTINUING> 145,218
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 145,218
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
