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, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from:
Commission File No. 1-12451
NEW YORK HEALTH CARE, INC.
(Name of small business issuer in its charter)
New York 11-2636089
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1850 McDonald Avenue, Brooklyn, New York 11223
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (718) 375-6700
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 [ ]
(ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS)
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities under
a plan confirmed by a court.
Yes [ ] No [ ]
<PAGE>
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 3,750,000
Transitional Small Business Disclosure Format (check one);
Yes [ ] No [X]
1
<PAGE>
PART I
Item 1. FINANCIAL STATEMENTS.
NEW YORK HEALTH CARE, INC.
BALANCE SHEET
A S S E T S
MARCH 31, 1997
(Unaudited)
Current assets:
Cash and cash equivalents $ 732,757
Accounts receivable, net of allowance for uncollectible
amounts of $115,345 3,343,889
Unbilled services 214,917
Prepaid expenses 133,089
Prepaid income taxes 10,845
Deferred income taxes 7,000
----------
Total current assets 4,442,497
Property and equipment, net 244,231
Acquisition costs, net 13,347
Deposits and other assets 32,455
----------
Total assets $4,732,530
==========
2
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued payroll $ 326,726
Accounts payable and accrued expenses 196,363
Current maturities of long term debt 5,650
----------
Total current liabilities 528,739
----------
Long-term debt, less current maturities 1,347
----------
Shareholders' equity:
Preferred stock $.01 par value, 2,000,000 shares authorized;
no shares issued or outstanding
Common stock, $.01 par value, 12,500,000 shares authorized;
3,750,000 shares issued and outstanding 37,500
Additional paid-in capital 4,064,807
Retained earnings 100,137
----------
Total shareholders' equity 4,202,444
----------
Total liabilities and shareholders' equity $4,732,530
==========
See accompanying notes to financial statements
3
<PAGE>
NEW YORK HEALTH CARE, INC.
STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
1996 1997
----------- -----------
Net patient service revenue $ 2,987,065 $ 3,086,034
----------- -----------
Expenses:
Professional care of patients 2,062,483 2,141,108
General and administrative 653,429 811,610
Bad debts expense 30,359 15,000
Depreciation 6,886 11,371
----------- -----------
Total operating expenses 2,753,157 2,979,089
----------- -----------
Income from operations 233,908 106,945
----------- -----------
Nonoperating income (expenses):
Interest income 3,073 8,179
Other income 4,766 2,687
Interest expense (31,397) (12,995)
----------- -----------
Nonoperating income (expenses), net (23,558) (2,129)
----------- -----------
Income before provision for income taxes 210,350 104,816
----------- -----------
Provision (credit) for income taxes:
Current 12,000 49,000
Deferred (50,000) (7,000)
----------- -----------
(38,000) 42,000
----------- -----------
Net income $ 248,350 $ 62,816
=========== ===========
Pro forma (unaudited):
Historical income before provision
for income taxes $ 210,350
Pro forma provision for income taxes 91,000
-----------
Pro forma net income $ 119,350
===========
Net income per common share and common
share equivalents (proforma for
March 31, 1996) $ .04 $ .02
=========== ===========
Weighted average number of common shares
and common share equivalents 3,402,659 3,773,437
=========== ===========
See accompanying notes to financial statements
4
<PAGE>
NEW YORK HEALTH CARE, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For The Three Months Ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-In Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 3,750,000 $ 37,500 $ 4,076,783 $ 37,321 $ 4,151,604
Net income 62,816 62,816
Additional costs of initial public
offering of common shares (11,976) (11,976)
--------- --------- ----------- --------- -----------
Balance at March 31, 1997 3,750,000 $ 37,500 $ 4,064,807 $ 100,137 $ 4,202,444
========= ========= =========== ========= ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
NEW YORK HEALTH CARE, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1996 1997
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 248,350 $ 62,816
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 10,369 14,853
Bad debts expense 30,359 15,000
Deferred tax (credit) (50,000) (7,000)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable
and unbilled services 841,155 (475,985)
Decrease in due from shareholders 145,000
Decrease in prepaid expenses 12,248 38,103
Increase in deposits (6,766)
Increase in deferred charges (50,000)
Increase (decrease) in accrued payroll 2,472 (98,631)
Increase in accounts payable and accrued expenses 104,449 49,144
(Decrease) increase in income taxes payable (29,737) 12,884
----------- ----------
Net cash provided by (used in)
operating activities 1,264,665 (395,582)
----------- ----------
Cash flows from investing activities:
Acquisition of fixed assets (9,184) (47,954)
----------- ----------
Net cash used in investing activities (9,184) (47,954)
----------- ----------
Cash flows from financing activities:
Net repayments under note payable (325,000)
Repayment of long-term debt (1,990) (181)
Additional costs of initial public offering
of common shares (11,976)
Distributions (787,638)
----------- ----------
Net cash used in financing activities (1,114,628) (12,157)
----------- ----------
Net (decrease) increase in cash and cash equivalents 140,853 (455,693)
Cash and cash equivalents at beginning of period 177,688 1,188,450
----------- ----------
Cash and cash equivalents at end of period $ 318,541 $ 732,757
=========== ==========
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest $ 30,930 $ 12,995
=========== ===========
Income taxes $ 12,262 $ 215,062
=========== ===========
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
NEW YORK HEALTH CARE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The accompanying unaudited financial statements, which are for an interim
period, do not include all disclosures provided in the annual financial
statements. These unaudited financial statements should be read in conjunction
with the financial statements and the footnotes thereto contained in the Annual
Report on Form 10-KSB for the year ended December 31, 1996 of New York
Healthcare, Inc. (the "Company"), as filed with the Securities and Exchange
Commission.
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments (which are of a normal recurring nature) necessary for a
fair presentation of the financial statements. The results of operations for the
three months ended March 31, 1997 are not necessarily indicative of the results
to be expected for the full year.
Net income per common share and common share equivalent for the three months
ended March 31, 1997 is based on the weighted average number of shares and
common share equivalents outstanding during the period.
Pro forma net income per common share and common share equivalent for the three
months ended March 31, 1996 is based upon the weighted average number of shares
and common share equivalents outstanding during the period. The weighted average
shares outstanding for the period was increased by the number of shares
(459,725) whose proceeds would be necessary to pay the S-Corporation
distribution paid and declared ($2,987,638) during the twelve month period ended
March 31, 1996.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion contains certain forward-looking statements that
involve various risks and uncertainties. The Company's actual results could
differ materially from those discussed herein. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and in "Business" and "Risk Factors" and in the Company's December 20,
1996 Prospectus. The following discussion should be read in conjunction with the
financial statements of the Company and the notes thereto, and is qualified in
its entirety by the foregoing and by more detailed financial information
appearing elsewhere in this report and in the Company's Form 10-KSB annual
report for the year ended December 31, 1996.
Results of Operations
Three Months Ended March 31, 1997 Compared To Three Months Ended March 31, 1996
Revenues for the three months ended March 31, 1997 ("first quarter of
1997") increased 3.3% to $3,086,000 from $2,987,000 for the three months ended
March 31, 1996 ("first quarter of 1996"). The increased revenues are
attributable to increased hours of service provided under existing and new
contracts.
Cost of professional care of patients for the first quarter of 1997
increased 3.8% to $2,141,000 from $2,062,000 for the first quarter of 1996. The
increase is attributable to the increased hours of services provided. The cost
of professional care of patients as a percentage of revenue remained stable at
69.4% for the first quarter of 1997 and 69.0% for the first quarter of 1996.
Selling, general and administrative expenses increased 21.3% to $838,000
for the first quarter of 1997 from $691,000 for the first quarter of 1996.
Approximately $141,000 (96%) of the $147,000 increase in selling, general and
administrative expenses resulted from increased management and staffing salaries
for employees recruited in the last quarter of 1996 to manage the supervision of
the care of patients requiring extended nursing and technical support, and
additional corporate staff to support anticipated growth in the Company's
business.
Interest expense, net of interest income, for the first quarter of 1997
decreased 82.2% to $5,000 compared to $28,000 for the first quarter of 1996 as a
result of the repayment of the bank credit line during the fourth quarter of
1996. This decrease is deemed to be temporary and is not indicative of any
trend.
The current provision for Federal, State and local taxes for the first
quarter of 1997 decreased to approximately $49,000 from approximately $91,000
for the first quarter of 1996 (calculated on a pro-forma basis in 1996 - see
Note 2 to the financial statements included in the Company's Form 10-KSB for the
year ended December 31, 1996), as a result of the $105,000 (50.0%) decrease in
taxable income from $210,000 in the first quarter of 1996 to $105,000 for the
first quarter of 1997. In addition, a deferred tax credit of $7,000 is provided
for the first quarter of 1997 as a result of timing differences in the
deductability of the provision for doubtful accounts. There was no tax credit
provided for the first quarter of 1996 calculated on a pro-forma basis.
In view of the foregoing, net income for the first quarter of 1997
decreased 47.1% to $63,000 as compared to $119,000, calculated on a pro-forma
basis, for the first quarter of 1996.
8
<PAGE>
Liquidity and Capital Resources
For the first quarter of 1997, net cash used in operations was $396,000 as
compared to $1,265,000 provided by operations during the first quarter of 1996,
a decrease of $1,661,000, or 131.3%. The $396,000 used in the first quarter of
1997 was principally due to the approximately $476,000 increase in accounts
receivable and unbilled services, offset by approximately $63,000 in net income.
In the first quarter of 1996, $1,234,000 of the $1,265,000 provided by
operations was a result of a decrease in accounts receivable and a decrease in
advances to shareholders of approximately $841,000 and $145,000, respectively,
and net income of $248,000. The large decrease in accounts receivable during the
first quarter of 1996 was the result of increased Medicaid cash collections
attributable to a large increase in this receivable as of December 1995, which
was atypical and not indicative of any trend. Net cash used in financing
activities for the first quarter of 1997 totalled $12,000, compared to the
$1,115,000 used in the first quarter of 1996, a decrease of 99.0%, primarily the
result of payments in 1996 of S Corporation distributions to the Company's
stockholders in the amount of $788,000 and a $325,000 repayment of the bank
credit line during the first quarter of 1996.
As of March 31, 1997, approximately $3,293,000 (approximately 69%) of the
Company's total assets consisted of accounts receivable from clients who are
reimbursed by third-party payors, as compared to $3,119,000 (approximately 78%)
as of March 31, 1996, a decrease of 13%. Such payors generally require
substantial documentation in order to process claims. This decrease is due to an
increase in total assets as a result of the Company's public stock offering in
December 1996 and a slight increase in amounts due from clients not reimbursed
by third-party payors, and is not indicative of any trend.
Days Sales Outstanding ("DSO") is a measure of the average number of days
taken by the Company to collect its accounts receivable, calculated from the
date services are billed. For the quarters ended March 31, 1997 and 1996, the
Company's DSOs were 98 days and 99 days, respectively, a slight decrease of 1.1%
which is not indicative of any trend.
The Company's liquidity and long-term capital requirements depend upon a
number of factors, including the lag time to realize collections of amounts
billed to clients for services provided and the rate at which new offices and
facilities are established and acquisitions, if any, are completed. The Company
believes that the development and start-up costs for a new branch office
aggregate approximately $100,000, including leasehold improvements, lease
deposits, office equipment, marketing, recruiting, labor and operating costs
during the pre-opening and start-up phase, and also the provision of working
capital to fund accounts receivable. Such costs will vary depending upon the
size and location of each facility and, accordingly, may vary substantially from
these estimates.
The Company presently has a credit facility with Safra National Bank of New
York (formerly UMB Bank and Trust Company) in the amount of $3,500,000, which is
secured by substantially all of the Company's assets. Repayment of outstanding
amounts under such facility is guaranteed by all of the Company's directors.
This credit facility provides for interest at the prime rate published in the
Wall Street Journal, plus .75%, payable monthly, and is renewable in May 1997.
At March 31, 1997, there was no outstanding balance due under this credit line.
9
<PAGE>
The Company is actively pursuing potential acquisitions. Further expansion
of the Company's business may require the Company to incur additional debt or
offer additional equity if internally generated funds, cash on hand and amounts
available under its bank credit facilities are inadequate to meet such needs.
There can be no assurance that such additional debt or equity will be available
to the Company, or, if available, will be on terms acceptable to the Company.
Potential Regulatory Changes
There have been recent news reports concerning federal budget negotiations
regarding potential changes in the way the Government will reimburse home health
care companies in the future, including the possibility of capitation. While the
Company is not currently a Medicare-Certified Home Health Agency subject to
these changes, most of the Company's referral sources are and they may be
negatively impacted by future legislation which may be adopted to control home
health care costs. While it is still premature to discern what impact, if any,
the potential changes may have on the Company's operations, there can be no
assurance that future legislation will not result in reduced reimbursement rates
from referral sources.
Item 5. OTHER INFORMATION.
On May 6, 1997, the Company entered into a letter of intent to effect an
acquisition of a home health care company (the "target") doing business in
Florida which had gross revenues for its fiscal year ended December 31, 1996 of
approximately $3,900,000 and no net income (financial information is subject to
completion of an audit). The Company intends to acquire all of the issued and
outstanding shares of capital stock of the target in consideration for a
purchase price consisting of $650,000 in cash, $350,000 of the Company's $.01
par value common stock, priced at the market at the time of acquisition, and a
potential $1,250,000 of additional compensation through an "earn-out" based upon
the results of the target's operations after acquisition, all on terms to be
agreed-upon between the Company and the target. This proposed acquisition, which
is subject to the negotiation and execution of a definitive acquisition
agreement and approval by stockholders, among other conditions, is expected to
be accounted for as a "purchase" in accordance with Generally Accepted
Accounting Principles.
Item 6. EXHIBITS AND REPORTS ON FORM 8-KSB.
(a) Exhibits required by item 601 of Regulation S-B.
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Certificate of Incorporation of the Company.*
10
<PAGE>
3.2 Restated Certificate of Incorporation of the Company.*
3.3 Certificate of Correction of Restated Certificate of
Incorporation of New York Health Care, Inc.*
3.4 Amendment to the Certificate of Incorporation filed October
17, 1996.*
3.5 By-laws of the Company.*
3.6 Amendment to the Certificate of Incorporation of the Company
filed December 4, 1996.*
4.1 Form of certificate evidencing shares of Common Stock.*
4.2 Underwriter's Warrant Agreement and Form of Underwriter's
Warrant.*
10.1 Purchase and Sale Agreement by and between the Company,
National Medical Homecare, Inc., Jerry Braun and Sam Soroka
dated March 18, 1988.*
10.2 Lease for 105 Stevens Avenue, White Plains, New York by and
between the Company and Vincent Rippa as receiver dated
October 30, 1992.*
10.3 Lease for 175 Fulton Avenue, Suite 30IA, Hempstead, New York
by and between and the Company and Hempstead Associates
Limited Partnership dated July 22, 1993.*
10.4 Deed for 1667 Flatbush Avenue, Brooklyn, New York from Tiara
Realty Co. to the Company dated April 22, 1994.*
10.5 Agreement between Jerry Braun, Jacob Rosenberg, Samson
Soroka, Hirsch Chitrik, Sid Borenstein and the Company dated
March 31, 1988.*
10.6 Lease for 49 South Main Street, Spring Valley, New York by
and between the Company and Joffe Management dated November
1, 1994.*
11
<PAGE>
10.7 Agreement for Provisions of Home Health Aide and Personal
Care Worker Services by and between the Company and
Kingsbridge Heights Health Facilities Long Term Home Health
Care Program dated November 2, 1994.*
10.8 State of New York Department of Health Office of Health
Systems Management Home Care Service Agency License for the
Company doing business in Rockland, Westchester and Bronx
Counties dated May 8, 1995.*
10.9 State of New York Department of Health Office of Health
Systems Management Home Care Service Agency License for the
Company doing business in Dutchess, Orange, Putnam, Sullivan
and Ulster Counties dated May 8, 1995.*
10.10 State of New York Department of Health Office of Health
Systems Management Home Care Service Agency License for the
Company doing business in Nassau, Suffolk and Queens Counties
dated May 8, 1995.*
10.11 State of New York Department of Health Office of Health
Systems Management Home Care Service Agency License for the
Company doing business in Orange and Rockland Counties dated
July 1. 1995.*
10.12 Lease Renewal for 45 Grand Street, Newburgh, New York by and
between the Company and Educational and Charitable Foundation
of Eastern Orange County, Inc. dated July 12, 1995.*
10.13 Lease for 91-31 Queens Boulevard, Elmhurst, New York by and
between the Company and Expressway Realty Company dated
September 15, 1995.*
10.14 Settlement Agreement and General Release by and between the
Company and Samson Soroka dated September 28, 1995.*
10.15 Personal Care Aide Agreement by and between the Company and
Nassau County Department of Social Services dated October 18,
1995.*
12
<PAGE>
10.16 Lease for 1667 Flatbush Avenue, Brooklyn, New York by and
between the Company and 1667 Flatbush Avenue LLC dated
November 1, 1995.*
10.17 State of New York Department of Health Office of Health
Systems Management Home Care Service Agency License for the
Company doing business in Bronx, Kings, New York, Queens and
Richmond Counties dated December 29, 1995.*
10.18 Home Health Agency Agreement by and between the Company and
the Center for Nursing and Rehabilitation dated January 1,
1996.*
10.19 Homemaker and Personal Care Agreements by and between the
Company and the County of Rockland Department of Social
Services dated January 1, 1996.*
10.20 Home Health Aide/ Personal Care Worker Services Agreement by
and between the Company and Beth Abraham Hospital dated
January 12, 1996.*
10.21 Homemaker Services Agreement by and between the Company and
the Orange County Department of Social Services dated
February 16, 1996.*
10.22 Personal Care Service Agreement by and between the Company
and the Orange County Department of Social Services dated
February 16, 1996.*
10.23 Certified Home Health Agency Agreement by and between the
Company and New York Methodist Hospital dated February 28,
1996.*
10.24 Employment Agreement by and between the Company and Jacob
Rosenberg dated March 26, 1996.*
10.25 Employment Agreement by and between the Company and Jerry
Braun dated March 26, 1996.*
10.26 Stock Option Agreement by and between the Company and Jerry
Braun dated March 26, 1996.*
13
<PAGE>
10.27 Home Health Agency Agreement by and between the Company and
the Mount Sinai Hospital Home Health Agency dated April 1,
1996.*
10.28 Absolute, Unconditional, Irrevocable and Limited Continuing
Guaranty of Payment by and between Jacob Rosenberg and United
Mizrahi Bank and Trust Company dated May 9, 1996.*
10.29 Absolute, Unconditional, Irrevocable and Limited Continuing
Guaranty of Payment by and between Jerry Braun and United
Mizrahi Bank and Trust Company dated May 9, 1996.*
10.30 Continuing General Security Agreement by and between the
Company and United Mizrahi Bank and Trust Company dated May
9, 1996.*
10.31 Agreement for the Purchase of Accounts Receivable between the
Company and 1667 Flatbush Avenue LLC dated July 8, 1996.*
10.32 401 (k) Plan for the Company.*
10.33 Performance Incentive Plan for the Company.*
10.34 Services Agreement between the Company and Heart to Heart
Health Care Services, Inc., dated January 1, 1996.*
10.35 Employment Agreement by and between the Company and Gilbert
Barnett dated August 27, 1996.*
10.36 Assignment of lease dated October 8, 1996, lease dated March
31, 1995 and sublease dated May 1995 among the Company, as
tenant, Prime Contracting Design Corp., as assignor, Bellox
Realty Corp., as landlord and Nutriplus Corp., as subtenant.*
10.37 Lease for 6 Gramatan Avenue, Mount Vernon, New York, 10550 by
and between the Company and 6 Gramatan Avenue Corp. dated
December 1, 1996.*
10.38 Form of Financial Consulting Agreement with H.J. Meyers &
Co., Inc.*
14
<PAGE>
10.39 Forms of Merger & Acquisition Agreement and Indemnification.*
11 Computation of Earnings Per Common Share of the Company.
27 Financial statement schedule.
* Incorporated by reference to Exhibits filed as part of the Company's
Registration Statement on Form SB-2 under File No. 333-08152, which was
declared effective on December 20, 1996.
(b) Reports on Form 8-K. The Company has not yet filed any reports on Form
8-K.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
May 14, 1997
NEW YORK HEALTH CARE, INC.
By: /s/ GILBERT BARNETT
---------------------------------------
Gilbert Barnett
Chief Accounting and Financial Officer
16
Exhibit 11
NEW YORK HEALTH CARE, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, 1996 March 31, 1997
-------------- --------------
Earnings:
Net income (pro forma for the three
months ended March 31, 1996) $ 119,350 $ 62,816
========== ==========
Shares:
Weighted average number of shares
outstanding 2,500,000 3,750,000
Additional shares assuming exercise
of options 20,659 23,437
Additional shares whose proceeds
would be necessary to pay
S-Corporation dividend 882,000 --
---------- ----------
Weighted average number of common
shares and common share
equivalents outstanding 3,402,659 3,773,437
========== ==========
Net income (pro forma for the three
months ended March 31, 1996)
per common share and common share
equivalents $.04 $.02
==== ====
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NEW YORK
HEALTH CARE, INC. FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 732,757
<SECURITIES> 0
<RECEIVABLES> 3,459,234
<ALLOWANCES> (115,345)
<INVENTORY> 0
<CURRENT-ASSETS> 4,442,497
<PP&E> 393,397
<DEPRECIATION> (149,166)
<TOTAL-ASSETS> 4,732,530
<CURRENT-LIABILITIES> 528,739
<BONDS> 0
0
0
<COMMON> 37,500
<OTHER-SE> 4,164,944
<TOTAL-LIABILITY-AND-EQUITY> 4,732,530
<SALES> 0
<TOTAL-REVENUES> 3,086,034
<CGS> 0
<TOTAL-COSTS> 2,141,108
<OTHER-EXPENSES> 822,981
<LOSS-PROVISION> 15,000
<INTEREST-EXPENSE> 12,995
<INCOME-PRETAX> 104,816
<INCOME-TAX> 42,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,816
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
