U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________TO__________
Commission File Number 0-22533
MERCURY WASTE SOLUTIONS, INC.
-----------------------------
(Exact name of small business issuer as specified in its charter)
MINNESOTA 41-1827776
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 North Riverfront Drive, Suite 100A
MANKATO, MINNESOTA 56001
------------------------
(Address of principal executive offices)
(507) 345-0522
--------------
(Issuer's telephone number)
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 _____.
The number of shares outstanding of each of the Issuer's Common Stock, $.01 Par
Value, as of March 31, 2000 was 3,480,097.
Transitional small business disclosure format:
Yes _____ No __X__.
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
FORM 10-QSB
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999 3
Consolidated Statements of Operations for the three months
ended March 31, 2000 and 1999 4
Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements
MERCURY WASTE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
- --------------
Cash and cash equivalents $ 23,793 $ 26,774
Accounts receivable, less allowance for doubtful accounts of $55,000
at March 31, 2000 and $90,000 at December 31, 1999 1,241,905 1,187,921
Other current assets 256,287 165,194
------------ ------------
TOTAL CURRENT ASSETS 1,521,985 1,379,889
------------ ------------
Property and Equipment, at cost
- -------------------------------
Leasehold improvements 490,211 485,825
Furniture, fixtures, and equipment 437,385 437,116
Plant equipment 2,033,971 2,034,369
Construction in progress 64,176 53,015
------------ ------------
TOTAL PROPERTY AND EQUIPMENT 3,025,743 3,010,325
Less accumulated depreciation 1,203,566 1,081,029
------------ ------------
NET PROPERTY AND EQUIPMENT 1,822,177 1,929,296
------------ ------------
Other Assets
- ------------
Cash restricted for closure 94,516 94,516
Intangible assets, net 2,145,887 2,261,143
------------ ------------
TOTAL OTHER ASSETS 2,240,403 2,355,659
------------ ------------
TOTAL ASSETS $ 5,584,565 $ 5,664,844
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
- -------------------
Line of credit, net of discount (Note 2) $ 1,689,300 $ 1,000,000
Current portion of long-term debt 223,538 1,058,148
Accounts payable 483,376 352,561
Accrued expenses 449,376 446,413
Deferred revenue 194,366 127,299
------------ ------------
TOTAL CURRENT LIABILITIES 3,039,956 2,984,421
------------ ------------
Long-Term Liabilities
- ---------------------
Long-term debt, net of current portion 4,942 19,430
Closure fund 30,300 30,300
------------ ------------
TOTAL LONG-TERM LIABILITIES 35,242 49,730
------------ ------------
Shareholders' Equity
- --------------------
Common stock, $0.01 par value; shares issued and outstanding of
3,480,097 at March 31, 2000 and December 31, 1999 34,801 34,801
Additional paid-in capital 4,801,144 4,799,394
Accumulated deficit (2,326,578) (2,203,502)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 2,509,367 2,630,693
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,584,565 $ 5,664,844
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Revenues $ 1,533,419 $ 1,280,536
Cost of Revenues 987,896 934,708
------------ ------------
Gross Profit 545,523 345,828
------------ ------------
Operating Expenses
Sales & Marketing 179,355 302,911
General & Administrative 404,124 470,753
------------ ------------
583,479 773,664
------------ ------------
Operating Income (Loss) (37,956) (427,836)
Business interruption claim recovery (expenses), net 0 328,940
Interest Income 432 2,124
Interest Expense (85,552) (56,484)
------------ ------------
Net Income (Loss) before Income Taxes (123,076) (153,256)
Income tax expense (benefit) 0 0
------------ ------------
Net Income (Loss) $ (123,076) $ (153,256)
============ ============
Basic and diluted income (loss) per share $ (0.04) $ (0.04)
Basic and diluted weighted average number of common and
common equivalent shares outstanding: 3,480,097 3,480,097
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Net Income (Loss) $ (123,076) $ (153,256)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation 122,537 114,567
Amortization 115,256 114,978
Non cash compensation 1,750 1,750
Changes in assets and liabilities:
Accounts receivable (53,984) (123,537)
Other current assets (37,290) 4,672
Accounts payable 20,115 33,077
Accrued expenses 2,963 7,145
Deferred revenue 67,067 5,940
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 115,338 5,336
------------ ------------
Cash Flows from Investing Activities
- ------------------------------------
Purchase of property and equipment (15,418) (105,690)
Increase in restricted cash 0 (2,124)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (15,418) (107,814)
------------ ------------
Cash Flows From Financing Activities
- ------------------------------------
Payments on long-term debt (62,901) (129,048)
Net borrowings (repayments) on the line of credit (40,000) 270,000
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (102,901) 140,952
------------ ------------
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (2,981) 38,474
Cash and cash equivalents
Beginning 26,774 75,015
------------ ------------
Ending $ 23,793 $ 113,489
============ ============
Supplemental Disclosures of Cash Flow Information
Cash payments for interest $ 75,111 $ 43,850
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
Notes to Consolidated Financial Statements
March 31, 2000
Note 1. - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB. 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 of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month period ended March 31, 2000 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2000, or any other
period. For further information, refer to the audited financial statements and
footnotes thereto for the year ended December 31, 1999 contained in the
Company's Annual Report on Form 10-KSB.
Note 2. - Debt Restructuring
In May 1998, the Company entered into a $2,000,000 loan agreement with
Bankers American Capital Corporation ("BACC"), a corporation wholly owned by
Brad J. Buscher, the Company's Chairman of the Board and Chief Executive
Officer. The $2,000,000 loan consisted of a $1,200,000 term loan used to fund
the Mercury Refining Company, Inc. acquisition and an $800,000 revolving credit
loan used for working capital purposes. The term loan had a two-year term
requiring quarterly payments, commencing on September 1, 1998, of $60,000 plus
interest with the balance due in May 2000 and the revolving credit loan had a
one-year term. Borrowings under the loans bear interest at 6% over the prime
rate and are secured by all Company assets. In May 1999 the line of credit was
extended to November 1999 and in September 1999, the line of credit was further
extended to May 2000 and increased from $800,000 to $1,000,000 under similar
terms.
In March 2000, the term loan and the revolving credit loan, with a
combined outstanding balance of $1,910,000, were consolidated into one
$2,000,000 revolving credit loan ("Restructured Loan") with BACC. The
Restructured Loan requires monthly interest only payments at 6% over the prime
rate, is secured by all Company assets and matures on December 31, 2000. As
consideration for restructuring the loan, BACC required a $120,000 cash
commitment fee payable on December 31, 2000 or upon liquidation or sale of the
Company. The $120,000 fee has been recorded as a discount against the
Restructured Loan. In conjunction with this transaction, BACC also sold a
$1,000,000 participation in the Restructured Loan to the First National Bank of
Fulda, an entity owned by Frank Farrar, a member of the Company's Board of
Directors. At March 31, 2000, gross line of credit borrowings totaled
$1,800,000, net of the unamortized debt discount of $110,700.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in connection with the
Company's consolidated financial statements and related notes thereto included
within this document.
RESULTS OF OPERATIONS
OVERVIEW. The Company provides services to mercury waste generators to
reduce the risk of liability associated with mercury waste disposal. The Company
currently operates a mercury waste retorting facility in Union Grove, Wisconsin,
two facilities for recycling and storing fluorescent and other
mercury-containing lamps located in Roseville, Minnesota and Union Grove,
Wisconsin and mercury waste storage and collection facilities in Kenosha,
Wisconsin, Indianapolis, Indiana, Atlanta, Georgia and Albany, New York.
REVENUES. Total revenues were $1,533,419 for the three months ended
March 31, 2000 compared to $1,280,536 for the three months ended March 31, 1999,
an increase of $252,883 or 20%.
Mercury retorting revenues were $765,492 for the three months ended
March 31, 2000 compared to $620,991 for the three months ended March 31, 1999,
an increase of $144,501 or 23%. The Company believes the increase in retort
revenue in 2000 is primarily due to the increase in large retort projects.
Retort revenues can vary significantly from period to period due to the extent
or lack of one-time large retort projects, the nature and extent of which varies
from year to year. For the three months ended March 31, 2000, the Company had
large retort projects of approximately $130,000 as compared to none for the
three months ended March 31, 1999.
Lamp Recycling revenues were $767,927 for the three months ended March
31, 2000 compared to $659,545 for the three months ended March 31, 1999, an
increase of $108,382 or 16%. The Company believes the increase in lamp recycling
revenue is due primarily to the continued growth of its turnkey lamp recycling
container programs. In addition to revenue growth generated from these products
in its current customer base, the Company has established strategic
relationships in the current quarter with large distributors to sell these
products to their customers.
Under the Company's lamp recycling programs, the Company charges an up
front fee that covers the cost of the container, transportation and recycling. A
portion of this up front fee is deferred until all services are performed.
Factoring out the deferred revenue adjustments, lamp recycling billings for the
three months ended March 31, 2000 increased by 25% over billings for the three
months ended March 31, 1999.
COST OF REVENUES. Cost of revenues consists primarily of direct labor
costs to process the waste, transportation costs and direct facility overhead
costs. Gross profit as a percent of revenue was 36% and 27% for the three months
ended March 31, 2000 and 1999, respectively.
Mercury retorting gross profit percentages were 31% and 7% for the
three months ended March 31, 2000 and 1999, respectively. The improvement in the
mercury retorting gross profit margin is due primarily to increased sales,
resulting in more efficient utilization of the Union Grove Facility, which has a
cost structure that is predominately fixed. Lamp recycling gross profit
percentages were 40% and 46% for the three months ended March 31, 2000 and 1999,
respectively. The decrease in lamp recycling gross margins is primarily due to
increased sales of its lamp recycling products to distributors as discussed
above and to increased costs related to the expansion of the Atlanta facility in
March 1999.
SALES AND MARKETING. Sales and marketing expense was $179,355 for the
three months ended March 31, 2000 compared to $302,911 for the three months
ended March 31, 1999, a decrease of $123,556 or 41%. The decrease in 2000 is
primarily due to sales personnel cuts made in the second half of 1999.
GENERAL AND ADMINISTRATIVE. General and administrative expense was
$404,124 for the three months ended March 31, 2000 compared to $470,753 for the
three months ended March 31, 1999, a
<PAGE>
decrease of $66,629 or 14%. The decrease in 2000 is primarily due to personnel
and related cost cuts made in the second half of 1999.
BUSINESS INTERRUPTION CLAIM RECOVERY. The business interruption claim
recovery of $328,940 recorded for the three months ended March 31, 1999
represents net proceeds received from the insurance company related to a 1998
business interruption insurance claim.
INTEREST EXPENSE. Interest expense was $85,552 for the three months
ended March 31, 2000 compared to $56,484 for the three months ended March 31,
1999. The increase in 2000 was due to increased line of credit borrowings,
higher interest rates and the amortization of the debt discount related to the
refinancing of the line of credit.
INCOME TAXES. There was no income tax expense (benefit) recorded for
the three months ended March 31, 2000 or 1999. At December 31, 1999, the Company
recorded a valuation allowance of approximately $896,000 on its net deferred tax
assets due to the uncertainty of their realization. The realization of these
deferred tax assets is dependent upon generating sufficient taxable income
during the period that deductible temporary differences and net operating loss
carryforwards are expected to be available to reduce taxable income. At December
31, 1999, the Company had net operating loss carryforwards of approximately
$1,800,000, of which $613,000 expire in 2012 and $1,187,000 expire in 2019.
NET LOSS. Resulting from the factors discussed above, the Company
recorded a net loss of $123,076 for the three months ended March 31, 2000
compared to a net loss of $153,256 for the three months ended March 31, 1999.
Basic and diluted loss per share was $0.04 for the three months ended March 31,
2000 compared to basic and diluted loss per share of $0.04 for the three months
ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $115,338 for the three
months ended March 31, 2000, primarily resulting from depreciation and
amortization of $237,793, offset by the net loss of $123,076.
Cash flows used in investing activities were $15,418 for the three
months ended March 31, 2000, consisting primarily of payments for capital
expenditures related to the Union Grove Facility.
Cash flows used in financing activities were $102,901 for the three
months ended March 31, 2000, consisting of payments on the line of credit of
$40,000 and payments on long-term debt of $62,901.
In May 1998, the Company entered into a $2,000,000 loan agreement with
Bankers American Capital Corporation ("BACC"), a corporation wholly owned by
Brad J. Buscher, the Company's Chairman of the Board and Chief Executive
Officer. The $2,000,000 loan consisted of a $1,200,000 term loan used to fund
the Mercury Refining Company, Inc. acquisition and an $800,000 revolving credit
loan used for working capital purposes. The term loan had a two-year term
requiring quarterly payments, commencing on September 1, 1998, of $60,000 plus
interest with the balance due in May 2000 and the revolving credit loan had a
one-year term. Borrowings under the loans bear interest at 6% over the prime
rate and are secured by all Company assets. In May 1999 the line of credit was
extended to November 1999 and in September 1999, the line of credit was further
extended to May 2000 and increased from $800,000 to $1,000,000 under similar
terms.
In March 2000, the term loan and the revolving credit loan, with a
combined outstanding balance of $1,910,000, were consolidated into one
$2,000,000 revolving credit loan ("Restructured Loan") with BACC. The
Restructured Loan requires monthly interest only payments at 6% over the prime
rate, is secured by all Company assets and matures on December 31, 2000. As
consideration for restructuring the
<PAGE>
loan, BACC required a $120,000 cash commitment fee payable on December 31, 2000
or upon liquidation or sale of the Company. The $120,000 fee has been recorded
as a discount against the Restructured Loan. In conjunction with this
transaction, BACC also sold a $1,000,000 participation in the Restructured Loan
to the First National Bank of Fulda, an entity owned by Frank Farrar, a member
of the Company's Board of Directors. At March 31, 2000, gross line of credit
borrowings totaled $1,800,000, net of the unamortized debt discount of $110,700.
The Company anticipates that its availability under its revolving
credit loan and cash generated by its operations will be sufficient to fund its
working capital needs, debt service and capital expenditures through at least
December 31, 2000, excluding any unanticipated expenses associated with the
Company's regulatory matters and any additional business acquisitions and
provided that revenues increase in the short-term, which cannot be assured. To
improve its short-term liquidity position, the Company has restructured its loan
with BACC as discussed above and has taken steps to reduce its overhead to be
more in line with its actual revenues realized. In addition to the factors
indicated above, liquidity beyond December 31, 2000 will be dependent on
increased revenues and additional financing from BACC, which would include the
renewal of the Restructured Loan due December 31, 2000, or from another source
on affordable terms to the Company. There can be no assurance that additional
financing will be available at all or that if available, such financing would be
obtainable on terms favorable to the Company. Failure to obtain additional
financing could have a material adverse effect on the Company.
REGULATORY MATTERS
NOTICE OF VIOLATION. In February 1999 and July 1999, the Company
received Notices of Violation from the Wisconsin Department of Natural Resources
("WDNR") alleging violation of certain state hazardous waste regulations
relating to its Union Grove Facility. The WDNR's letters identified several
alleged violations and informed the Company that the WDNR has the authority to
impose monetary penalties. The Company responded to these violations and entered
into settlement negotiations with the State of Wisconsin of this civil
proceeding. In December 1999, agreement was reached on settlement terms
satisfactory to the State of Wisconsin. Those terms include payment of a civil
fine of $75,000 to be paid over three years. The Company anticipates entering
into a final settlement agreement with the State of Wisconsin in the near
future. While the Company believes it has taken all necessary steps to address
these regulatory concerns, these regulatory issues have and may continue to have
a negative impact on revenue growth and profitability.
UNION GROVE FACILITY STORAGE PERMIT. In May 1997, the Company applied
for a hazardous waste storage permit for 181 drums of storage from the WDNR. In
March 1998, the WDNR granted the Company a variance that allowed the Company to
store up to 181 drums of hazardous waste at the facility. In September of 1998
the Company submitted a new permit application, which requested 829 drums of
waste storage. The Part B storage permit application is currently under review
by the WDNR. In addition, certain elements of the permit require approval by the
EPA. The Company has been informed by the WDNR that the WDNR is working towards
issuance of the permit, with appropriate EPA approvals. Commencing in May, 2000
and continuing until the final permit issuance, the Union Grove Facility
operations will have to operate without storage capability for certain types of
wastes. While the Company believes this situation will not have a material
adverse affect on its operations, it will result in increased transportation and
related costs due to the increased need to use its Kenosha, Wisconsin and
Albany, New York storage facilities.
MERCURY SPILL. In March 1999, a customer of the Company spilled a
reportable amount of mercury at the Union Grove Facility. The spill was
immediately cleaned up, at the customer's expense, by an independent contractor.
The Company also notified the WDNR of this spill and continued to monitor its
property for further contamination. In May 1999, the Company determined there
was further contamination of its property from this spill and remediated, again
at the customer's expense, the affected areas. In September 1999, the Company
received a letter from the WDNR indicating that the Company may be a potential
responsible party ("PRP") for mercury contamination at its property and required
the Company to take comprehensive soil samples of its property and adjacent
properties. The results of the soil samples indicated no contamination to the
Company's property or adjacent properties. Accordingly, in
<PAGE>
January 2000, the Company requested from the WDNR a letter which removes the
Company as a PRP. In March 2000, the WDNR responded with a letter requesting
further information and requiring the Company to continue to monitor its
property for contamination. The Company has provided this additional information
to the WDNR and has continued to monitor the property for contamination. The
Company has again requested the WDNR to issue a letter which removes the Company
as a PRP. While the Company believes all contamination on its property has been
remediated, it can make no assurances as to when or if it will be removed as a
PRP by the WDNR. The Company also believes ongoing monitoring costs will not be
material and that future material clean-up obligations related to this incident,
if any, would be covered by the Company's pollution liability insurance policy.
FORWARD LOOKING STATEMENTS
Statements contained in this report regarding the Company's future
operations, performance and results, and anticipated liquidity are
forward-looking and therefore are subject to certain risks and uncertainties,
including those discussed herein. In addition, any forward-looking information
regarding the operations of the Company will be affected by the ability of the
Company to implement its marketing strategies and increase revenues,
successfully operate its Union Grove Facility without interruption, receive
favorable resolutions in the Company's present regulatory matters with the State
of Wisconsin, secure storage facilities at the Union Grove Facility and other
parts of the country, manage cash flow and maintain and/or secure adequate
financing and other Risk Factors included in the Registration Statement on Form
SB-2, as amended, filed with the Securities and Exchange Commission (File No.
333-17399.)
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
NOTICE OF VIOLATION. In February 1999 and July 1999, the Company
received Notices of Violation from the Wisconsin Department of Natural Resources
("WDNR") alleging violation of certain state hazardous waste regulations
relating to its Union Grove Facility. The WDNR's letters identified several
alleged violations and informed the Company that the WDNR has the authority to
impose monetary penalties. The Company responded to these violations and entered
into settlement negotiations with the State of Wisconsin of this civil
proceeding. In December 1999, agreement was reached on settlement terms
satisfactory to the State of Wisconsin. Those terms include payment of a civil
fine of $75,000 to be paid over three years. The Company anticipates entering
into a final settlement agreement with the State of Wisconsin in the near
future. While the Company believes it has taken all necessary steps to address
these regulatory concerns, these regulatory issues have and may continue to have
a negative impact on revenue growth and profitability.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
27 -- Financial Data Schedule
(B) Reports on Form 8-K -- no reports on Form 8-K were
filed during the quarter ended March 31, 2000.
<PAGE>
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 thereunto duly authorized
Mercury Waste Solutions, Inc.
----------------------------
(registrant)
Dated: May 12, 2000 \s\ BRAD J. BUSCHER
-------------------
Brad J. Buscher
Chairman of the Board and Chief Executive
Officer
Dated: May 12, 2000 \s\ TODD J. ANDERSON
--------------------
Todd J. Anderson
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THREE MONTHS ENDED MARCH 31, 2000
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 23,793
<SECURITIES> 0
<RECEIVABLES> 1,296,905
<ALLOWANCES> 55,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,521,985
<PP&E> 3,025,743
<DEPRECIATION> 1,203,566
<TOTAL-ASSETS> 5,584,565
<CURRENT-LIABILITIES> 3,039,956
<BONDS> 0
0
0
<COMMON> 34,801
<OTHER-SE> 2,474,566
<TOTAL-LIABILITY-AND-EQUITY> 5,584,565
<SALES> 1,533,419
<TOTAL-REVENUES> 1,533,419
<CGS> 0
<TOTAL-COSTS> 987,896
<OTHER-EXPENSES> 580,773
<LOSS-PROVISION> 2,706
<INTEREST-EXPENSE> 85,552
<INCOME-PRETAX> (123,076)
<INCOME-TAX> 0
<INCOME-CONTINUING> (123,076)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (123,076)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
