<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
FOR SMALL BUSINESS ISSUERS
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
For the Transition period from ____ to ____.
Commission file number 000-23369
FIX-CORP INTERNATIONAL, INC.
(Exact name of small business registrant in its charter)
DELAWARE 34-1783774
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3637 SOUTH GREEN ROAD / SUITE 201
BEACHWOOD, OHIO 44122
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (216) 292-3182
Indicate by check mark whether registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or such shorter period that registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes No X
---- ----
Shares of Registrant's common shares, without par value, outstanding at
May 8, 1998 was
30,108,769
<PAGE>
FIX-CORP INTERNATIONAL, INC.
AND SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 1998................1
Consolidated Income Statement and Retained Earnings for the
quarters ended March 31, 1998 and 1997.........................2
Consolidated Statement of Shareholders' Equity for the quarter
ended March 31, 1998...........................................3
Consolidated Statements of Cash Flows for the quarters ended
March 31, 1998 and 1997........................................4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..........................................5
Part II. Other Information
Item 6. Exhibits.......................................................9
Signatures..............................................................10
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIX-CORP INTERNATIONAL, INC.
AND SUBSIDIARIES
FIXCOR, INC.
PALLET TECHNOLOGIES, INC.
POLY STYLE INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
<TABLE>
<CAPTION>
CONSOLIDATED CONSOLIDATED CONSOLIDATED
3/31/98 3/31/97 12/31/97
------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (AUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
CASH $ 2,827,887 $ 362,078 $ 6,895,619
INVESTMENT IN MARKETABLE SECURITIES 712,047 121,085 108,287
TRADE ACCOUNTS RECEIVABLE 2,895,877 930,390 1,643,503
INVENTORIES 4,477,939 147,053 2,910,220
OTHER CURRENT ASSETS 132,695 386,649 75,285
----------- ----------- -----------
TOTAL CURRENT ASSETS 11,046,445 1,947,255 11,632,914
----------- ----------- -----------
PROPERTY , PLANT AND EQUIPMENT
LAND AND LAND HELD FOR DEVELOPMENT 750,000 750,000 750,000
BUILDINGS 2,044,659 2,000,000 2,000,000
EQUIPMENT 22,792,453 6,764,500 17,738,496
----------- ----------- -----------
25,587,112 9,514,500 20,488,496
LESS ACCUMULATED DEPRE/AMORT (980,310) (107,928) (680,310)
----------- ----------- -----------
PROPERTY, PLANT AND EQUIPMENT-NET 24,606,802 9,406,572 19,808,186
----------- ----------- -----------
OTHER ASSETS
LICENSING AGREEMENTS 30,000 30,000
DEFERRED INCOME TAXES 820,050 412,150 820,050
OTHERS ASSETS AND DEFERRED CHARGES 1,496,285 47,164 1,198,948
----------- ----------- -----------
TOTAL OTHER ASSETS 2,346,335 459,314 2,048,998
----------- ----------- -----------
TOTAL ASSETS $37,999,582 $11,813,141 $33,490,098
----------- ----------- -----------
----------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
NOTES PAYABLE $285,000 $3,774,723 $320,000
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 1,279,085 587,777 4,087,543
CURRENT PORTION OF LONG-TERM DEBT 0 0 3,500,000
TOTAL CURRENT LIABILITIES 1,564,085 4,362,500 7,907,543
----------- ----------- -----------
LONG-TERM DEBT 9,399,327 0 3,280,489
SUBORDINATED CONVERTIBLE DEBENTURES 12,000,000 0 8,000,000
SHAREHOLDERS' EQUITY
PREFERRED STOCK, $.001 par value, 2,000,000 shares
authorized, -0- shares issued or outstanding 0 0 0
COMMON STOCK, $.001 par value, 100,000,000 shares 30,158 2,129 30,058
authorized and 30,158,269 issued and outstanding
as of March 31, 1998
ADDITIONAL PAID-IN CAPITAL 16,086,204 8,568,374 15,786,304
UNREALIZED LOSS ON INVESTMENTS (21,173) (68,673) (21,173)
RETAINED EARNINGS (DEFICIT) (1,059,019) (1,051,189) (1,493,123)
----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 15,036,170 7,450,641 14,302,066
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $37,999,582 $11,813,141 $33,490,098
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
1
<PAGE>
FIX-CORP INTERNATIONAL, INC.
AND SUBSIDIARIES
FIXCOR, INC.
PALLET TECHNOLOGIES, INC.
POLY STYLE INDUSTRIES, INC.
CONSOLIDATED INCOME STATEMENT AND
RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
CONSOLIDATED CONSOLIDATED CONSOLIDATED
QTR ENDED QTR ENDED YEAR ENDED
3/31/98 3/31/97 12/31/97
------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (AUDITED)
<S> <C> <C> <C>
INCOME STATEMENT
REVENUE
MERCHANDISE SALES $4,177,007 $1,168,530 $8,020,304
COST OF SALES
COST OF MERCHANDISE SALES 1,818,773 637,944 6,907,858
------------ ------------ ------------
GROSS PROFIT 2,358,234 530,586 1,112,446
------------ ------------ ------------
OPERATING EXPENSES
SALARIES, WAGES AND RELATED COSTS 291,242 293,676 436,372
LEGAL, PROFESSIONAL, AND CONSULTING FEES 138,585 30,239 346,633
OTHER GENERAL AND ADMINISTRATIVE 1,403,585 242,913 627,222
------------ ------------ ------------
TOTAL OPERATING EXPENSES 1,833,412 566,828 1,410,227
------------ ------------ ------------
OPERATING INCOME (LOSS) 524,822 (36,242) (297,781)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
INTEREST EXPENSE AND FINANCING COSTS-NET 309,282 32,592 94,297
DEPRECIATION AND AMORTIZATION (300,000) (101,500) (751,500)
------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSE) 9,282 (68,908) (657,203)
------------ ------------ ------------
NET INCOME (LOSS) BEFORE INCOME TAXES 534,104 (105,150) (954,984)
PROVISION FOR INCOME TAXES 100,000 0 (407,900)
------------ ------------ ------------
NET INCOME (LOSS) $434,104 ($105,150) ($547,084)
STATEMENT OF RETAINED EARNINGS
RETAINED EARNINGS (DEFICIT) BEGINNING (1,493,123) (946,039) (946,039)
------------ ------------ ------------
RETAINED EARNINGS (DEFICIT) END ($1,059,019) ($1,051,189) ($1,493,123)
------------ ------------ ------------
------------ ------------ ------------
EARNINGS (LOSS) PER COMMON SHARE $0.014 ($0.005) ($0.021)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
2
<PAGE>
FIX-CORP INTERNATIONAL, INC.
AND SUBSIDIARIES
FIXCOR, INC.
PALLET TECHNOLOGIES, INC.
POLY STYLE INDUSTRIES, INC.
CONSOLIDATED STATEMENT
OF SHAREHOLDERS' EQUITY
FOR THE QUARTER ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
TOTAL
ADDITIONAL RETAINED SHARE-
COMMON STOCK PAID-IN EARNINGS HOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1996, AS RESTATED 20,974,024 $20,974 $8,227,529 ($946,039) $7,302,464
PREFERRED STOCK PLACEMENT PROCEEDS:
ISSUANCE OF COMMON STOCK UPON CONVERSION 1,925,000 1,925 1,923,075 1,925,000
PROCEEDS FROM EXERCISE OF RELATED WARRANTS 1,925,000 1,925 1,923,075 1,925,000
PROCEEDS FROM SALE OF RESTRICTED SHARES 3,980,265 3,980 2,396,814 2,400,794
PROCEEDS FROM EXCERCISE OF WARRANTS 500,000 500 62,000 62,500
CANCELLATION AND REISSUANCE OF COMMON SHARES
ISSUED IN 1996 TO SECURE BRIDGE FINANCING 183,000 183 546,342 546,525
ACQUISITION OF EQUIPMENT 571,000 571 707,469 708,040
NET (LOSS) FOR THE PERIOD (547,084) (547,084)
BALANCES AT DECEMBER 31, 1997 30,058,289 30,058 15,786,304 (1,493,123) 14,323,239
PROCEEDS FROM SALE OF RESTRICTED SHARES 300,000 100 299,900 300,000
NET INCOME FOR THE PERIOD 434,104 434,104
BALANCES AT MARCH 31, 1998 30,358,289 $30,158 $16,086,204 ($1,059,019) $15,057,343
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
UNREALIZED HOLDING LOSS ON INVESTMENTS (21,173)
$15,036,170
-----------
-----------
</TABLE>
3
<PAGE>
FIX-CORP INTERNATIONAL, INC.
AND SUBSIDIARIES
FIXCOR, INC.
PALLET TECHNOLOGIES, INC.
POLY STYLE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
QUARTER 12 MOS.
ENDED ENDED
3/31/98 12/31/97
----------- ----------
(UNAUDITED) (AUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) $434,104 ($547,084)
----------- ----------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH USED BY OPERATING ACTIVITIES
DEPRECIATION AND AMORTIZATION EXPENSE 300,000 728,044
INVESTMENT IN MARKETABLE SECURITIES (603,760) 22,405
(INCREASE) IN ACCOUNTS RECEIVABLE (1,222,374) (1,363,068)
(INCREASE) IN INVENTORIES (1,567,719) (2,814,218)
(INCREASE) IN OTHER CURRENT ASSETS (87,410) (45,285)
(INCREASE) IN OTHER ASSETS (317,337) (407,900)
(DECREASE) IN ACCOUNTS PAYABLE AND ACCRUED
EXPENSES (2,808,458) 3,975,219
---------- ----------
NET CASH (USED) BY OPERATING ACTIVITIES (5,872,954) (451,887)
---------- ----------
CASH FLOWS (USED) BY INVESTING ACTIVITIES
PURCHASE OF EQUIPMENT (5,098,616) (11,217,815)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
(PAYMENTS) ON NOTES PAYABLE (35,000) 0
PROCEEDS FROM SALE OF STOCK 300,000 6,438,294
PROCEEDS FROM BORROWINGS 2,638,838 3,902,489
PROCEEDS FROM CONVERTIBLE DEBENTURES 4,000,000 8,000,000
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,903,838 18,340,783
---------- ----------
NET CASH (DECREASE) (4,067,732) 6,671,081
---------- ----------
CASH AT BEGINNING OF PERIOD 6,895,619 224,539
---------- ----------
CASH AT END OF PERIOD $2,827,887 $6,895,620
---------- ----------
---------- ----------
</TABLE>
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain statements contained in this Report, including, without limitation,
statements containing the words "believes," "anticipates," "expects" and words
of similar import, constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: international,
national and local general economic and market conditions; demographic changes;
the size and growth of the plastic packaging markets for both consumer and
industrial uses; the ability of the Company to sustain, manage or forecast its
growth; the ability of the Company to successfully make and integrate
acquisitions; raw material costs and availability; new product development and
introduction; existing government regulations and changes in, or the failure to
comply with, government regulations; adverse publicity; competition; the loss of
significant customers or suppliers; fluctuations and difficulty in forecasting
operating results; changes in business strategy or development plans; business
disruptions; the ability to attract and retain qualified personnel; the ability
to protect technology; and other factors referenced in this Report. Certain of
these factors are discussed in more detail elsewhere in this Report. Given
these uncertainties, readers of this Report and investors are cautioned not to
place undue reliance on such forward-looking statements. The Company disclaims
any obligation to update any such factors or to publicly announce the result of
any revisions to any of the forward-looking statements contained herein to
reflect future events or developments.
DEVELOPMENT STAGE ACTIVITIES
In December, 1996, the Company formed Fixcor, a wholly-owned subsidiary.
This entity acquired the Facility, a stand-alone post-consumer plastic recycling
operation. The acquisition significantly changed the focus of the Company from
corporate awards jewelry marketing and financing to the manufacturing of plastic
resin.
With this acquisition, the Company's business plan may be divided into four
phases based upon the services performed, the products produced, and the
products and services to be performed and produced.
Note 2(C.) to the December 31, 1996 audited financial statements indicates
that for the year ended December 31, 1995, the Company incurred a bad debt of
$962,471. This charge to earnings related to the Company's Purchase Order
Financing business. As a result of an uncollectible financing, the Company
incurred this expense. After incurring this loss, the Company changed the
procedures it utilized to secure its interest in these transactions to preclude
any future losses. In fact, no losses have been incurred in these transactions
since 1995.
5
<PAGE>
For the years 1996 and 1997, no bad debt provision was deemed necessary
since in the opinion of management all trade receivables are collectible
including the insignificant amount of purchase order financing receivables
outstanding as of December 31, 1997, $30,000.
PHASE 1
This phase of the business plan relates to the source of the Company's
revenues prior to acquisition of the Facility now owned and operated by Fixcor.
The sources of these revenues were corporate awards jewelry marketing and the
extension of financing to small businesses collateralized by purchase orders.
PHASE 2
With the acquisition of the Facility in Heath, Ohio, the Company, through
its wholly-owned subsidiary, became the owner and operator of a stand-alone
post-consumer plastic recycling operation. This operation contains three
operating lines. The first became operational January 8, 1997, the second March
4, 1997, and the third October 22, 1997. Since the acquisition of this
Facility, the corporate awards jewelry marketing and the financing of purchase
orders has become an immaterial portion of the revenues and operations of the
Company. Funding of the Facility acquisition was made by obtaining bridge
financing in the amount of $2.5 million from Gordon Brothers Capital Corp., and
the issuance of 5,000,000 restricted common shares of the Company. The bridge
financing was secured by a mortgage on the Facility, and a security interest in
all inventory, accounts receivables and contracts with customers, and a personal
guarantee of Mr. Fixler. On May 14, 1997, the Company replaced this bridge
financing with permanent financing from NationsCredit Commercial Corporation for
up to $7,000,000. This financing consisted of a security agreement on all of
Fixcor's assets, and a credit line based upon a percentage of inventory and
accounts receivable. All financing from NationsCredit Commercial Corporation
was refinanced through Gordon Brothers Capital, LLC (successor to Gordon
Brothers Capital Corp.) in December, 1997. This resulted in the Company, Fixcor
and Pallet Technology being the borrowers on a revolving credit facility in the
principal amount of $7,000,000, $3,500,000 of which principal matures in
October, 1998.
PHASE 3
On July 7, 1997, the Company formed another wholly-owned subsidiary,
Pallet Technology. The purpose of this subsidiary is to specialize in the
production of plastic pallets. Pallet Technology has ordered a specialized,
state-of-the-art, injection molding machine which transforms resin pellets,
produced by Fixcor, into plastic pallets. Installation of this equipment was
completed during January, 1998 and management expects to have it operating at
full capacity by the end of the first quarter of fiscal year 1998. The
approximate cost of the equipment, molds, transportation and installation of
the equipment for Pallet Technology's operation at the Facility is $4.0
million, and the approximate cost of equipment, transportation and
installation at the Florida Plant is expected to be approximately $3,000,000.
The total cost of molds, which has not yet been determined, is not included in
this amount. The cost of the standard pallet mold is approximately $700,000,
and additional molds are on order. Not taking into consideration Pallet
Technology's operations at the Florida Plant, which the Company
6
<PAGE>
expects to commence during the third quarter of fiscal year 1998, the Company
conservatively estimates that Pallet Technology revenues for 1998 will be
$13.0 million. With Pallet Technology operations running at the Florida
Plant, the Company estimates that 1998 revenues will be $20.0 million.
Permanent financing for the Pallet Technology equipment for installation at
the Facility was secured from Gordon Brothers Capital Corp.
PHASE 4
During September, 1997, the Company's wholly-owned subsidiary, Fixcor
entered into an agreement with AlliedSignal. Under this licensing agreement,
Fixcor is entitled to utilize technology owned by Allied in the recovery of oil
and plastic from shredded motor oil containers. This process produces two
useable products from a previous waste stream. The Company expects to commence
these operations during fiscal year 1998. The agreement requires Fixcor to pay
royalties to Allied based upon the volume of recycling performed by Fixcor under
these licenses.
PHASE 5
During February, 1998, the Company's wholly-owned subsidiary, Poly Style
entered into the UV Agreement, under which Poly Style acquired substantially all
of the assets of UV at the UV Plant, for a purchase price of approximately $3.0
million. Poly Style manufactures plastic vertical window blinds from extruded
PVC. Poly Style's operations commence shortly after the acquisition at the UV
Plant and are expected to be moved to the Florida Plant in May, 1998.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1997, AS COMPARED TO THE
QUARTER ENDED MARCH 31, 1998
A review of the first quarter of fiscal year 1998 as compared to the
results of operations from the same period in 1997 indicates that the Company
has continued to grow and improved its profitability. Gross margins for the
first quarter of 1998 were $2,358,234 versus $530,586 for the prior year.
This growth is a result of increased resin sales from expanded capacity and
operations at the Facility, the startup and sales of plastic pallets by Pallet
Technology during the latter part of the first quarter of 1998, and the
profitability of the Poly-Style operations. Gross margins for these entities
are summarized below:
<TABLE>
<CAPTION>
SALES COGS GROSS MARGIN
<S> <C> <C> <C>
COMPANY 100,340 42,190 58,150
FIXCOR 3,468,573 1,549,771 1,936,802
POLY STYLE 72,026 28,810 43,216
PALLET 518,068 198,002 320,066
</TABLE>
7
<PAGE>
TECHNOLOGY
Another source of income for the period related from the increased value of
funds invested in marketable securities. As a result of these gains, the
Company recognized $600,000 of income from this source.
During the quarter, additional long-term financing was obtained in two
forms. First, the Company borrowed an additional $2.0 million on its facility
with the Gordon Brothers Capital Corp. These monies were used to fund the
Company's growing working capital needs. These needs are a result of increased
production and sales with their impact of requiring the Company to incur
increasing receivable and inventory balances.
Another source of financing was the receipt of $4.0 million in the form of
subordinated convertible debentures. These debentures bring the total amount of
this form of debt to $12.0 million. (An additional $3.0 million in debentures
were sold in April, 1998.) These monies are used to fund the long-term growth
needs of the Company. These needs include additional equipment and building
expansions to accommodate the growth of the Company.
LIQUIDITY AND CAPITAL RESOURCES AS OF MARCH 31, 1998
As of March 31, 1998, other than ordering and installing equipment for use
by Pallet Technology at the Florida Plant in capital expenditures and
commitments therefor were minimal. As of that date Pallet Technologies had
ordered its equipment, making a commitment of approximately at least $3.7
million. This additional equipment for Pallet Technology's operations at the
Florida Plant is expected to be installed during the second and third quarters
of fiscal year 1998. Management believes that the present cash balances and
funding available through the permanent financing and line of credit will be
sufficient to meet the needs of the Fixcor operations. However, additional
funding may be necessary with regard to the Pallet Technology operations in
connection with their commencement during the second and third quarters of
fiscal year 1998, and in connection with the commencement of PolyStyles
operations during that period. Management is working with financial
institutions to ensure that sufficient monies are available to meet these needs,
and it is believed that those monies will be available.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-5 ARE NOT APPLICABLE
ITEM 6. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
27.1 Financial Data Schedule (submitted electronically to the
Commission for information only and not filed)
</TABLE>
9
<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.
FIX-CORP INTERNATIONAL, INC.
By /s/ Andrew I. Press
-----------------------------------------
Andrew I. Press
Chief Financial Officer
(Principal Financial Officer)
Date: May 15, 1998
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AT MARCH 31,
1997 AND 1998 AND THE BALANCE SHEETS AND STATEMENTS OF INCOME AT DECEMBER 31,
1997 OF THE COMPANY'S 1997 ANNUAL REPORT TO STOCKHOLDERS AND IS QUALIFIED IN ITS
ENTIRETY BY REFRENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1998 MAR-31-1997 DEC-31-1997
<CASH> 2,827,887 362,078 6,895,619
<SECURITIES> 712,047 121,085 108,287
<RECEIVABLES> 2,895,877 930,390 1,643,503
<ALLOWANCES> 0 0 0
<INVENTORY> 4,477,939 147,053 2,910,220
<CURRENT-ASSETS> 11,046,445 1,947,255 11,632,914
<PP&E> 25,587,112 9,514,500 20,488,496
<DEPRECIATION> (980,310) (107,928) (680,310)
<TOTAL-ASSETS> 37,999,582 11,813,141 33,490,098
<CURRENT-LIABILITIES> 1,564,085 4,362,500 7,907,543
<BONDS> 21,399,327 0 11,280,489
0 0 0
0 0 0
<COMMON> 30,158 2,129 30,058
<OTHER-SE> 15,006,012 7,448,512 14,272,008
<TOTAL-LIABILITY-AND-EQUITY> 37,999,582 11,813,141 33,490,098
<SALES> 4,177,007 1,168,530 8,020,304
<TOTAL-REVENUES> 4,486,289 1,201,122 435,004
<CGS> (1,818,773) (637,944) (6,992,829)
<TOTAL-COSTS> (2,133,412) (668,328) (2,045,767)
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 (340,707)
<INCOME-PRETAX> 534,104 (105,150) (954,984)
<INCOME-TAX> 100,000 0 (407,900)
<INCOME-CONTINUING> 434,104 (105,150) (547,084)
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 434,104 (105,150) (547,084)
<EPS-PRIMARY> 0.017 (0.007) (0.021)
<EPS-DILUTED> 0.014 (0.006) (0.018)
</TABLE>
