<PAGE>
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 APRIL 30, 1998
-- or --
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO _____________
-----------------------------
FINE.COM INTERNATIONAL CORP.
Name of small business issuer as specified in its charter
0-22805
Commission File Number
STATE OF WASHINGTON 91-1657402
State or Other Jurisdiction of I.R.S. Employer Identification Number
Incorporation or Organization
1525 FOURTH AVENUE, SUITE 800
SEATTLE, WASHINGTON 98101
Address of Principal Executive Offices
(206) 292-2888
Issuer Telephone Number
-----------------------------
Check whether the registrant (1) filed all reports required Yes [X] No [_]
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.
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
The number of shares of the registrant's common stock, no par value per share,
outstanding as of June 15, 1998 was 2,415,935.
<PAGE>
FINE.COM INTERNATIONAL CORP.
FORM 10-QSB
FOR THE QUARTER ENDED APRIL 30, 1998
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited) 2
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE PAGE 12
EXHIBIT 13
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
fine.com International Corp.
BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, January 31,
1998 1998
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 244,330 $1,419,591
Marketable securities 1,593,032 1,593,032
Accounts receivable, less allowances 1,028,504 942,243
Work-in-progress 285,433 179,505
Income taxes refundable 784 784
Prepaid expenses and other 301,365 147,668
Notes receivable from officer 24,101 26,686
---------- ----------
TOTAL CURRENT ASSETS 3,477,549 4,309,509
Marketable securities 2,325,236 2,325,236
Other long-term assets 109,734 60,724
Deferred income tax asset 353,855 220,318
Equipment & furniture, net 947,813 435,721
---------- ----------
TOTAL ASSETS $7,214,187 $7,351,508
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 198,865 $ 172,668
Accrued expenses 47,679 48,357
Advance payments -- 70,500
Note payable to shareholder 49,000 --
Deferred income tax liabilities 314,121 322,337
Capitalized lease obligations 2,397 3,864
---------- ----------
TOTAL CURRENT LIABILITIES 612,062 617,726
SHAREHOLDERS' EQUITY:
Common Stock, no par value:
10,000,000 shares authorized, 2,415,935 shares issued and
outstanding at April 30, 1998; and 9,000,000 shares authorized,
2,380,065 shares issued and outstanding at January 31, 1998 6,686,440 6,542,960
Retained earnings (deficit) (12,593) 220,318
Unrealized loss on marketable securities (71,722) (29,496)
---------- ----------
Total shareholders' equity 6,602,125 6,733,782
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,214,187 $7,351,508
========== ==========
</TABLE>
See accompanying notes.
-2-
<PAGE>
fine.com International Corp.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Gross revenue $ 987,830 $ 811,433
Direct salaries and costs 759,358 553,942
---------- ----------
Gross profit 228,472 257,491
Selling, general and administrative expenses 684,308 184,159
---------- ----------
Operating income (loss) (455,836) 73,332
Interest income 103,650 --
Interest expense (725) (7,538)
---------- ----------
Income (loss) before income taxes (352,911) 65,794
Provision (benefit) for income taxes (120,000) 22,370
---------- ----------
Net income (loss) $ (232,911) $ 43,424
========== ==========
Basic and diluted net income (loss) per share $(0.10) $0.04
========== ==========
Shares used in computation of net income (loss) per share:
Basic 2,411,099 1,055,541
Diluted 2,411,099 1,162,896
</TABLE>
See accompanying notes.
-3-
<PAGE>
fine.com International Corp.
STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1998 1997
----------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (232,911) $ 43,424
Depreciation and amortization 59,974 14,785
Deferred income tax (benefit) (120,000) 22,370
Net changes in:
Accounts receivable (86,261) (197,206)
Work-in-process (105,928) (87,652)
Prepaid expenses and other (140,826) (9,655)
Deferred offering costs -- (132,673)
Accounts payable 26,197 113,044
Accrued expenses (678) 9,952
Deferred revenue (70,500) (36,722)
----------- ---------
Total cash used in operating activities (670,933) (260,333)
CASH FLOWS FROM INVESTING ACTIVITIES
Other Assets (19,010) --
Purchase of equipment and furniture (486,436) (87,257)
----------- ---------
Total cash used in investing activities (505,446) (87,257)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in note payable to bank -- 205,000
Payments on capital lease obligations (1,467) (1,331)
Net change in note receivable from officer 2,585 (18,838)
Decrease in note payable to director -- (15,000)
----------- ---------
Total cash provided by financing activities 1,118 169,831
----------- ---------
Net decrease in cash and cash equivalents (1,175,261) (177,759)
Cash and cash equivalents at beginning of period 1,419,591 198,317
----------- ---------
Cash and cash equivalents at end of period $ 244,330 $ 20,558
=========== =========
SUPPLEMENTAL CASH FLOW INFORMATION
Acquisition of Pacific Analysis and Computing Corporation in exchange for 35,870 shares of common stock:
Common stock 143,480 --
Net current assets 27,850 --
Non-current assets 115,630 --
</TABLE>
See accompanying notes.
-4-
<PAGE>
fine.com International Corp.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
fine.com International Corp. (the "Company") in accordance with generally
accepted accounting principles for interim financial statements and with the
instructions to Form 10-QSB and Item 310 of Regulation S-B. Accordingly, they
do not include all of the information and disclosures required by generally
accepted accounting principles for complete financial statements. In the
opinion of the Company's management, all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation have been included.
Results of operations for the three month period ended April 30, 1998 are not
necessarily indicative of future financial results. For further information,
refer to the financial statements and footnotes thereto for the fiscal year
ended January 31, 1998, included with the Company's Form 10-KSB, as filed with
the Securities and Exchange Commission (the "Commission").
New Accounting Pronouncements. In 1997, the Financial Accounting Standards
Board issued SFAS No. 130, "Reporting Comprehensive Income", which requires
disclosure of an additional basis of measuring income. Comprehensive income for
the three months ended April 30, 1998 was a loss of $275,137 verses income of
$43,424 for the same period in 1997.
2. NOTE PAYABLE TO BANK
The Company has a Revolving Line of Credit with a commercial bank for
$750,000 which expires on June 30, 1998, and is secured by all accounts
receivable and the personal guarantee of the Company's Chairman and Chief
Executive Officer. The Company is negotiating for renewal of the Revolving Line
of Credit through fiscal 1999. Amounts outstanding under the Revolving Line of
Credit bear interest at the bank's prime interest rate plus 0.25% (effective
rate of 8.75% at April 30, 1998). At April 30, 1998, no amounts were outstanding
under the Revolving Line of Credit.
The Revolving Line of Credit requires that the Company maintain working
capital amounts (as calculated therein), tangible net worth and the maximum
capital expenditures (as defined therein). The Revolving Line of Credit limits
the Company's ability to incur additional debt, to repurchase the Company's
capital stock or amend its capital structure, to pay cash dividends or to
undergo a merger, consolidation or liquidation. In addition, a change in
ownership of twenty-five percent of the common stock constitutes an event of
default. The Company met all Revolving Line of Credit covenants at April 30,
1998.
-5-
<PAGE>
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Fiscal Quarter Ended April 30,
------------------------------
1998 1997
---------- ----------
<S> <C> <C>
Numerator:
Net income (loss)......................................... $ (232,911) $ 43,424
========== ==========
Denominators:
Denominator for basic earnings per share
Weighted average common stock............................. 2,411,099 1,055,541
Effect of dilutive securities:
Weighted average convertible preferred stock.............. -- 59,524
Employee stock options.................................... -- 47,831
---------- ----------
Denominator for diluted earnings per share
Adjusted weighted average shares and assumed conversions.. 2,411,099 1,162,896
========== ==========
Basic earnings per share.................................... $ (0.10) $ 0.04
========== ==========
Diluted earnings per share.................................. $ (0.10) $ 0.04
========== ==========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-QSB contains forward-looking statements
which reflect the Company's current views with respect to future events and
financial performance. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or those anticipated. Words used in this Report such as
"believe", "anticipate", "expect", "may", "will" and similar expressions are
intended to identify forward-looking statements but are not the exclusive means
of identifying such statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. The Company does not undertake any
obligation to update or revise these forward-looking statements to reflect any
future events or circumstances. Readers are urged to carefully review and
consider the various disclosures made by the Company in this Report, including
those under the section entitled "Other Factors that may Affect Operating
Results," which consist primarily of a brief discussion of certain risks and
which are in their entirety forward-looking statements, and those included in
the Company's other reports previously filed with the Commission, including the
disclosures in the "Risk Factors" section appearing in the Form 10-KSB for the
fiscal year ended January 31, 1998 and the Company's registration statement on
Form SB-2.
The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with (i) the financial
statements and accompanying notes
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<PAGE>
appearing in this Report, and (ii) the Company's financial statements and
accompanying notes appearing in the Company's Form 10-KSB for the fiscal year
ended January 31, 1998, as filed with the Commission.
OVERVIEW
The Company plans, develops, maintains and hosts Web sites for major
national and international corporate clients and others. The Company's Web site
development process utilizes marketing expertise and state of the art
interactive database compilation and dissemination techniques and technologies.
Through the planning, development, maintenance and hosting of interactive Web
presentations, the Company enhances clients' marketing campaigns, fosters the
collection of demographic data which is utilized by clients when allocating
marketing resources and facilitates both internal and external corporate
communications for clients.
The Company generates substantially all of its revenues from fees
associated with the planning and development of commercial Web sites for
clients. These fees are generally earned pursuant to long-term fixed fee
contracts (with terms typically ranging from two to five months). Revenues
generated from long-term contracts are recognized under the percentage-of-
completion method. Percentage-of-completion is generally measured on the
attainment of specific contract milestones (based on the ratio of costs incurred
to total estimated project costs). Estimated earnings from long-term contracts
are reviewed periodically as work progresses. All other revenue is recorded on
the basis of performance of services. The Company assumes greater financial risk
on fixed fee contracts than on either time-and-material or cost-reimbursable
contracts. Failure to anticipate technical problems, estimate costs accurately
or control costs during performance of a fixed fee contract may reduce the
Company's profit or cause a loss individually on a particular project and in the
aggregate.
The Company continues to generate recurring revenues from Web site
maintenance and Web site hosting fees. The amount of revenue generated to date
from the Company's provision of such services has not been significant. Even if
revenues from such sources increase, fees for maintenance and hosting services
may not become a significant percentage of the Company's revenues, if and to the
extent that revenues increase from the planning and development of Web sites.
No assurance can be given that revenues from maintenance and hosting fees, or
from other new methods of generating recurring revenues, will be sufficient to
offset the costs incurred by the Company in performing such services.
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED APRIL 30, 1998 AND 1997
Gross Revenue. Gross revenue for the three months ended April 30, 1998 and
1997 was $987,830 and $811,433, respectively. During each of these three-month
periods, substantially all of the Company's revenue was generated by its Web
site planning and development services. The 22% increase in the first quarter of
fiscal 1999 gross revenue over gross revenue for the same period in fiscal 1998
is attributable primarily to an increase in the average amount billed per client
for such services from approximately $45,000 per client in the first three
months of fiscal 1998 to approximately $49,000 for the same period in fiscal
1999, as well as to the number of clients contracting with the Company for such
services increasing from approximately 17 clients in the first three months of
fiscal 1998 to approximately 19 clients for the same period in fiscal 1999. The
Company believes that the increase in the number of clients was attributable to
increased levels of marketing, advertising and new business development
activities.
Direct Salaries and Costs. Direct salaries and costs include all internal
labor costs and other direct costs related to project performance, such as
project specific independent contractor fees, supplies and specific project-
related expenditures. The Company's direct salaries and costs for the three
months
-7-
<PAGE>
ended April 30, 1998 were $759,358 and consisted primarily of $658,033 paid as
direct salaries, taxes and benefits and secondarily of $101,325 as other direct
costs of goods sold related to specific projects. The Company hired 16
additional employees during the first quarter of fiscal 1999 to meet anticipated
demand and had 42 full-time production employees and 17 sales and administrative
personnel at April 30, 1998. This includes the Company's efforts to hire
personnel for its offices located in the Mid-Atlantic and Southern California
regions. The Company expects that it will hire additional staff if and as needed
to meet demand from current clients and prospective clients whose projects are
anticipated to commence within ninety days after hiring. The Company also
engages independent contractors and subcontractors to service unanticipated
projects. The Company's direct salaries and costs for the three months ended
April 30, 1997 were $553,942 and consisted, primarily, of $285,745 paid as
direct salaries, taxes and benefits and secondarily, of $268,197 as other direct
costs of goods sold related to specific projects. The Company had 20 full-time
production employees and 4 administrative personnel at April 30, 1997.
As a percentage of gross revenue, total direct salaries and costs increased
9% for the first quarter of fiscal 1999 over the same period in fiscal 1998.
Such increase was due primarily to increases in the number of employees and
secondarily to the increase in costs associated with serving clients outside of
the Seattle, Washington area.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $684,308 and $184,159 for the three months ended
April 30, 1998 and 1997, respectively. In each period, these expenses consisted
primarily of sales and administrative salaries, professional fees, occupancy
costs, telephone and related Internet connectivity fees, computer network costs,
office expenses and supplies, marketing, advertising and new business
development costs. The increase in expenses from fiscal 1998 to 1999 was
primarily due to the addition of sales and administrative personnel and
secondarily to the depreciation and amortization associated with the addition of
equipment and leasehold improvements, the insurance and professional fees
incurred as part of being a public company, telephone costs, administrative
services and rent costs.
Marketing, advertising and new business development costs increased as a
percentage of gross revenue in the first three months of fiscal 1999 from the
first three months of fiscal 1998. Marketing, advertising and new business
development costs were $117,858 (representing 12% of gross revenue) in the first
three months of fiscal 1999, as compared to $37,437 (representing 5% of gross
revenue) in the first three months of fiscal 1998. This increase is primarily
the result of two efforts undertaken by the Company: first, the continuation of
the feasibility study with Mitsui & Co., Ltd. ("Mitsui") in Japan to determine
the possibility of providing services to the Japanese market, and second, the
initiation of sales and marketing activities related to the new offices opened
by the Company in the last two quarters; in Santa Monica, California, in
Bethesda, Maryland, and outside of London, England. The Company anticipates
that, as a result of these efforts, revenue should be generated from both of
these areas within the next 90 days, although no assurances can be given that
the Company's efforts will be successful in the time periods indicated, or at
all. In addition, in the first quarter of fiscal 1999, the Company successfully
completed three asset acquisitions, including the acquisition of Pacific
Analysis and Computing Corporation ("Pacific Analysis"). The Company may, in
the future, acquire other businesses or technologies that are complimentary to
those of the Company, the results of which could include significant charges for
amortization of acquired assets and other acquisition-related expenses.
Overall, selling, general and administrative expenses as a percentage of
gross revenue were 69% for the three months ended April 30, 1998 as compared to
23% for the three months ended April 30, 1997. This overall increase in
selling, general and administrative expenses as a percentage of gross revenue
was a primarily the result of the costs associated with operating three
additional offices, an increased level of
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<PAGE>
sales and marketing expenditures which did not yield a corresponding increase in
revenues during the same reporting period and the Company's compliance and
reporting obligations associated with being a publicly held company.
Net Income. The Company recognized a net loss of $232,911 (representing
24% of gross revenue) for the first three months of fiscal 1999 as compared to
net income of $43,424 (representing 5% of gross revenue) for the same period in
fiscal 1998. The decrease in profitability (as a percentage of gross revenue)
is due to the factors discussed above.
CAPITAL RESOURCES AND LIQUIDITY
Historically, the Company has funded its capital requirements through
earnings, borrowings from affiliates and commercial lenders and equity financing
and private placements of its capital stock. The Company had cash and cash
equivalents and marketable securities in the aggregate amount of $4,162,598 and
$5,337,859 at April 30, 1998 and January 31, 1998, respectively.
The Company's working capital decreased $826,296, from $3,691,783 at
January 31, 1998 to $2,865,487 at April 30, 1998. Operating activities for the
three months ended April 30, 1998 required net cash in the amount of $670,933,
primarily due to increases in the number of employees, as well as increases in
accounts receivable, work-in-process, and prepaid expenses. Accounts receivable
increased $86,261, from $942,243 at January 31, 1998 to $1,028,504 at April 30,
1998, primarily due to the increase in gross revenue during the three months
ended April 30, 1998. Work-in-process increased $105,928 from $179,505 at
January 31, 1998. Prepaid expenses increased $140,826 due to deposits made for
equipment, furniture and fixtures, and leasehold improvements.
The purchase of equipment and furniture required cash in the amount of
$486,436 during the three months ended April 30, 1998. These expenditures were
made primarily for computer hardware and software, furniture, fixtures and
leasehold improvements necessary to accommodate an increase in Company
personnel. Net cash provided from financing activities was $1,118.
The Company has a Revolving Line of Credit with a commercial bank for
$750,000 which expires on June 30, 1998, and is secured by all accounts
receivable and the personal guarantee of the Company's Chairman and Chief
Executive Officer. The Company is negotiating for renewal of the Revolving Line
of Credit through fiscal 1999. Amounts outstanding under the Revolving Line of
Credit bear interest at the bank's prime interest rate plus 0.25% (effective
rate of 8.75% at April 30, 1998). At April 30, 1998, no amounts were
outstanding under the Revolving Line of Credit. The Revolving Line of Credit
requires that the Company maintain working capital amounts (as calculated
therein), tangible net worth and the maximum capital expenditures (as defined
therein). The Revolving Line of Credit limits the Company's ability to incur
additional debt, to repurchase the Company's capital stock or amend its capital
structure, to pay cash dividends or to undergo a merger, consolidation or
liquidation. In addition, a change in ownership of twenty-five percent of the
common stock constitutes an event of default. The Company met all Revolving
Line of Credit covenants at April 30, 1998.
The Company believes that existing cash and cash equivalent balances, cash
generated from operations and the funds available to it under credit facilities,
together with the remaining proceeds from the initial public offering, will be
sufficient to fund its operations through the next fiscal year.
-9-
<PAGE>
OTHER FACTORS THAT MAY AFFECT OPERATING RESULTS
The Company's operating results may fluctuate due to a number of factors,
including, but not limited to, its ability to generate revenues from its
recently opened offices in Bethesda, Maryland, Santa Monica, California and just
outside of London, England, the success of the continued feasibility study with
Mitsui, the ability of the Company to develop and expand relationships with new
and existing clients, the increased level of competition in the market, the
ability to retain and hire experienced and qualified personnel and general
economic conditions in the industry. All of the above factors are difficult for
the Company to forecast, and any one of which may materially adversely affect
the Company's business and operating results for one quarter or a series of
quarters.
PART II -- OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company's Registration Statement on Form SB-2, as amended (file number
333-26855), relating to the Company's initial public offering of the Company's
common stock, was declared effective by the Commission on August 11, 1997. From
the effective date of the Registration Statement through the end of the
Company's fiscal quarter ended April 30, 1998, the Company has applied its net
proceeds as follows:
<TABLE>
<S> <C>
Net proceeds from IPO..................................... $6,228,042
Accounts receivable, work-in-process and other
working capital requirement............................... (855,533)
Capital expenditures for fixed assets..................... (795,385)
Repayment of indebtedness................................. (467,615)
Unapplied proceeds held in money market funds and
marketable securities at April 30, 1998.................. $4,109,509
==========
</TABLE>
The Company believes that none of these payments were made, directly or
indirectly, to: (i) directors or officers of the Company or their affiliates;
(ii) persons owning ten percent or more of the Company's common stock; or (iii)
affiliates of the Company. To date, the Company believes that it has used the
offering proceeds in a manner consistent with the use of proceeds described in
the Registration Statement and Prospectus.
In February 1998, the Company successfully closed its acquisition of
Pacific Analysis, as a result of which the Company issued 35,870 shares of
Common Stock valued at $143,480, in exchange for all outstanding Pacific
Analysis shares. These shares of Company Common Stock were issued in reliance
on an exemption from the registration requirements of the Securities Act of
1933, as amended, and are unregistered shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27.1 Financial data schedule
(b) REPORTS ON FORM 8-K
-10-
<PAGE>
A report on Form 8-K was filed on April 14, 1998, reporting Item 5
information relating to the change of name of the Company from "fine.com
Corporation" to "fine.com International Corp."
-11-
<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.
Dated June 15, 1998.
fine.com International Corp.
(Registrant)
By /s/ Daniel M. Fine
_____________________________________
Daniel M. Fine
President and Chief Executive Officer
(principal executive officer)
By /s/ James P. Chamberlin
_____________________________________
James P. Chamberlin
Secretary and Chief Financial Officer
(principal financial and
principal accounting officer)
-12-
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
27.1 Financial Data Schedule
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JAN-31-1999 JAN-31-1998
<PERIOD-START> FEB-01-1998 FEB-01-1997
<PERIOD-END> APR-30-1998 APR-30-1997
<CASH> 244,330 20,558
<SECURITIES> 1,593,032 0
<RECEIVABLES> 1,028,504 673,972
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 3,477,549 851,303
<PP&E> 1,158,057 230,069
<DEPRECIATION> 210,244 76,770
<TOTAL-ASSETS> 7,214,187 1,259,252
<CURRENT-LIABILITIES> 612,062 761,274
<BONDS> 0 0
0 0
0 239,918
<COMMON> 6,686,440 75,000
<OTHER-SE> (84,315) 183,060
<TOTAL-LIABILITY-AND-EQUITY> 7,214,187 1,259,252
<SALES> 987,830 811,433
<TOTAL-REVENUES> 987,830 811,433
<CGS> 759,358 553,942
<TOTAL-COSTS> 759,358 553,942
<OTHER-EXPENSES> 684,308 184,159
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 725 7,538
<INCOME-PRETAX> (352,911) 65,794
<INCOME-TAX> (120,000) 22,370
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (232,911) 43,424
<EPS-PRIMARY> (0.10) 0.04
<EPS-DILUTED> (0.10) 0.04
</TABLE>
