<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File No. 0-23587
CHAPMAN HOLDINGS, INC.
(Name of small business issuer in its charter)
Maryland 52-206977
- ---------------------------- ------------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation)
401 East Pratt Street, 28th Floor, Baltimore, Maryland 21202
--------------------------------------------------------------
(Address of Principal Executive Office)
Issuer's telephone number, including area code: (410) 625-9656
Securities registered under Section 12(b) of the Exchange Act: None Securities
registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
----------------------------------------
(Title of Class)
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 No X
--- ---
As of May 12, 1998, 2,953,622 shares of the registrant's common stock, par value
$0.001 per share, were outstanding.
Transitional Small Business Disclosure Format: Yes No X
---- -----
<PAGE>
TABLE OF CONTENTS
Page
----
PART I..................................................................
ITEM 1 FINANCIAL STATEMENTS..................................
ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS...................
PART II.................................................................
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS.............
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K......................
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1--FINANCIAL STATEMENTS
The consolidated financial statements for the three months ended
March 31, 1998 have not been audited but, in the opinion of management,
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position and results of operations
of the Company as of such date and for such period. The unaudited
consolidated financial statements should be read in conjunction with the
Consolidated Financial Statements of the Company and the Notes thereto
appearing in the Company's Form 10-KSB. The results of operations for the
three months ended March 31, 1998 are not necessarily indicative of the
results of operations that may be expected for the year ending December 31,
1998 or any future periods.
<PAGE>
CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997, AND MARCH 31, 1998
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 211,342 $ 7,045,772
Cash deposits with clearing organization 40,116 40,116
Investments, available for sale 169,306 170,913
Receivables from brokers and dealers 322,303 144,821
Receivables from affiliated company 800,672 878,430
Receivables from affiliates 245 408
Advances to officer/employee 176,051 485,318
Office equipment, net 17,343 17,343
Prepaids and other assets 81,338 78,740
Net assets from discontinued operations 1,044,870 --
----------- -----------
Total assets $ 2,863,586 $ 8,861,861
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 68,864 $ 102,098
Accrued compensation 68,910 93,100
Deferred rent 89,048 89,048
Payable to affiliated partnership 9,846 --
Income taxes payable 205,837 214,934
Net liabilities from discontinued operations 1,172,387 --
----------- -----------
Total liabilities 1,614,892 499,180
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 20,000,000 shares authorized,
1,989,235 and 2,953,622 shares issued and outstanding,
respectively 1,989 2,954
Additional paid-in capital 1,091,461 8,015,595
Retained earnings 155,244 344,132
----------- -----------
Total stockholders' equity 1,248,694 8,362,681
----------- -----------
Total liabilities and stockholders' equity $ 2,863,586 $ 8,861,861
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
<PAGE>
CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1997 1998
---------- -----------
(Unaudited)
<S> <C> <C>
REVENUE:
Commissions $ 532,213 $ 702,475
Underwriting and management fees 28,851 47,135
Interest and dividends 9,156 55,821
---------- -----------
Total revenue 570,220 805,431
---------- -----------
EXPENSE:
Compensation and benefits 278,936 347,216
Floor brokerage and clearing fees 73,927 89,022
Communications 41,822 45,312
Occupancy, equipment rental, and depreciation 88,724 92,133
Travel and business development 50,168 33,483
Professional fees 11,085 35,467
Other operating expense 69,410 69,240
---------- -----------
Total expense 614,072 711,873
---------- -----------
(Loss) income from continuing operations before income
tax provision (43,852) 93,558
INCOME TAX (BENEFIT) PROVISION (18,326) 38,211
---------- -----------
(Loss) income from continuing operations (25,526) 55,347
LOSS FROM DISCONTINUED OPERATIONS (3,801) --
---------- -----------
Net (loss) income $ (29,327) $ 55,347
---------- -----------
---------- -----------
BASIC AND DILUTIVE EARNINGS PER SHARE DATA:
(Loss) income from continuing operations $ (0.01) $ 0.02
Loss from discontinued operations -- --
---------- -----------
Net (loss) income $ (0.01) $ 0.02
---------- -----------
---------- -----------
Weighted average shares outstanding 2,039,914 2,310,697
---------- -----------
---------- -----------
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
<PAGE>
CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
AND THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Retained
Additional Earnings Total
Common Paid-In (Accumulated Stockholders'
Stock Capital Deficit) Equity
------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1995 $ 2,005 $ 1,540,445 $(586,724) $ 955,726
Net income -- -- 404,981 404,981
Purchase of 59,750 shares of
stock (60) (231,440) -- (231,500)
------- ----------- --------- -----------
BALANCE, December 31, 1996 1,945 1,309,005 (181,743) 1,129,207
Net income -- -- 336,987 336,987
Purchase of 152,250 shares of
stock (152) (217,348) -- (217,500)
Issuance of 196,594 shares of
stock in exchange for a stock
warrant 196 (196) -- --
------- ----------- --------- -----------
BALANCE, December 31, 1997 1,989 1,091,461 155,244 1,248,694
Net capital from discontinued
operations -- -- 133,541 133,541
Net proceeds from initial public
offering of 964,387 shares of
common stock 965 6,924,134 -- 6,925,099
Net income -- -- 55,347 55,347
------- ----------- --------- -----------
BALANCE, March 31, 1998
(unaudited) $ 2,954 $ 8,015,595 $ 344,132 $ 8,862,681
------- ----------- --------- -----------
------- ----------- --------- -----------
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
<PAGE>
CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1997 1998
---------- -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (29,327) $ 55,347
Adjustments to reconcile net income to net cash (used in)
operating activities:
Effect from changes in assets and liabilities-
Receivables from brokers and dealers 19,600 177,482
Receivables from affiliates 100 (163)
Receivables from affiliated company (22,624) (77,758)
Advances to officer/employee (13,506) (309,267)
Prepaids and other assets (4,705) 2,598
Net assets from discontinued operations 42,899 1,044,870
Accounts payable and accrued expenses 41,969 33,234
Accrued compensation (14,507) 24,190
Payable to affiliated partnership (59,076) (9,846)
Income taxes payable (156,048) 9,097
Net liabilities from discontinued operations 88,572 (1,172,387)
---------- -----------
Net cash used in operating activities (106,653) (222,603)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment (9,785) --
Equity investment in discontinued operations -- 133,541
Purchase of investments -- (1,607)
---------- -----------
Net cash (used in) provided by investing activities (9,785) 131,934
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock -- 6,925,099
Purchase of stock (217,500) --
---------- -----------
Net cash (used in) provided by financing activities (217,500) 6,925,099
---------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (333,938) 6,834,430
CASH AND CASH EQUIVALENTS, beginning of year 497,758 211,342
---------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 163,820 $ 7,045,772
---------- -----------
---------- -----------
</TABLE>
The accompanying notes are an integral part of these
consolidated statements.
<PAGE>
CHAPMAN HOLDINGS, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The accompanying consolidated financial statements include the accounts of
Chapman Holdings, Inc. (CHI) and its wholly owned subsidiary, The Chapman
Company (collectively, the Company). All significant intercompany accounts and
transactions have been eliminated in consolidation. The accompanying
consolidated financial statements are presented on the accrual basis of
accounting in accordance with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Interim Financial Statements
The consolidated financial statements for the three months ended March 31, 1997
and 1998, are unaudited, but in the opinion of management, such financial
statements have been presented on the same basis as the audited consolidated
financial statements and include all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of the financial
position and results of operations, for the periods.
As permitted under the applicable rules and regulations of the Securities and
Exchange Commission, these financial statements do not include all disclosures
normally included with audited consolidated financial statements, and
accordingly, should be read in conjunction with the consolidated financial
statements and notes thereto as of December 31, 1996 and 1997, included in the
Company's Form 10-KSB filed. The results of operations presented in the
accompanying consolidated financial statements are not necessarily
representative of operations for an entire year and because of the nature of the
Company's operations can be materially different between periods.
2. SPIN-OFF OF OPERATIONS:
Effective February 26, 1998, concurrent with CHI's completed initial public
offering, CHI spun off two of its wholly owned subsidiaries Chapman Capital
Management, Inc. and Chapman Insurance Agency, Inc. See the audited consolidated
financial statements and notes thereto as of December 31, 1996 and 1997,
included in the Company's Form 10-KSB filed, for a discussion of this
transaction.
3. RELATED PARTY TRANSACTIONS:
In March 1998, the Company advanced the President of the Company approximately
$285,000. See the audited consolidated financial statements and notes thereto as
of December 31, 1996 and 1997, included in the Company's Form 10-KSB filed, for
discussion of other related party transactions.
<PAGE>
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Note Regarding Forward-Looking Information
Certain statements under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in
this Report 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
which 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, general
economic and business conditions in the Company's market area, fluctuations
in interest rates, changes in government regulations, competition, the
Company's ability to manage growth in a highly competitive industry, the
Company's successful implementation of its expansion plans, the effect on
share price of shares eligible for future sale and the ability of the Company
to implement its business strategy including the DEM strategy.
Forward-looking statements are intended to apply only at the time they
are made. Moreover, whether or not stated in connection with a forward-looking
statement, the Company undertakes no obligation to correct or update a
forward-looking statement should the Company later become aware that it is not
likely to be achieved. If the Company were to update or correct a
forward-looking statement, investors and others should not conclude that the
Company will make additional updates or corrections thereafter.
<PAGE>
Results of Operations
The following table reflects items in the Statements of Operations as
dollar amounts and as percentages of total revenue.
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------------
1997 1998
------------------------ ------------------------
(unaudited) (unaudited)
Percentage of Percentage of
Amounts Total Revenue Amounts Total Revenue
--------- ------------- --------- -------------
<S> <C> <C> <C> <C>
REVENUE:
Commissions $ 532,213 93.3% $ 702,475 87.2%
Underwriting and management fees 28,851 5.1 47,135 5.9
Interest and dividends 9,156 1.6 55,821 6.9
--------- ----- --------- -----
Total revenue 570,220 100.0 805,431 100.0
--------- ----- --------- -----
EXPENSE:
Compensation and benefits 278,936 48.9 347,216 43.1
Floor brokerage and clearing fees 73,927 13.0 89,022 11.1
Communications 41,822 7.3 45,312 5.6
Occupancy, rental and depreciation 88,724 15.6 92,133 11.4
Travel and business development 50,168 8.8 33,483 4.2
Professional fees 11,085 1.9 35,467 4.4
Other operating expense 69,410 12.2 69,240 8.6
--------- ----- --------- -----
Total expense 614,072 107.7 711,873 88.4
--------- ----- --------- -----
(Loss) income from continuing
operations (43,852) -7.7 93,558 11.6
Income tax (benefit) provision (18,326) -3.2 38,211 4.7
--------- ----- --------- -----
(Loss) income from continuing
operations (25,526) -4.5 55,347 6.9
Net loss from discontinued operations (3,801) -0.6 -- 0.0
--------- ----- --------- -----
Net (loss) income $(29,327) -5.1% $ 55,347 6.9%
--------- ----- --------- -----
--------- ----- --------- -----
</TABLE>
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997.
Total revenue increased by $235,211, or 41.2%, to $805,431 for the
three months ended March 31, 1998 from $570,220 for the prior comparable period.
Revenue was higher in each of the Company's three major business areas in the
three months ended March 31, 1998 than in the prior comparable period.
Commission revenue increased by $170,262, or 32.0%, to $702,475 for the
three months ended March 31, 1998 from $532,213 for the prior comparable period.
The increase was due to a 61.4% increase in commissions on institutional sales
and a 124.3% increase in commissions on retail sales as partially offset by a
53.1% decrease in commissions on fixed income sales primarily caused by market
conditions. The increase in institutional and retail sales is primarily due to
an increase in sales volume with the Company's existing clients and an increase
in the number of clients resulting from the Company's business development
activities.
Underwriting and management fees increased by $18,284, or 63.4%, to
$47,135 for the three months ended March 31, 1998 from $28,851 for the prior
comparable period primarily due to an increase in financial advisory fees from
municipalities as partially offset by a decrease in management fees.
Total expense increased by $97,801, or 15.9%, to $711,873 for the three
months ended March 31, 1998 from $614,072 for the prior comparable period. Total
expense decreased to 88.4% of total revenue for the three months ended March 31,
1998 as compared to 107.7% of total revenue for the prior comparable period.
<PAGE>
Compensation and benefits increased by $68,280, or 24.5%, to $347,216
for the three months ended March 31, 1998 from $278,936 for the prior comparable
period. As a percentage of total revenue, these expenses decreased to 43.1% for
the three months ended March 31, 1998 from 48.9% in the prior comparable period.
Compensation expense includes sales commissions paid to brokers on the sale of
securities and varies in relation to changes in commission revenue. The increase
in compensation and benefits is primarily attributable to the increase of
commissions paid to brokers due to increased sales volume and annual salary
increases.
Floor brokerage and clearing fees increased by $15,095, or 20.4%, to
$89,022 for the three months ended March 31, 1998 from $73,927 for the prior
comparable period primarily due to the increase in the number of clients and in
sales volume to existing clients.
Communication expense increased by $3,490, or 8.3%, to $45,312 for the
three months ended March 31, 1998 from $41,822 for the prior comparable period
primarily due to price increases in connection with the Company's communications
services.
Occupancy, rental and depreciation expense increased by $3,409, or
3.8%, to $92,133 for the three months ended March 31, 1998 from $88,734 for the
prior comparable period.
Travel and business development expense decreased by $16,685, or 33.3%,
to $33,483 for the three months ended March 31, 1998 from $50,168 for the prior
comparable period.
Professional fees increased by $24,382, or 220.0%, to $35,467 for the
three months ended March 31, 1998 from $11,085 for the prior comparable period
due primarily to the Company's increased use of accounting and tax advisors.
Other operating expense decreased slightly to $69,240 for the three
months ended March 31, 1998 from the prior comparable period.
Income taxes from continuing operations increased by $56,537 to a
$38,211 tax provision in the three months ended March 31, 1998 from a $18,326
tax benefit for the prior comparable period. This increase was due to the
increase in net income for the period.
Net income increased by $80,873 to $55,347 for the three months ended
March 31, 1998 from a net loss of $25,526 for the prior comparable period.
Liquidity and Capital Resources
The Company's assets are reasonably liquid with a substantial majority
consisting of cash and cash equivalents, investment securities, and receivables
from other broker-dealers and the Company's clearing agent, all of which
fluctuate depending upon the levels of customer business and trading activity.
Receivables from broker-dealers and the Company's clearing agent turnover
rapidly. Both the Company's total assets as well as the individual components as
a percentage of total assets may vary significantly from period to period
because of changes relating to customer demand, economic and market conditions,
and proprietary trading strategies. The Company's total assets as of March 31,
1998 were $8,861,861.
The Chapman Co., the Company's broker-dealer subsidiary, is subject to
the net capital rules of the NASD. As such, The Chapman Co. is subject to
certain restrictions on the use of capital and its related liquidity. The net
capital position of The Chapman Co. as of March 31, 1998 was $244,670 which was
$124,670 in excess of its minimum net capital requirement.
The Company's cash and cash equivalents were $7,045,772 as of March 31,
1998. The increase in cash and cash equivalents was primarily due to the
Company's initial public offering during the period.
Historically, the Company has financed its operations through the
private placement of equity securities and cash flow from operations. The
Company has not employed any significant leverage or debt. The Company intends
to use debt prudently in the future and may seek to arrange for lines of credit.
On February 26, 1998, the Company consummated an initial public
offering, the Offering, of its Common Stock pursuant to which the Company
received net proceeds of approximately $6,875,000. The net proceeds from the
Offering are invested in U.S. government securities, short term certificates of
deposit, money market funds and other short-term interest-bearing investments.
The Company's overall capital and funding needs are continually
reviewed to ensure that its capital base can support the estimated needs of its
business. These reviews take into account business needs as well as the
Company's regulatory capital requirements. The Company believes that its capital
structure is adequate for current operations.
<PAGE>
PART II
OTHER INFORMATION
ITEM 2--CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company's Registration Statement on Form SB-2 (File No. 333-43487)
with respect to the Offering was declared effective by the Commission on
February 23, 1998. As of March 31, 1998, the Company has applied $1 million of
the net proceeds of the Offering to working capital and general corporate
purposes. The remainder of the net proceeds have not yet been applied by the
Company and, pending such application, will be invested principally in United
States government securities, short-term certificates of deposit, money market
funds or other short-term interest-bearing investments.
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on February 23,
1998. The following directors of the Company were re-elected at the meeting:
Nathan A. Chapman, Jr., Earl U. Bravo, Sr., Lottie H. Shackelford, and Donald V.
Watkins. In addition to the election of directors, the Company's stockholders
voted at the annual meeting to ratify and approve the Company's independent
public accountants. The selection of the accounting firm, Arthur Andersen LLP,
Baltimore, Maryland, nominated by management was approved as indicated below.
The following chart indicates the number of shares outstanding on the record
date, the number of shares present at the annual meeting and the number of
shares voting in favor of the matters presented at the annual meeting.
<TABLE>
<CAPTION>
Shares Outstanding Shares Present at Shares Voting in Favor
on the Record Date the Annual Meeting of Matters Proposed
------------------ ------------------ ----------------------
<S> <C> <C> <C>
Common Stock 1,989,235 1,830,015 1,830,015
</TABLE>
ITEM 6.--EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits required by Item 601 of Regulation S-B:
Exhibit 27: Financial Data Schedule
B. Reports on Form 8-K:
None.
<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.
CHAPMAN HOLDINGS, INC.
By: /s/ NATHAN A. CHAPMAN, JR.
---------------------------------------------
Nathan A. Chapman, Jr.
President, Chairman of the Board and Director
/s/ M. LYNN BALLARD
---------------------------------------------
M. Lynn Ballard
Treasurer and Controller
(Principal Financial Officer and Principal
Accounting Officer)
Date: May 14, 1998
<PAGE>
EXHIBIT INDEX
-----------------
Exhibit No. Description of Exhibit
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 MAR-31-1997 MAR-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 MAR-31-1997 MAR-31-1998
<CASH> 251,458 0 7,085,888
<SECURITIES> 169,306 0 170,913
<RECEIVABLES> 1,123,220 0 1,023,659
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 1,801,373 0 8,844,518
<PP&E> 17,343 0 17,343
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 2,863,586 0 8,861,861
<CURRENT-LIABILITIES> 442,505 0 499,180
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 1,989 0 2,954
<OTHER-SE> 1,246,705 0 8,359,727
<TOTAL-LIABILITY-AND-EQUITY> 2,863,694 0 8,861,861
<SALES> 0 561,064 749,660
<TOTAL-REVENUES> 0 570,220 805,431
<CGS> 0 614,072 711,873
<TOTAL-COSTS> 0 614,072 711,873
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 0 (43,852) 93,558
<INCOME-TAX> 0 (18,326) 38,211
<INCOME-CONTINUING> 0 (25,526) 55,347
<DISCONTINUED> 0 (3,801) 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 0 (29,327) 55,347
<EPS-PRIMARY> 0 (0.01) 0.02
<EPS-DILUTED> 0 (0.01) 0.02
</TABLE>
