SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended March 31, 2000 Commission File Number 0-25025
-------------- -------
SEDONA WORLDWIDE INCORPORATED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
ARIZONA 86-0718104
- ------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
3840 North 16th Street, Phoenix, Arizona 85016
----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code 602-263-9600
----------------------------------------------------
Former name, former address, and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.
Class Outstanding at March 31, 2000
- ------------------------------- -----------------------------
Common Stock, without par value 4,200,000 shares
<PAGE>
PART I
ITEM I. FINANCIAL STATEMENTS
SEDONA WORLDWIDE INCORPORATED
BALANCE SHEET
December 31, March 31,
1999 2000
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 9,564 $ 29,977
Accounts receivable 12,988 33,077
Inventories 157,546 144,268
Prepaid expenses and other current assets 30,077 29,151
----------- -----------
Total current assets 210,175 236,473
Property and equipment, net 44,077 34,452
----------- -----------
TOTAL ASSETS $ 254,252 $ 270,925
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES & STOCKHOLDERS' EQUITY:
Accounts payable $ 4,523 $ 19,227
Accrued expenses 24,309 17,946
----------- -----------
Total current liabilities 28,832 37,173
----------- -----------
Common stock, no par value; 50,000,000
shares authorized; 4,200,000 shares
issued and outstanding 1,000,000 1,000,000
Contributed capital 2,545,730 2,545,730
Deficit (3,320,310) (3,311,978)
----------- -----------
Total stockholders' equity 225,420 233,752
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 254,252 $ 270,925
=========== ===========
See notes to consolidated financial statements
2
<PAGE>
SEDONA WORLDWIDE INCORPORATED
STATEMENT OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
----------------------------
1999 2000
----------- -----------
Net Sales:
Customers $ 34,750 $ 113,077
Affiliates 69,182 --
----------- -----------
Total net sales 103,932 113,077
----------- -----------
Cost of sales: 65,349 49,621
----------- -----------
Gross profit 38,583 63,456
Selling, general & administrative expense: 80,129 55,124
----------- -----------
Income (loss) from operations (41,546) 8,332
Interest expense 547 --
----------- -----------
Net Income (Loss) (42,093) 8,332
=========== ===========
Weighted average shares of common
stock outstanding 4,200,000 4,200,000
Basic income (loss) per share $ (0.01) $ 0.00
=========== ===========
Diluted income (loss) per share $ (0.01) $ 0.00
=========== ===========
See notes to consolidated financial statements
3
<PAGE>
SEDONA WORLDWIDE INCORPORATED
STATEMENT OF CASH FLOWS
(UNAUDITED)
Three months ended March 31,
----------------------------
1999 2000
-------- --------
Cash flows from OPERATING activities:
Net income (loss) $(42,093) $ 8,332
Depreciation and amortization 9,872 9,625
(Increase) decrease in accounts receivable 364 (20,089)
Decrease in inventory 33,300 13,278
Decrease (increase) in prepaid and other (8,851) 926
Increase (decrease) in accounts payable (6,653) 14,704
Decrease in accrued expense (3,448) (6,363)
-------- --------
Net cash generated by (used in)
operating activities (17,509) 20,413
-------- --------
Cash flows from INVESTING activities:
Purchase of property and equipment (856) --
-------- --------
Cash flows from FINANCING activities:
Principal payments on debt and leases (7,013) --
Advances from parent (28,120) --
-------- --------
Net cash provided by (used in)
financing activities (35,133) --
-------- --------
INCREASE (decrease) in cash (53,498) 20,413
Cash at beginning of period 68,406 9,564
-------- --------
Cash at end of period $ 14,908 $ 29,977
======== ========
See notes to consolidated financial statements
4
<PAGE>
SEDONA WORLDWIDE INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION
Sedona Worldwide Incorporated, an Arizona corporation ("SWI" or the
"Company"), was incorporated in 1992 under the name Red Rock Collection
Incorporated. In 1997, the Company changed its name to Sedona Worldwide
Incorporated. The Company was a majority-owned subsidiary of ILX Resorts
Incorporated, an Arizona corporation ("ILX") until December 31, 1999, when ILX
effected a distribution of all of the shares of the Company's Common Stock which
ILX held to the ILX shareholders of record as of December 21, 1999, on a pro
rata basis (the "Spin-Off"). As a result of the Spin-Off, ILX's shareholders
became owners of, in the aggregate, 80% of the Company's outstanding capital
stock. ILX registered the Company's Common Stock pursuant to a Registration
Statement on Form 10-SB on a voluntary basis, in order to effect the Spin-Off,
without the need to register the distribution of the Company's Common Stock to
ILX's shareholders under the Securities Act of 1933, as amended (the "Securities
Act"). In January 2000, ILX distributed an Information Statement, which contains
substantially the same kind of information as is typically found in a Proxy
Statement, to ILX shareholders. The Information Statement disclosed certain
material information about the Company and the shares of Common Stock to be
distributed to ILX shareholders in the Spin-Off.
The Company is principally engaged in the development, testing, marketing,
and distribution of its own proprietary "Sedona Spa" branded lines of face, hair
and body care products and apparels containing ingredients or materials
indigenous to, and embodying the appeal of, the Southwestern region of the U.S.
and of Sedona, Arizona in particular. In addition, the Company has established a
marketing alliance with Robert Shields, founder of Robert Shields Design, a
jewelry and art design company based in Sedona, Arizona, whereby the Company
will be able to offer a line of Southwestern-style jewelry and artwork similar
to Mr. Shield's existing line of products. In addition, the Company has
developed a line of apparel under the brand name "Red Rock Gear." No significant
sales of apparel or jewelry have occurred to date.
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 and Rule 10-01 of
Registration S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments and
reclassifications considered necessary for a fair and comparable presentation
have been included and are of a normal recurring nature. 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 ending December 31, 2000. The
accompanying financial statements should be read in conjunction with the
Company's most recent audited financial statements.
INVENTORIES
Inventories are recorded at the lower of cost (first-in, first-out) or
market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets, which
range from three to five years. Property and equipment under capitalized leases
are stated at the lesser of fair value or the present value of future minimum
lease payments at the date placed in service, and amortized on the straight-line
method over the term of the lease.
INCOME TAXES
Income taxes are accounted for using Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting For Income Taxes." Under SFAS No. 109,
deferred tax assets and liabilities are recognized for the estimated future tax
effects attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis.
5
<PAGE>
SEDONA WORLDWIDE INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
REVENUE RECOGNITION
The Company recognizes sales of products when the products are shipped.
Revenue from consigned goods is recognized when sold and is not considered
significant to the operations of the Company.
ACCOUNTING MATTERS
In February 1997, the Financial Accounting Standards Board issued SFAS No.
129, "Disclosure of Information about Capital Structure" ("SFAS 129"), which was
effective for financial statements for periods ending after December 15, 1997
and establishes standards for disclosing information about an entity's capital
structure. SFAS 129 was adopted by the Company in 1997. There were no
significant effects on the Company's disclosures about its capital structure, as
that term is defined in SFAS 129, in the three months ended March 31, 1999 or
2000.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS 130"), which was effective for financial
statements for periods beginning after December 15, 1997 and establishes
standards for reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-purpose
financial statements. The Company adopted SFAS 130 in 1998. There were no items
of other comprehensive income, as that term is defined in SFAS 130, in the three
months ended March 31, 1999 or 2000.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information" ("SFAS
131"), which is effective for fiscal years beginning after December 15, 1997 and
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. The Company has a single segment in the personal care products
industry. Revenue from the Company's only major customer is reported on the
Statement of Operations under Affiliates in 1999 and in Customers in 2000
following the Spin-Off.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"),
which requires that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value.
The standard also provides specific guidance for accounting for derivatives
designated as hedging instruments. In June 1999, the Financial Accounting
Standards Board issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of Statement No. 133" ("SFAS
No. 137"), which delayed the effective date of SFAS No. 133 for the company
until 2001. The Company is currently evaluating what impact this standard will
have on its financial statements.
NOTE 2. BUSINESS CONDITION
As shown in the accompanying financial statements, the Company achieved net
income of $8,332 during the three months ended March 31, 2000. As of that date,
the Company's current assets exceeded its current liabilities by $199,300 and
its total assets exceeded its total liabilities by $233,752 due to ILX
contributing in excess of $2,545,000 of intercompany debt to capital at December
31, 1999. However, the Company incurred net losses of $376,629, $317,084 and
$192,340 in 1997, 1998 and 1999, respectively, and has an accumulated deficit of
$3,311,978 at March 31, 2000. Those factors create an uncertainty about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.
6
<PAGE>
SEDONA WORLDWIDE INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company's continuation as a going concern is dependent upon its ability
to generate sufficient cash flow to meet its obligations on a timely basis, to
obtain financing as may be required, and ultimately to attain profitable
operations. At the time of the Spin-Off, the Company was indebted to ILX in an
amount in excess of $2,545,000, which ILX contributed to capital in conjunction
with the Spin-Off. The Company has incurred net losses since its inception. In
order to achieve profitability it will be necessary for the Company to
substantially increase its revenue. While there are presently some opportunities
in progress that may generate sufficient additional sales to generate profits,
there can be no assurance that such revenues will be generated from current
sources. The Company may pursue debt or equity financing that will enable it to
invest in marketing and distribution geared toward generating greater revenues.
However, there can be no assurance that such financing will be available or that
the marketing and distribution efforts will be successful in generating
sufficient sales to achieve profitability. ILX has agreed to provide up to
$200,000 of additional financing following completion of the Spin-Off through
November 30, 2000. All amounts borrowed by the Company will bear interest equal
to the prime rate plus 3% per annum, and is payable monthly. The entire unpaid
principal will be due on December 31, 2000. At March 31, 2000, there had been no
funds advanced under this agreement.
7
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS
OF OPERATIONS INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS
FORM 10-QSB, THE WORDS "ESTIMATE," "PROJECTION," "INTEND," "ANTICIPATES" AND
SIMILAR TERMS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS THAT RELATE TO
THE COMPANY'S FUTURE PERFORMANCE. SUCH STATEMENTS ARE SUBJECT TO SUBSTANTIAL
UNCERTAINTY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE
FORWARD-LOOKING STATEMENTS SET FORTH BELOW. THE COMPANY UNDERTAKES NO OBLIGATION
TO PUBLICLY UPDATE OR REVISE ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED
HEREIN.
OVERVIEW
Sedona Worldwide Incorporated was formed in 1992 to develop, test, market
and distribute its own proprietary "Sedona Spa" branded lines of face, hair and
body care products and apparels containing ingredients or materials indigenous
to, and embodying the appeal of, the Southwestern region of the United States
and of Sedona, Arizona in particular. To date, the Company has generated revenue
primarily through the sale of its face, hair and body care products to ILX. ILX
distributes the Company's products as in-room amenities at its resorts and
hotels, as premiums (incentives) to its customers for attending vacation
ownership sales presentations, and for retail sales at its resort gift shops,
and at the Sedona Spa at Los Abrigados Resort & Spa. The Company also generates
revenue from direct mail sales to consumers (many of whom were introduced to the
products as in-room amenities or premiums) and from limited retail distribution
in specialty shops.
RESULTS OF OPERATIONS
The following table sets forth certain operating information for the
Company:
Three Months Ended March 31,
----------------------------
1999 2000
----- -----
Net sales:
Sales to ILX (1) 66.6% 55.2%
Sales to customers other than ILX 33.4% 32.9%
Sales previously deferred (2) 0.0% 11.9%
----- -----
Total sales 100.0% 100.0%
===== =====
As a percentage of net sales:
Cost of sales 62.9% 43.9%
Contribution margin 37.1% 56.1%
Sales, general and administrative expense 77.1% 48.7%
Net income (loss) (40.5)% 7.4%
- ----------
(1) Sales made to ILX are made at lower prices (generally cost plus a small
mark up) than sales made to customers other than ILX.
(2) Sales previously deferred refers to a one-time recognition of revenue
related to unredeemed product certificates.
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 TO THE THREE MONTHS ENDED
MARCH 31, 2000
Net sales increased 8.8% or $9,145 in the quarter ended March 31, 2000 to
$113,077 from $103,932 for the same period in 1999. The increase is due to a
one-time realization of previously deferred revenue related to unredeemed
product certificates. The Company's major customer, ILX, accounted for $62,419
or 55.2% of total net sales for the quarter ended March 31, 2000 as compared to
$69,182 or 66.6% of total net sales for the same period in the prior year. Cost
of sales as a percentage of sales for the three months ended March 31, 2000 of
43.9% is lower than the same period in 1999 of 62.9% because of a lower
percentage of sales to ILX resorts, which have a lower profit margin, the
one-time recognition of previously deferred revenue, as well as reduced product
costs as a result of discounts achieved through higher volume purchasing.
Sales, general and administrative expenses decreased 31.2% or $25,005 in
the first quarter of 2000 to $55,124, due to decreased overhead expenses related
to the Spin-Off.
8
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Interest expense decreased to $0 for the three months ended March 31, 2000
from $547 in the same period in 1999, reflecting the fulfillment of capital
lease obligations.
There is no income tax benefit recorded in 1999 or 2000. The Company has
recorded a valuation allowance equal to its deferred tax asset at March 31,
2000. Under SFAS No. 109, deferred tax assets and liabilities are recognized for
the estimated future tax effects attributable to differences between the amounts
of the Company's existing assets and liabilities and their respective tax basis.
Because the Company has not yet generated taxable income, and therefore
sufficient evidence does not exist that differences in financial and taxable
income and net operating loss carryforwards will be utilized to reduce future
income taxes, no income tax benefit has been recorded for the three-month period
ended March 31, 2000.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES OF CASH
The Company generates cash primarily from the sale of its own proprietary
"Sedona Spa" branded lines of face, hair and body care products and apparels
containing ingredients or materials indigenous to, and embodying the appeal of,
the Southwestern region of the United States and of Sedona, Arizona in
particular. During the three-month period ended March 31, 1999, cash used in
operations was $17,509. During the three-month period ended March 31, 2000, cash
generated by operations was equal to $20,413. Historically the Company's cash
flows from product sales have not been sufficient to fund its operations, and
shortfalls have been funded by ILX. ILX advanced the Company $28,120 in the
three months ended March 31, 1999; no funds were advanced in the three months
ended March 31, 2000. ILX has funded the Company's cash shortfalls since
inception. At the time of the Spin-Off, the Company was indebted to ILX in an
amount in excess of $2,545,000, which ILX contributed to capital in conjunction
with the Spin-Off. ILX has agreed to provide up to $200,000 of additional
financing following completion of the Spin-Off through November 30, 2000. All
amounts borrowed by the Company will bear interest equal to the prime rate plus
3% per annum, with interest payable monthly. The entire unpaid principal will be
due on December 31, 2000. Without such a commitment, or other sources of working
capital financing which at present do not exist, the Company's current cash
flows will be insufficient to meet its liquidity, operating and capital
requirements. The Company currently has no credit facility with a bank or other
financial institution. The Company will attempt to obtain a credit facility to
address its cash flow needs; however, there can be no assurance that any such
financing will be available if needed, or, if available will be on terms
acceptable to the Company.
The Company anticipates that its expenses will increase in the future as it
attempts to expand its business by acquiring new products and increasing sales
and marketing efforts and other operations. The Company expects to continue to
incur losses until such time, if ever, as it is able to sell a sufficient volume
of products at prices that provide adequate gross profit to cover operating
costs. The Company's working capital requirements will depend upon numerous
factors, including payment cycles for its shipped products, credit arrangements
with suppliers, the scale-up of its sales and marketing resources, acquisition
of new products and the terms upon which such products are acquired, competitive
factors, and marketing activities. There can be no assurance when, if ever, the
Company will be able to generate sufficient revenues from its operations to
offset its expenses or to secure additional capital commitments. If the Company
is unable to generate more cash flows than it does currently, it will be
insolvent and may have to discontinue its business operations.
The Company has historically filed its income tax returns as a member of
the ILX consolidated income tax return. There is no formal income tax sharing
agreement to allocate income taxes among the members of the group and,
historically, the Company has not recorded an income tax benefit for losses it
has incurred that were utilized or may be utilized by ILX.
As part of the consolidated financial statements of its former parent, ILX,
the Company recorded a valuation allowance equal to its deferred tax asset at
December 31, 1998. At December 31, 1999, as a result of the Spin-Off, the
Company recorded no deferred tax asset nor a corresponding valuation allowance
because all tax benefits created by the Company's net operating losses were
9
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
retained by ILX. This treatment results in no income tax benefit being recorded
at either March 31, 1999 or at March 31, 2000.
USES OF CASH
Investing activities typically reflect a net use of cash for equipment
purchases. Net cash used in investing activities in the three months ended March
31, 1999 was $857. There were no purchases of property and equipment during the
quarter ended March 31, 2000.
CREDIT FACILITIES AND CAPITAL
The Company has never accessed commercial financing and to date, all of its
working capital needs have been financed by ILX. However, following the
Spin-Off, ILX does not intend to fund the Company's future cash shortfalls,
except as follows: In October 1999, ILX agreed to provide up to $200,000 of
working capital financing to the Company through November 30, 2000. All amounts
borrowed by the Company under this agreement will bear interest equal to the
prime rate plus 3% per annum, with interest payable monthly, and the entire
unpaid principal amount due on December 31, 2000. As a result, the Company will
need to secure alternative financing sources if it continues to operate at a
loss or, even if profitable, it pursues a growth strategy. There can be no
assurance that such resources will be available to the Company when needed and
on favorable terms. In addition, any commercial financing obtained is likely to
impose certain financial and other restrictive covenants upon the Company and
result in increased interest expense. Although the Company anticipates the need
for additional financing, it does not presently have any plans to engage in an
equity or debt financing transaction.
SEASONALITY
Presently the Company's revenues are only minimally seasonal, with slightly
increased sales during the second and third quarters and December, reflecting
seasonality in resort guests of its major customer, ILX. If the Company is able
to expand its customer base and marketing and distribution methods, it may
experience different seasonality dynamics that may cause operating results to
fluctuate.
CONCENTRATION
The substantial majority of the Company's revenues to date have been
generated from ILX. There are no long-term commitments to purchase by ILX and,
in the event ILX ceased to be a customer of the Company, revenues would be
significantly impacted. If ILX remains a customer, revenues are expected to
increase as ILX adds more resorts (which utilize in-room amenities) and sales
offices (which offer premiums to touring guests), although there can be no
assurances in this regard.
INFLATION
Inflation and changing prices have not had a material impact on the
Company's revenues, income or loss from operations or net income or loss for the
three months ended March 31, 1999 or 2000.
10
<PAGE>
PART II
ITEM I. LEGAL PROCEEDINGS
The Company is not currently the subject of any pending or, to its
knowledge, threatened legal claims.
ITEM II. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM III. DEFAULTS UPON SENIOR SECURITIES
None
ITEM IV. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM V. OTHER INFORMATION
None
ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K
(i) Exhibits
Exhibit No. Description
----------- -----------
27 Financial Data Schedule (filed herewith)
(ii) Reports on Form 8-K
None
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused its quarterly report on Form 10-Q to be
signed on its behalf by the undersigned thereunto duly authorized.
SEDONA WORLDWIDE INCORPORATED
(Registrant)
/s/ Patrick J. McGroder III
---------------------------------
Patrick J. McGroder III
Chairman of the Board
/s/ Mia A. Martori
---------------------------------
Mia A. Martori
Director, President and Treasurer
/s/ Margaret M. Eardley
---------------------------------
Margaret M. Eardley
Chief Financial Officer of
ILX Resorts Incorporated
(acting principal financial
and accounting officer)
Date: As of May 11, 2000
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS FIRST QUARTER 2000 BALANCE SHEET AND STATEMENT OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 29,977
<SECURITIES> 0
<RECEIVABLES> 33,077
<ALLOWANCES> 0
<INVENTORY> 144,268
<CURRENT-ASSETS> 236,473
<PP&E> 326,064
<DEPRECIATION> 291,612
<TOTAL-ASSETS> 270,925
<CURRENT-LIABILITIES> 37,173
<BONDS> 0
0
0
<COMMON> 1,000,000
<OTHER-SE> (766,248)
<TOTAL-LIABILITY-AND-EQUITY> 270,925
<SALES> 113,077
<TOTAL-REVENUES> 113,077
<CGS> 49,621
<TOTAL-COSTS> 55,124
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,332
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,332
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,332
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
