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
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-8161
DIONICS, INC.
(Exact name of Small Business Issuer as Specified in its Charter)
DELAWARE 11-2166744
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
65 RUSHMORE STREET
WESTBURY, NEW YORK 11590
(Address of Principal Executive Offices)
(516) 997-7474
(Issuer's Telephone Number, Including Area Code)
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 X No
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
Common, $.01 par value per share: 3,683,678
outstanding as of May 1, 1998
(excluding 164,544 treasury shares).
<PAGE>
PART I - FINANCIAL INFORMATION
DIONICS, INC.
Index to Financial Information
Period Ended March 31, 1998
ITEM PAGE HEREIN
Item 1 - Financial Statements:
Introductory Comments 3
Condensed Balance Sheet 4
Condensed Statement of Operations 6
Statement of Cash Flows 7
Notes to Financial Statements 8
Item 2 - Management's Discussion and
Analysis or Plan of Operation 14
<PAGE>
DIONICS, INC.
MARCH 31, 1998
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments (consisting
only of normal recurring accruals) necessary to a fair presentation of the
results of operations for the periods being reported. Additionally, it should
be noted that the accompanying condensed financial statements do not purport to
be complete disclosures in conformity with generally accepted accounting
principles.
The results of operations for the three months ended March 31, 1998
are not necessarily indicative of the results of operations for the full fiscal
year ending December 31, 1998.
These condensed statements should be read in conjunction with the
Company's financial statements for the year ended December 31, 1997.
<PAGE>
DIONICS, INC.
COMBINED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED) (UNAUDITED)
A S S E T S
CURRENT ASSETS:
Cash $ 483,000 $ 473,400
Accounts Receivable Trade
(Less Estimated Doubtful
Accounts of $10,000 in 1998
and $10,000 in 1997)- (Note 2) 143,500 192,300
Inventory - (Notes 2 and 3) 433,300 359,500
Prepaid Expenses and Other
Current Assets 20,900 25,400
TOTAL CURRENT ASSETS 1,080,700 1,050,600
PROPERTY, PLANT AND EQUIPMENT - (Note 2)
At Cost - Less Accumulated
Depreciation of $1,637,900 in 1998
and $1,636,100 in 1997 48,400 50,200
DEPOSITS AND OTHER ASSETS - (Note 4) 19,700 20,200
Total $1,148,800 $1,121,000
<PAGE>
DIONICS, INC.
COMBINED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED) (UNAUDITED)
L I A B I L I T I E S
CURRENT LIABILITIES:
Current Portion of Long-Term
Debt - (Note 5) $ 378,700 $ 26,700
Accounts Payable 66,800 54,400
Accrued Expenses 87,900 57,200
Deferred Compensation Payable -
Current - (Note 4) 125,000 50,000
Total Current Liabilities 658,400 188,300
Deferred Compensation Payable -
(Note 4) 394,000 453,000
Long-Term Debt Less Current
Maturities - (Note 5) 443,800 802,900
TOTAL LIABILITIES 1,496,200 1,444,200
CONTINGENCIES AND COMMENTS
SHAREHOLDERS' EQUITY
Common Shares - $.01 Par Value
Authorized 5,000,000 Shares
Issued 3,848,222 Shares in 1998
and 3,848,222 Shares in 1997 (Note 6) 38,400 38,400
Additional Paid-in Capital 1,522,800 1,522,800
(Deficit) (1,688,000 (1,663,800)
(126,800) (102,600)
Less: Treasury Stock at Cost
164,544 Shares in 1998 and
164,544 Shares in 1997 (220,600) (220,600)
Total Shareholders' Equity (Deficit) (347,400) (323,200)
TOTAL $1,148,800 $1,121,000
<PAGE>
DIONICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
1998 1997
(UNAUDITED) (UNAUDITED)
SALES $ 303,900 $ 426,400
COST AND EXPENSES:
Cost of Sales (Including
Research and Development
Costs) 227,900 298,000
Selling, General and
Administrative Expenses 87,300 80,000
TOTAL COSTS AND EXPENSES 315,200 378,000
NET INCOME (LOSS) FROM OPERATIONS (11,300) 48,400
OTHER INCOME 4,400 1,700
(6,900) 50,100
OTHER DEDUCTIONS:
Interest Expense 17,300 18,300
NET INCOME (LOSS) FOR THE PERIOD $ (24,200) $ 31,800
NET INCOME (LOSS) PER SHARE $ (.0066) $ .008
Average Number of Shares
Outstanding Used in Computation
of Per Share Net Income (Loss) 3,683,678 3,683,678
<PAGE>
DIONICS, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
MARCH 31, MARCH 31,
1998 1997
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (24,200) $ 31,800
ADJUSTMENT TO RECONCILE NET INCOME (LOSS) TO NET
CASH USED FOR OPERATING ACTIVITIES:
Depreciation and Amortization 1,800 3,100
Deferred Compensation and Related Interest 16,000 15,000
CHANGES IN OPERATING ASSETS AND LIABILITIES:
(Increase) Decrease in Accounts Receivable 48,800 52,900
(Increase) Decrease in Inventory (73,800) 5,000
(Increase) Decrease in Prepaid Expenses
and Other Current Assets 4,500 5,100
(Increase) Decrease in Deposits and Other Assets 500 600
Increase (Decrease) in Accounts Payable 12,400 (900)
Increase (Decrease) in Accrued Expenses 30,700 7,800
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Repayment of Debt (7,100) (7,100)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Equipment -0- -0-
NET INCREASE IN CASH 9,600 113,300
CASH - Beginning of Period 473,400 210,900
CASH - End of Period $ 483,000 $ 324,200
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - BUSINESS:
The Company designs, manufactures and sells silicon semiconductor
electronic products, as individual discrete components, as multicomponent
integrated circuits and as multicomponent hybrid circuits.
The individual discrete components are predominantly transistors, diodes and
capacitors, intended for use in miniature circuit assemblies called "hybrid
microcircuits".
Due to the rapidly changing needs of the marketplace, there are continual
shifts in popularity among the various chip components offered by the Company.
Taken as a whole, the category of discrete chip components for the hybrid
circuit industry is one of the three main classes of products offered by the
Company.
A second main class of products offered by the Company is encapsulated,
assembled, integrated circuits for use in electronic digital display functions.
The third main class of products offered by the Company is a range of hybrid
circuits that function as opto-isolated MOSFET drivers and custom Solid State
Relays.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
Assets, liabilities, revenues and expenses are recognized on the accrual basis
of accounting.
CASH AND CASH EQUIVALENTS
The Company considers money market funds to be cash equivalents.
MERCHANDISE INVENTORY
Inventory is stated at the lower of cost (which represents cost of materials
and manufacturing costs on a first-in, first-out basis) or market.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment is stated at cost less accumulated depreciation
and amortization. Expenditures for renewals and improvements that
significantly extend the useful life of assets are capitalized for all assets;
depreciation is provided over the estimated useful lives of the individual
asset, using the straight- line method. The following asset lives are in
effect:
Machine and Equipment 8 Years
Testing Equipment 8 Years
Furniture and Fixtures 10 Years
Building Improvements 10 Years
Building 25 Years
DEFERRED COMPENSATION PLAN
Future payments required under a plan of deferred compensation adopted in 1987,
as well as interest accrued thereon are being charged to operations over the
period of expected service.
BAD DEBTS
The Company maintains a constant allowance for doubtful accounts of $10,000.
NOTE 3 - INVENTORY:
Inventories are stated at the lower of cost (which represents cost of materials
and manufacturing costs on a first-in, first-out basis) or market, and are
comprised of the following:
MARCH 31, DECEMBER 31,
1998 1997
(Unaudited) (Unaudited)
Finished Goods $ 48,000 $ 39,900
Work-in-Process 233,500 193,700
Raw Materials 108,600 90,100
Manufacturing Supplies 43,200 35,800
Total $433,300 $359,500
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 4 - DEFERRED COMPENSATION PAYABLE:
In 1987 the company entered into an agreement, amended in 1997, which calls for
payments to its chief executive officer upon his reaching the age of 65,
provided that he has not voluntarily terminated his employment prior to that
event. Such agreement further provides that in the event of death or
termination of employment of the officer prior to age 65, such payments are to
commence during the month subsequent to such event. Assuming his continuous
employment until age 65, the terms of the agreement call for the executive to
receive $25,000 per month for the 12-month period from November 1, 1998 to
October 31, 1999 and $6,666.66 per month for the following 60 consecutive
months.
Other than a Life Insurance policy to cover death benefits, the Company has no
designated funds to meet these requirements. In view of its indebtedness and
need for operating capital, there can be no assurance that the company will be
able to satisfy the terms of this agreement, in full or in part. Should such
circumstances occur, the terms of the agreement may have to be renegotiated to
better match the Company's then-current financial circumstances. Although
there can be no assurance of the following, the Company believes that if such
renegotiation becomes necessary it will be able to agree on terms acceptable to
both parties. The above-mentioned Life Insurance policy had a cash surrender
value at 12/31/97 of approximately $1,700 which is included in other assets.
NOTE 5 - LOANS PAYABLE - APPLE BANK:
Effective January 31, 1994, the Company and Apple Bank for Savings (the
"Bank") entered into a restructuring Agreement, whereby the Bank agreed
to forgive a portion of existing indebtedness of the Company and to
restructure the balance. In October 1988, the Company had obtained from
the Bank a Commercial Equity Line in the original principal amount of
$1 million (the "Original Mortgage") and in 1990 the Company had obtained
certain other asset-based loans from the bank in the principal amount
of $283,850 (the "1990 Loans").
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 5 - LOANS PAYABLE - APPLE BANK: (Continued)
PURSUANT TO THE RESTRUCTURING AGREEMENT:
A. The bank has forgiven $376,146.59 of accrued and unpaid interest
stemming from the Original Mortgage and the 1990 Loans.
B. The 1990 Loans have been replaced by a new term loan in the principal
amount of $283,850, ("Term Loan A") structured over two five-year periods.
During the first five-year period, the Company will pay interest only at an
annual rate of 6.0 percent. Of that amount, only one-third (2.0 percent) will
be paid monthly, with the remainder accruing and becoming part of unpaid
principal at the end of that period. During the second five-year period, the
balance due will be paid over 60 equal monthly installments, plus interest at
Prime plus two percent.
C. The remaining balance of $750,000 outstanding on the Original Mortgage Loan
has been replaced by a new $415,000 Mortgage Loan plus two additional Term
Loans of $167,500 each. These are treated as follows:
The new $415,00 Mortgage Loan ("Mortgage Loan B") has a five-year term and
bears interest at of 7.5 percent. For the first two years of Mortgage Loan B,
the Company is obligated to pay interest only, on a monthly basis. Thereafter,
monthly payments will include interest plus the amount of
$1,921.30, which began in April 1996, towards reduction of debt. At the end of
the five-year period, the then-remaining principal ($347,754.50) will be due.
The first new Term Loan ("Term Loan C") stemming from the Original
Mortgage has a face amount of $167,500 and carries the same interest rate and
payment terms over two five-year periods as the new $283,850 Term Loan A
described in Paragraph B above.
The second new Term Loan ("Term Loan D") stemming from the Original
Mortgage also has a face amount of $167,500, but carries an annual
interest rate of 4.0 percent, none of which is payable during the
initial five-year period. This interest will accrue and
will be added to the principal at the end of the first five-year period.
The new total balance due will be repaid over the second
five-year period with 60 equal monthly installments plus interest
of Prime plus two percent.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 5 - LOANS PAYABLE - APPLE BANK - (Continued)
D. Term Loans A and C also carry convertibility rights under which the Bank
may, at its sole discretion, exchange debt for Common Stock in the Company at
the price of (I) $.75 per share until May 31, 1995, (ii) $1.00 per share from
June 1, 1995 until January 31, 1997, and (iii) $1.25 per share from February 1,
1997 until expiration, provided, however, that the aggregate number of shares
that the Bank may acquire will not exceed 15 percent of the number of then
outstanding shares of the Company's Common Stock, subject to certain anti-
dilution rights. These convertibility rights expire upon the payment-in-full
of the balance due on Mortgage Loan B, due to mature on the Interim Maturity
Date which will occur in March 1999.
E. Having met, in 1994 and 1995, certain particular financial performance
standards as called for in the January 31, 1994 Debt Restructuring Agreement,
the Company has qualified in full for the Forgiveness of specific elements of
its debt. While according to the terms of the Agreement, the actual
forgiveness is due to be formally granted on "the interim Maturity Date" (which
will occur in March 1999), the Company has, in the interests of more accurately
describing its over-all debt situation, decided to adopt those changes in its
current and future reports. The forgiveness will cover all of the principal
and accrued interest on Term Loan D and all of the accrued interest on both
Term Loans A and C, as more fully described in the above-referenced Debt
Restructuring Agreement.
All the Company's Assets are pledged to the foregoing loans.
In September 1994, the Company was advised that the foregoing loans were
purchased from the Bank by D.A.N. Joint Venture, a Limited Partnership, an
affiliate of the Cadle Company.
NOTE 6 - STOCK OPTION PLAN
In September 1997, the Board of Directors of the Company adopted the 1997
Incentive Stock Option Plan (the "1997 Plan") for employees of the Company to
purchase up to 250,000 shares of common Stock of the Company. Options granted
under the 1997 plan are "incentive stock options" as defined in Section 422 of
the Internal Revenue Code. Any stock options granted under the 1997 Plan shall
be granted at no less than 100% of the fair market value of the Common Stock of
the Company at the time of the grant. As of December 31, 1997, options to
acquire 120,000 shares of Common Stock have been granted under the 1997 Plan.
All of such options were granted on September 11, 1997 and have an exercise
price of $.38 per share. As of December 31, 1997, 130,000 options were
available for future grant. The 1997 Plan is subject to obtaining stockholder
approval within twelve months of the adoption of the 1997 Plan. If is not so
approved by the stockholders of the Company, any options granted under the 1997
Plan will be rescinded and void. The plan has not been approved at April 30,
1998.
<PAGE>
DIONICS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 7 - INCOME TAXES:
As of December 31, 1997 the Company had a federal operating loss carry forward
of $865,600. This net operating loss originated in 1989 through 1992 and may
be carried forward and expires as follows:
YEAR OF ORIGIN AMOUNT CARRY FORWARD
EXPIRES IN
1990 $566,800 2005
1991 65,600 2006
1992 233,200 2007
$865,600
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
A. LIQUIDITY AND CAPITAL RESOURCES
After many years of gradually reducing losses, the Company finally
succeeded in crossing over into gradually increasing profitability in 1996 and
1997. During the First Quarter of 1998, however, the Company encountered
several conditions that resulted in a quarterly loss. First, there was the
absence of previously available "opportunity" business that really plays no
role in the Company's long-term plans. Next, the Company also failed to
increase its shipments against a rising backlog of orders for what are core-
technology products. This failure, in the opinion of Management, demonstrated a
need to reduce middle-management's concentration on defensive survival
strategies and to increase efforts needed for aggressive growth. Re-assignment
of middle-management personnel has already shown marked improvement in getting
product shipped as opposed to it being stalled in an increasing Work-in-Process
inventory. Management expects the Second Quarter to show a significant rebound
in Sales volume, as the Company recovers from a short bout of what it considers
temporary "growing pains".
With the restructuring of its Bank debt in early 1994, the Company
achieved a significant easing of its debt obligations. That new Agreement,
however, called for a large "balloon" payment on its Mortgage Note and the
commencement of payments on two other Notes early in 1999. The Company has
already accumulated the required funds for that balloon payment, but the fact
that it is due within twelve-months of this report means that, for the first
time, such amount must be included in Current Liabilities. Also included in
Current Liabilities for the first time are several payments under the Company's
Deferred Compensation Agreement with its Chief Executive Officer. The combined
effects of the above two debt obligations increases Current Liabilities to
$658,400 from the $188,300 which showed at December 31, 1997. While the
Company's present cash position is enough to fund the Bank debt payments due in
early 1999, the Deferred Compensation Agreement may not also be covered. In
such case, the terms of the agreement may have to be renegotiated to better
match the then current financial conditions of the Company. In view of both
obligations, the Company's ratio of Current Assets to Current Liabilities has
dropped to 1.64:1. If Deferred Compensation were entirely removed from the
calculation, the Current Ratio would drop to only 2.02:1, although no assurance
can be given that such will be the result of any possible renegotiation.
Management has continued its search for additional Working Capital to
provide further growth momentum for the Company. Besides some concern for the
debt issues described above, there is the constantly growing backlog of new
orders that demands addressing. Contacts with potential lenders or investors
are always in some state of motion, but no assurance can be given of any
positive outcome. For the immediate future, the Company is well able to support
its ongoing operations, although Working Capital has now dropped to $422,300.
The decrease from $862,300 at December 31, 1997 came as a result of the large
increase in Current Liabilities described earlier.
B. RESULTS OF OPERATIONS
Sales in the First Quarter of 1998 dropped 29 percent from the same period
last year, with $303,900 in the current period as compared to $426,400 in the
First Quarter of 1997. None of the decrease occurred in the Company's core-
technology products based on micro-photovoltaics. The decrease was felt
entirely in non-strategic products for "opportunity" business that were
available in earlier periods but were simply absent in the current period. It
was also felt that a more aggressive middle-management posture was needed to
deal more effectively with the Company's mounting backlog for photovoltaic (PV)
Solid State Relays and PV MOSFET-drivers. One very bright spot has been the
growth in total backlog from $622,400 at December 31, 1997 to $1.25 million at
March 31, 1998. As a result of some changes in middle-management personnel,
the Second Quarter is already off to a strong rebound.
Inability to ship increasing amounts of the growing backlog dominated the
First Quarter, resulting in a large increase in Work-in-Process inventory. The
Gross Profit margin dropped to 25 percent as compared to 30.1 percent in the
First Quarter of 1997, due entirely to the reduced shipping level.
Selling, General and Administrative costs changed very little from period
to period, with $87,300 in the First Quarter of 1998 and $80,000 in the same
period last year. As a percentage of Sales, however, S,G & A in the current
period was up to 28.7 percent, as compared to 18.8 percent in the same period
last year.
The Company showed a Net Loss from Operations of $11,300 in the current
period, as compared to a Net Profit from Operations of $48,400 in the First
Quarter of 1997. The Company also showed a Net Loss in the First Quarter of
1998 of $24,200 as compared to a Net Profit of $31,800 in the First Quarter of
1997. These losses in the current period all stemmed from reduced shipments and
increased inventory, with remedies now in place that should reverse matters in
the Second Quarter and beyond.
The Loss shown for the First Quarter of 1998 is the first interruption of
profitable periods in recent times. As explained earlier, it is considered by
Management to be only a temporary effect, probably already remedied by certain
reassignments of production responsibilities. Therefore, addressing the bigger,
longer-term picture, the Company has in fact made great strides in dealing with
its debt situation as well as the need for currently profitable operations. The
debt picture has now entered a new phase in which, by the end of the next
twelve months, significant repayment obligations come to the surface. The
Company has already put in reserves enough cash to make the required "balloon"
payment on its new real estate Mortgage Note when that becomes due.
Nonetheless, the Company is still searching for sources of funding to permit it
to refinance its debt to more favorable terms. Even if debt-refinancing does
not become possible, the Company expects to rapidly return to profitability in
the Second Quarter and to continue to support its ongoing operations from
internally generated cash flow.
Beyond its debt situation, the Company is currently enjoying a significant
increase in new-order backlog for its core-technology products. Still further
increases in backlog are anticipated in the not-too-distant future, with the
result that there is developing an ever-increasing positive background
concerning projected future performance. A particularly encouraging element is
the growing usage of the Company's patented photovoltaic MOSFET-drivers in a
rapidly growing segment of the medical-electronics field. Looking across the
temporary First Quarter "valley", there is much reason for optimism that
Management's goals of continued increases in sales and profits will be met. As
always, and as demonstrated unfortunately in the just completed period, risks
of failure persist. Nonetheless, the Company is well back from the brink it
once fought desperately and successfully to avoid.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY-HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. There are no exhibits applicable to this Form 10-
QSB.
(b) Reports on Form 8-K. Listed below are Current Reports on Form
8-K filed by the Registrant during the fiscal quarter ended
March 31, 1998:
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
DIONICS, INC.
(Registrant)
Dated: May 11, 1998 By: /s/Bernard Kravitz
Bernard Kravitz,
President
Dated: May 11, 1998 By: /s/Bernard Kravitz
Bernard Kravitz,
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM DIONICS, INC.'S QUARTERLY REPORT FOR THE QUARTER ENDED MARCH 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 483,000
<SECURITIES> 0
<RECEIVABLES> 143,500
<ALLOWANCES> 0
<INVENTORY> 433,300
<CURRENT-ASSETS> 1,080,700
<PP&E> 1,686,300
<DEPRECIATION> 1,637,900
<TOTAL-ASSETS> 1,148,800
<CURRENT-LIABILITIES> 658,400
<BONDS> 837,800
<COMMON> 38,400
0
0
<OTHER-SE> 1,522,800
<TOTAL-LIABILITY-AND-EQUITY> 1,148,800
<SALES> 303,900
<TOTAL-REVENUES> 303,900
<CGS> 227,900
<TOTAL-COSTS> 315,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,300
<INCOME-PRETAX> (24,200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24,200)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,200)
<EPS-PRIMARY> (.007)
<EPS-DILUTED> (.007)
</TABLE>
