<PAGE>
UNITED STATES 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 QUARTER ENDED DECEMBER 31, 1999
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO _____ .
Commission file number 0-10560.
CTI GROUP (HOLDINGS) INC.
(Exact name of Small Business Issuer in its charter)
DELAWARE 51-0308583
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification Number)
2550 Eisenhower Avenue, Norristown, PA 19403
-------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (610) 666-1700
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 __ .
The number of shares of common stock par value $.01, outstanding as of January
21, 2000 was 7,446,505 .
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
---------- ----------
ASSETS
(Unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 264,813 $ 776,146
Trade, accounts receivable less allowance
for doubtful accounts of $90,060 and
$145,077 at December 31, 1999 and
March 31, 1999, respectively 1,073,912 626,631
Inventories 16,183 22,458
Prepaid expenses 64,589 93,514
---------- ----------
Total current assets 1,419,497 1,518,749
Furniture, fixtures, equipment and leasehold
improvements at cost, less accumulated
depreciation and amortization of $363,845
and $305,250 at December 31, 1999 and
March 31, 1999, respectively 169,298 168,327
Computer software, net of accumulated
amortization of $2,630,270 and $2,283,518 at
December 31, 1999 and March 31, 1999,
respectively 510,872 840,682
Excess of cost over net assets of acquired business, net of accumulated
amortization of $14,487 and $11,112 at December 31, 1999 and
March 31, 1999, respectively 30,114 33,453
Other assets 21,862 21,862
---------- ----------
$2,151,643 $2,583,073
========== ==========
</TABLE>
2
<PAGE>
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
Current liabilities:
<S> <C> <C>
Debt $ 75,015 $ 218,424
Accounts payable 273,547 492,842
Other accrued expenses 1,036,600 1,177,893
Deferred revenue 567,412 999,518
----------- -----------
Total current liabilities 1,952,574 2,888,677
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01; 10,000,000 shares
authorized; 7,410,619 issued at December 31, 1999
and 7,041,349 shares issued at March 31, 1999 74,106 70,417
Capital in excess of par value 8,267,656 8,062,507
Accumulated deficit (7,780,700) (8,085,684)
Other comprehensive income - Foreign
currency translation 44,407 53,556
Less - Treasury stock, 140,250 shares at
June 30, 1999 and March 31, 1999, at cost (406,400) (406,400)
----------- -----------
Total stockholders' equity 199,069 (305,604)
----------- -----------
$ 2,151,643 $ 2,583,073
=========== ===========
</TABLE>
3
<PAGE>
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
---------- ---------
1999 1998
----------- ----------
<S> <C> <C>
Net sales $ 5,586,800 $ 5,133,040
Costs and expenses:
Cost of sales (exclusive of depreciation and
amortization) 3,029,873 2,725,320
Selling, general and administrative expenses 1,840,690 2,440,479
Depreciation and amortization 408,723 668,550
----------- -----------
$ 5,279,286 $ 5,834,349
----------- -----------
Income (loss) from operations 307,514 (701,309)
Other expenses (income)
Interest expense net of interest income 2,530 114,731
----------- -----------
Net income (loss) $ 304,984 $ (816,040)
=========== ===========
Other Comprehensive Income (loss)
Foreign currency translation adjustment (9,149) 33,660
----------- -----------
Comprehensive income (loss) $ 295,835 $ (782,380)
=========== ===========
Basic and Diluted Net income (loss) per common share $ 0.04 $ (0.11)
=========== ===========
Basic weighted average common shares outstanding 6,996,768 6,898,229
=========== ===========
Diluted weighted average common shares outstanding 7,296,839 6,898,229
=========== ===========
</TABLE>
4
<PAGE>
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net sales $ 1,621,079 $ 1,677,050
Costs and expenses:
Cost of sales (exclusive of depreciation and
amortization) 1,051,825 892,760
Selling, general and administrative expenses 606,318 694,539
Depreciation and amortization 131,168 218,170
----------- -----------
$ 1,789,311 $ 1,805,469
----------- -----------
Income (loss) from operations (168,232) (128,419)
Other expenses (income)
Interest expense net of interest income (327) 49,171
----------- -----------
Net income (loss) $ (167,905) $ (177,590)
=========== ===========
Other Comprehensive Income (loss)
Foreign currency translation adjustment 6,060 55,949
----------- -----------
Comprehensive income (loss) $ (161,845) $ (121,641)
=========== ===========
Basic and Diluted Net income (loss) per common share $ (0.02) $ (0.02)
=========== ===========
Basic weighted average common shares outstanding 7,142,036 6,901,098
=========== ===========
Diluted weighted average common shares outstanding 7,142,036 6,901,098
=========== ===========
</TABLE>
5
<PAGE>
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
--------------------------
1999 1998
----------- ----------
Cash Provided By (Used In):
Operating activities:
<S> <C> <C>
Net Income $ 304,984 $(816,040)
Adjustments to reconcile net income to cash
provided by (used in) operations:
Depreciation and amortization 408,723 668,550
Issuance of stock options/grants 208,841 16,151
Changes in Operating Working Capital:
Decrease(increase) in receivables, trade (441,769) 19,169
Decrease (increase) in inventories 6,295 (3,297)
Decrease in prepaid expenses 28,456 65,913
(Decrease) increase in accounts payable (220,604) 12,772
Decrease in other accrued expenses (138,674) (78,418)
(Decrease) increase in deferred revenue (422,207) 68,950
--------- ---------
Total adjustments (570,939) 769,790
Cash utilized in operating activities (265,955) (46,250)
--------- ---------
Investing Activities:
Additions to equipment and leasehold improvements (111,719) (42,564)
Additions to computer software (4,000) (188,192)
--------- ---------
Cash utilized in investing activities (115,719) (230,756)
--------- ---------
Financing Activities:
(Repayment of) addition to debt (143,414) (99,337)
--------- ---------
Cash provided by (utilizing in) financing activities (143,414) (99,337)
--------- ---------
Decrease in cash and cash equivalents (525,088) (376,343)
Effect of exchange rates on cash 13,755 46,019
Cash and cash equivalents, at beginning of period 776,146 628,329
--------- ---------
Cash and cash equivalents, at end of period $ 264,813 $ 298,005
Supplemental disclosures:
Cash paid during the year for interest $ 11,155 $ 22,315
</TABLE>
6
<PAGE>
CTI GROUP (HOLDINGS) INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: Business and Basis of Presentation
CTI Group (Holdings) Inc. and Subsidiaries (the "Company") designs, develops,
markets and supports data processing software and services for managing
telecommunications systems.
The accompanying consolidated financial statements have been prepared by CTI
Group (Holdings) Inc. without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"), and reflect all adjustments
which, in the opinion of management, are necessary for a fair statement of the
results for the interim periods presented. All such adjustments are of a normal
recurring nature. Certain previously reported amounts have been reclassified to
conform with the current period presentation.
Certain information in footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been condensed or omitted pursuant to the rules and regulations of the SEC,
although the Company believes the disclosures are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the financial statements and the notes thereto included in
the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31,
1999.
NOTE 2: Basic and Diluted Income (Loss) Per Common Share
Net income (or loss) per common share is computed in accordance with the
provision of SFAS No. 128, "Earnings Per Share". Basic earnings per share is
computed by dividing reported earnings available to common stockholders by the
weighted average shares outstanding for the period. Diluted earnings per share
is computed by dividing reported earnings available to common stockholders by
weighted average shares outstanding for the period giving effect to securities
considered to be dilutive potential common shares such as stock options. The
effect of all dilutive potential common shares would increase dilutive weighted
average shares by 356,626 shares for the quarter ended December 31,1999
resulting in dilutive weighted average shares of 7,498,662 had they been
dilutive. Basic and diluted earnings per share were $(0.02) per share for the
quarter ended December 31, 1999. The effect of all dilutive potential common
shares was to increase dilutive weighted average shares 300,071 shares for the
nine months ended December 31, 1999 resulting in dilutive weighted average
shares of 7,296,839. Basic and diluted earnings per share were $0.04 per share
for the nine months ended December 31, 1999. Because the Company incurred losses
for the quarter ended December 31, 1998 and December 31, 1999 the effect of all
dilutive potential common shares was antidilutive. Consequently, the Company's
basic and diluted earnings per share were the same for the quarter and nine
months ended December 31, 1998 and the quarter ended December 31, 1999.
NOTE 3: Income Taxes
The Company utilized the benefit of available net operating loss carry-forwards
with an equivalent tax benefit to offset any tax liability as a result of income
which arose in the nine months period ended December 31, 1999.
7
<PAGE>
NOTE 4: Segment Information
The Company designs, develops, markets and supports data processing software and
services for managing telecommunication systems. These business operations fall
into two major classifications: telemanagement and billing and customer care.
The Company's telemanagement products and services are used by organizations to
optimize the usage of their telecommunication services and equipment and to
control telephone expenses and uses. The Company's billing and customer care
software products are used by small to mid-range telephone and wireless network
operators to manage customer accounts, generate bills, track payments and
customer service operations. The Company conducts business in the United Kingdom
and United States. Activities in the United Kingdom are primarily telemanagement
activities. A summary of the Company's operations by geographic area for periods
ended on December 31, 1999 and 1998.
<TABLE>
<CAPTION>
3 Months Ended 9 Months Ended
December 31, December 31,
UK USA Consolidated UK USA Consolidated
----------------------------------- -------------------------------------
1999
- ----
<S> <C> <C> <C> <C> <C> <C>
Total net sales $ 1,061,530 $ 559,549 $ 1,621,079 $ 3,805,811 $ 1,780,989 $ 5,586,800
=========== =========== =========== =========== =========== ===========
Net income $ (116,488) $ (51,417) $ (167,905) $ 292,595 $ 12,389 $ 304,984
=========== =========== =========== =========== =========== ===========
1998
- ----
Total net sales $ 976,878 $ 700,172 $ 1,677,050 $ 3,097,313 $ 2,035,727 $ 5,133,040
=========== =========== =========== =========== =========== ===========
Net loss $ (201,602) $ 24,012 $ (177,590) $ (625,578) $ (156,802) $ (782,580)
=========== =========== =========== =========== =========== ===========
</TABLE>
The following table summarizes the Company's financial information by industry
segment.
<TABLE>
<CAPTION>
3 Months Ended 9 Months Ended
December 31, December 31,
------------ ---------------
1999 1998 1999 1998
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Telemanagement $1,428,416 $1,448,654 $5,083,125 $4,491,603
Billing and customer care 192,663 228,396 503,675 641,437
---------- ---------- ---------- ----------
Total Sales $1,621,079 $1,677,050 $5,586,800 $5,133,040
1999 1998 1999 1998
Net (loss) Income:
Telemanagement $ (242,250) $ (262,993) $137,252 $(911,139)
Billing and customer care 74,345 85,403 167,732 95,099
Net (loss) income $ (167,905) $ (177,590) $304,984 $(816,040)
</TABLE>
8
<PAGE>
NOTE 5: Subsequent Event
On February 3, 2000 the company entered into an Agreement and Plan of Merger
with Centillion Data Systems, Inc. "(Centillion)" pursuant to which Centillion's
telecommunications billing business will be merged into CTI Group (Holdings).
Centillion is a telecommunication company with annual billing revenues of
approximately $10.9 million dollars.
Centillion will divest itself of all businesses other than its billing business,
and Centillion's shareholders will initially receive 9,080,738 shares of CTIG
Common Stock. Centillion shareholders will be able to receive an additional
3,215,100 shares of CTIG Common Stock over a three year period based upon
revenues by CTIG from Sprint Communications Company L.P. (Centillion's largest
current customer) and from any business that CTIG may derive from defendants in
certain patent infringement litigation brought by Centillion. If CTIG does not
meet these revenues target, Centillion's shareholders will be entitled to
purchase any shares not issued, at $1.50 per share.
The Centillion businesses that are not related to the billing business are being
transferred to a limited liability company (that will be owned by current
Centillion shareholders) in exchange for a Promissory Note that will not exceed
$11,500,000, which CTIG will acquire in the merger. Principal and interest will
be paid as those businesses are sold. CTIG will issue additional shares of
Common Stock to the Centillion shareholders for those payments, at a per share
value of 88% of the average market value of the Common Stock at the time. If the
Promissory Note is not fully paid in five years it is to be appraised, and
shares of CTIG Common Stock are to be issued for the appraised value at the
average market price at the time.
Consummation of the merger is subject to certain customary conditions including
regulatory and other approvals.
9
<PAGE>
ITEM 2
Management's Discussion and Analysis or Plan of Operation
Cautionary Statement Regarding Forward-Looking Statements
This report contains "forward-looking" statements. The Company is including this
statement for the express purpose of availing itself of protections of the safe
harbor provided by the Private Securities Litigation Reform Act of 1995 with
respect to all such forward-looking statements. Examples of forward-looking
statements include, but are not limited to: (a) projections of revenues, capital
expenditures, growth, prospects, dividends, capital structure and other
financial matters; (b) statements of plans and objectives of the Company or its
management or Board of Directors; (c) statements of future economic performance;
(d) statements of assumptions underlying other statements and statements about
the Company and its business relating to the future; and (e) any statements
using the words "anticipate", "expect", "may", "project", "intend" or similar
expressions.
The Company's ability to predict projected results or the effect of certain
events on the Company's operating results is inherently uncertain. Therefore,
the Company wishes to caution each reader of this report to carefully consider
the following factors, any or all of which have in the past and could in the
future affect the ability of the Company to achieve its anticipated results and
could cause actual results to differ materially than those discussed herein:
ability to attract and retain customers to purchase its products, ability to
commercialize and market products, results of research and development,
technological advances by third parties and competition, future capital needs of
the Company, history of operating losses, dependence upon key personnel and
general economic and business conditions.
Results of Operations
Revenues from operations increased $453,760 to $5,586,800 for the nine months
and a decrease of $55,971 to $1,621,079 for the quarter ended December 31, 1999,
as compared to the prior year period. There was an increase in net income of
$1,121,024 for the nine months and $9,685 for the quarter ended December 31,
1999 primarily due to the increase in revenues from CTI Data Solutions Ltd., a
UK based wholly-owned subsidiary. This increase was offset by a decrease in
revenue of $254,738 for the nine months ended December 31, 1999, and $140,623
for the quarter ended December 31, 1999 from CTI Data Solutions Inc., a US based
wholly-owned subsidiary. Revenues increased from CTI Data Solutions Ltd.
primarily as a result of increased sales of its new C6Win product line. Revenues
generated from CTI Data Solutions Inc. slightly decreased compared to the prior
year as a result of anticipated continued migration of revenues derived from
service bureau activities in excess of increases in newer technology based
telemanagement and billing products. During the second half of its fiscal year
the Company anticipates that it will be able to replace and exceed continued
declines in service bureau activities by its newer technology based
telemanagement and billing product software.
Cost of Sales were 54% of revenues for nine months and 65% for the quarter ended
December 31, 1999 as compared to 53% and 53% respectively in the prior year
period. Costs of sales increased 58% as a percentage of revenues for the nine
months ended December 31, 1999 and 74% for the quarter ended December 31, 1999,
as compared to 55% and 58% respectively in the prior year period for CTI Data
Solutions Ltd, a UK based wholly-owned subsidiary. This is due primarily to an
increase in hardware sales from CTI Data Solutions Ltd., a UK based wholly-owned
subsidiary. This was offset by a slight decrease of 47% as a percentage of
revenues for the nine months and quarter ended December 31, 1999 as compared to
50% and 46% respectively in the prior year period for CTI Data Solutions Inc., a
US based wholly-owned subsidiary. This slight decrease was due primarily to an
offset by the continued operational efficiencies and improved sales efforts.
10
<PAGE>
Selling, general and administrative ("SG&A") expenses were 33% of revenues for
nine months and 37% for the quarter ended December 31, 1999 and 48% and 41%
respectively for the same period in 1998. There was a decrease of 33% for the
nine months and 35% for the quarter ended December 31, 1999 compared to 53% and
48% respectively in the prior year period for CTI Data Solutions Ltd, a UK based
wholly-owned subsidiary. There was a decrease of 32% for the nine months ended
December 31, 1999 compared to 39% for the prior year period for CTI Data
Solutions Inc, a US based wholly-owned subsidiary, despite an increase of 42%
for the quarter ended December 31, 1999 as compared to 32% in the prior year
period. The decrease was primarily the result of cost containment measures
initiated during 1999. These cost containment measures included the reduction in
non-essential staff. The Company realized a 25% decrease in SG&A expenses for
nine months and 13% for the quarter ended December 31, 1999 compared to the same
period in 1998 despite an increase in revenues of 9% for nine months and
decrease of 3% for the quarter ended December 31, 1999.
The depreciation and amortization expenses decreased by $259,827 a decrease of
39% for nine months and $87,002 a decrease of 40% for the quarter ended December
31, 1999 over the same period last year due to the elimination of computer
software costs and fixed assets resulting from the purchase price adjustment on
March 31, 1999 related to the original purchase of Databit from Siemens.
Liquidity and Capital Resources
Cash and cash equivalents amounted to $264,813 as of December 31, 1999 compared
to $776,146 as of March 31, 1999. The decrease in cash is primarily the result
of cash utilized in operations of approximately $265,955 related to increased
operational activity, cash utilized in investing activities related to the
acquisition of fixed assets of approximately $115,719 and cash utilized in
financing activity related to the pay down of debt of approximately $143,414.
Deferred revenues have decreased over the same period last year due to the
decrease of non-Y2K compliance maintenance renewals that have expired on
December 31, 1999. These customers contracts have been prorated until December
31, 1999 and have been offered our Y2K compliant software
The consolidated financial statements of the Company have been prepared on a
going concern basis, which contemplates the continuation of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. The Company has a deficiency in working capital of $533,077 at
December 31, 1999 compared to a deficit of $1,369,928 at March 31, 1999 and has
generated net income of $304,984 for the nine months ended December 31, 1999,
compared to a net loss of $816,040 for the previous period. In addition, the
Company's line of credit was fully utilized as of December 31, 1999 and expires
in September 2000.
The Company believes that it will be able to continue to show a profit as shown
in the first nine months ended December 31, 1999. The company believes that the
hiring of a new sales representative for its US operations and the release of
orders that were frozen due to Y2k concerns in the UK operations will help the
company to generate more revenue and turn a profit in the last quarter of this
fiscal year. The company continues to reduce expenses whenever necessary and
through comparative buying measures. The company believes that with these
measures in place the company can generate cash and continue to show a profit.
11
<PAGE>
Year 2000 Compliance Issues
The Company believes that its software products and services are Year 2000
compliant with the exception of certain older telemanagement software products
that are no longer being supported. Customers still utilizing these older
telemanagement software products have been notified that those products are no
longer being supported and that Year 2000 compliant software is available.
Licensing Fees on the non-compliant Year 2000 software, has been phased out and
were insignificant for the nine months ended December 31, 1999. Management
believes that the elimination of the non-compliant Year 2000 revenue stream will
be replaced by the customers switching to the Year 2000 compliant replacement
software products. For a minority of customers this will not be possible,
however, the net cost to the Company of conversion of such customers is not
anticipated to be material. The Company has converted the service bureau
customers of CTI Data Solutions Inc. to a Year 2000 compliant system. The cost
of this was approximately $16,000. There were also be additional costs to
convert some of the Company's internal computer systems to become Year 2000
compliant. The computer systems affected are administrative in nature and will
not of themselves disrupt the operations of the Company, in the event of
failure. The cost of converting the internal computer systems was approximately
$10,000 and has been successfully upgraded or replaced to become Year 2000
compliant.
The Company's total costs incurred to ensure the Company's products and systems
were Year 2000 compliant was approximately $30,000. The Company has contacted
significant vendors with respect to their Year 2000 compliance issues. To date
the Company is not aware of material non-compliance with its vendors.
+The Company believes its internal computer systems are Year 2000 compliant;
however, the Company cannot guarantee that its internal computer systems or the
systems of other companies are timely converted or that a failure to convert by
another company, or a conversion that is incompatible with our systems, would
not have material adverse effect on its operations.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
None
ITEM 2 - Changes in Securities:
None
ITEM 3 - Details Upon Senior Securities:
Not Applicable
ITEM 4 - Submission of Matters to a Vote of Security Holders:
There were no matters submitted for a vote of security holders during
the three months ended December 31, 1999.
ITEM 5 - Other Information:
None
ITEM 6 - Exhibits and Reports on Form 8 - K for this quarter:
(a) Exhibits - None
(b) Form 8 - K-None
13
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
- ------------------------------- ---------------
Anthony P. Johns Date
Chairman & Chief Executive Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 264,814
<SECURITIES> 0
<RECEIVABLES> 1,163,972
<ALLOWANCES> 90,060
<INVENTORY> 16,183
<CURRENT-ASSETS> 1,419,497
<PP&E> 533,143
<DEPRECIATION> 363,845
<TOTAL-ASSETS> 2,151,643
<CURRENT-LIABILITIES> 1,952,574
<BONDS> 0
0
0
<COMMON> 74,106
<OTHER-SE> 124,963
<TOTAL-LIABILITY-AND-EQUITY> 2,151,643
<SALES> 5,586,800
<TOTAL-REVENUES> 5,586,800
<CGS> 3,029,873
<TOTAL-COSTS> 5,279,286
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6,707
<INTEREST-EXPENSE> 2,530
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 304,984
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
