SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark one)
(X) Quarterly Report Under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 1996
( ) Transition Report under Section 13 or 15 (d) of the Exchange
Act for the transition period from ________ to _________
For Quarter Ended March 31, 1996
Commission File No. 0-10696
LogiMetrics, Inc.
A Delaware Corporation I.R.S. Employer Identification
No. 11-2171701
121-03 Dupont Street, Plainview, New York 11803
(516) 349-1700
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 [ ]
Common Stock Issued and Outstanding as of March 31, 1996
Par Value $.01 per share - 2,860,602
<PAGE>
INDEX
LOGIMETRICS, INC. AND SUBSIDIARY
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheet - 3
March 31, 1996
Condensed consolidated statements of operations and
(deficit) retained earnings - Nine months ended
March 31, 1996 and 1995 4
Condensed consolidated statements of operations and
(deficit) retained earnings - Three months ended
March 31, 1996 and 1995 5
Condensed consolidated statements of cash flows -
nine months ended March 31, 1996 and 1995 6
Notes to condensed consolidated financial statements
- March 31, 1996 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 11
PART II OTHER INFORMATION
The information required in Part II, Items 1, 3, and 5, are
inapplicable and have therefore been omitted.
Item 2. Changes in Securities 13
Item 4. Submission of Matters to a Vote of Security-Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
LOGIMETRICS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
ASSETS (Note 4)
CURRENT ASSETS:
Cash $ 957,866
Accounts receivable, less allowance
for doubtful accounts of $75,000 1,011,170
Cost and estimated earnings in excess of
billings and uncompleted contracts (Note 2) 1,239,257
Inventories (Note 3) 2,155,295
Prepaid expenses and other current assets 179,192
---------
Total current assets 5,542,780
Equipment and fixtures 391,249
Deferred financing costs (Note 4) 315,375
Other assets 29,149
---------
TOTAL ASSETS $ 6,278,553
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,834,686
Current portion of long-term debt (Note 4) 181,043
---------
Total current liabilities 2,015,729
---------
LONG-TERM DEBT (Note 4) 4,019,294
---------
COMMITMENTS (Note 5)
STOCKHOLDERS' EQUITY (Notes 6 and 9)
Preferred Stock:
Series A, Stated value $50,000 per share;
authorized, 200 shares; issued and
outstanding, 30 shares 1,500,000
Common Stock:
Par Value $.01: authorized,
35,000,000 shares; issued and
outstanding, 2,860,602 shares 28,606
Additional paid-in capital 1,881,855
Deficit (3,002,731)
---------
407,730
Less: Stock subscriptions receivable (164,200)
---------
243,530
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,278,553
=========
See Notes to Consolidated Financial Statements
- 3 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND (DEFICIT) RETAINED EARNINGS
(UNAUDITED)
NINE MONTHS ENDED MARCH 31,
--------------------------
1996 1995
---- ----
Net sales $ 3,526,633 $ 6,314,178
Cost of sales 4,088,233 4,490,737
--------- ---------
Gross (loss) profit (561,600) 1,823,441
--------- ---------
Expenses:
Selling, general and administrative 1,464,848 1,421,019
Non-recurring charges (Note 7) 1,626,000 -
--------- ---------
Total Expenses 3,090,848 1,421,019
--------- ---------
(Loss) Income from operations (3,652,448) 402,422
Interest Expense 250,678 224,220
--------- ---------
(Loss) before income taxes (3,903,126) 178,202
(Benefit) Provision for income taxes (299,000) 71,000
--------- ---------
Net (Loss) Earnings $(3,604,126) $ 107,202
========= =========
Retained Earnings, beginning
of period $ 601,395 $ 443,618
Net (Loss) Earnings (3,604,126) 107,202
--------- ---------
(Deficit) Retained Earnings,
end period $(3,002,731) $ 550,820
========= =========
(Loss) Earnings per common share (Note 8) $ (1.26) $ .04
Weighted average number of common shares
and equivalents outstanding (Note 8) 2,860,602 2,652,244
See Notes to Consolidated Financial Statements
- 4 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND (DEFICIT) RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
---------------------------
1996 1995
---- ----
Net sales $ 947,775 $ 2,534,354
Cost of sales 917,616 1,835,972
--------- ---------
Gross Profit 30,159 698,382
--------- ---------
Expenses:
Selling, general and administrative 694,477 533,156
Non-recurring charges (Note 7) 1,626,000 -
--------- ---------
Total expenses 2,320,477 533,156
--------- ---------
(Loss) Income from operations (2,290,318) 165,226
Interest Expense 87,650 83,691
--------- ---------
(Loss) Income before income taxes (2,377,968) 81,535
Provision for income taxes - 32,000
--------- ---------
Net (Loss) Earnings $(2,377,968) $ 49,535
========= =========
(Deficit) Retained Earnings,
beginning of period $ (624,763) $ 501,285
Net (Loss) Earnings (2,377,968) 49,535
--------- ---------
(Deficit) Retained Earnings,
end of period $(3,002,731) $ 550,820
========= =========
(Loss) Earnings per common share (Note 8) $ (.83) $ .02
Weighted average number of common shares
and equivalents outstanding (Note 8) 2,860,602 2,652,244
See Notes to Consolidated Financial Statements
- 5 -
<PAGE>
LOGIMETRICS, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED MARCH 31,
--------------------------
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings $(3,604,126) $ 107,202
--------- ---------
Adjustments to reconcile net earnings
to net cash used in operating
activities:
Depreciation and amortization 69,381 70,325
Non-cash compensation - 33,000
Deferred income tax (benefit) provision (299,000) 40,000
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable 1,014,876 379,201
Costs and estimated earnings in excess
of billings on incomplete contracts 2,119,726 (903,914)
Inventories (86,967) 4,308
Prepaid expenses and other
current assets (120,056) 4,121
Other assets (298,342) 6,007
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (388,774) 62,359
Income tax payable - current - 31,000
--------- ---------
Total adjustments 2,010,844 (273,593)
--------- ---------
Net cash provided by (used in) operating
activities (1,593,282) (166,391)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (77,148) (5,362)
--------- ---------
Net cash (used in) investing activities (77,148) (5,362)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of debt financing 1,894,936 300,000
Proceeds of Preferred Stock issuance 1,145,595 -
Repayment of loans from stockholders (60,000) -
Repayment of debt (393,093) (92,188)
--------- ---------
Net cash provided by financing activities 2,587,438 207,812
NET INCREASE IN CASH 917,008 36,059
CASH, beginning of period 40,858 80,082
--------- ---------
CASH, end of period $ 957,866 $ 116,141
========= =========
See Notes to Consolidated Financial Statements
- 6 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Financial Statements
The accompanying consolidated financial statements include
the accounts of LogiMetrics, Inc. and its wholly owned subsidiary
(collectively called the "Company"). All intercompany balances and
transactions have been eliminated.
The balance sheet as of March 31, 1996, the statements of
operations and (deficit) retained earnings for the nine month and three month
periods ended March 31, 1996 and 1995, and the statements of cash flows for
the nine month periods then ended have been prepared by the Registrant without
audit. Such accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial reporting and with the instructions to Form 10-QSB.
Accordingly, they do not include all of the information and disclosures
required by generally accepted accounting principles for complete financial
statements. In the opinion of management all adjustments, consisting of normal
recurring accruals considered necessary for a fair presentation have been
included. Results for the three and nine months ended March 31, 1996 are not
necessarily indicative of the results that may be achieved for the year ending
June 30, 1996. These statements should be read in conjunction with the
financial statements and related notes included in the Company's annual report
on Form 10-KSB for the year ended June 30, 1995.
2. Costs and Estimated Earnings in Excess of Billings on
Uncompleted Contracts
Cost and estimated earnings in excess of billings on uncompleted
contracts consist of the following at March 31, 1996 :
Costs and estimated earnings $2,179,714
Less: Progress billings (940,457)
-----------
$1,239,257
===========
3. Inventories
Inventories consist of the following at March 31, 1996:
Raw material and components $2,076,395
Work-in-process 78,900
----------
$2,155,295
==========
- 7 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
4. Long-Term Debt
Long-Term debt consists of the following at March 31, 1996:
Notes payable to bank $2,336,132
Senior Convertible Subordinated
Debentures 1,500,000
Convertible Subordinated Debentures 300,000
Other obligations 64,205
----------
$4,200,337
Less: Current portion (181,043)
----------
$4,019,294
==========
The Company has two credit facilities available to it from a bank.
The facilities provide the Company with a revolving loan of $2,200,000 which
matures October 31, 1997, and a term loan of $800,000 which matures December
31, 1998. An aggregate of $2,336,132 was outstanding at March 31, 1996. The
revolving loan bears interest at the rate of 2% per annum in excess of the
prime rate; the term loan bears interest at the rate of 1.5% per annum in
excess of the prime rate. The prime rate was 8.25% at March 31, 1996. All
corporate assets serve as collateral for the credit facilities.
The credit facilities with the bank contain certain financial
covenants, effective beginning June 30, 1996, which would be in default as of
March 31, 1996. The Company expects to renegotiate these covenants with the
bank to reflect the restructuring and to facilitate the Company's growth in
the communications market.
On March 7, 1996 the Company completed a second private offering of
30 Units of its securities. Each unit consists of one $50,000 12% Convertible
Senior Subordinate Debenture, due December 31, 1998, and one Series C warrant.
The Debentures are subordinated to the Company's bank debt and capital lease
obligations.
On July 14, 1995, the Company completed a private offering of 15
Units of its securities at a price of $20,800 per Unit. Each Unit consists of
one $20,000 12% Convertible Subordinated Debenture and one Series A Warrant
and Series B Warrant. The Debentures are payable on July 14, 1997 and are
subordinated to the Company's bank debt and capital lease obligations.
Deferred financing costs are being amortized on the straight-line
basis over the lives of the related loans.
- 8 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
5. Commitments
In 1996 the Company entered into and amended employment agreements
with certain key executives of the Company. The agreements, which expire from
1998 to 2000, provide for aggregate minimum annual salaries of $402,000.
One of the employment agreements provides for a signing bonus of
$200,000, which has been charged to operations in the quarter ended March 31,
1996. This agreement further provides for the issuance of options to purchase
1,000,000 shares of the Company's common stock, in vested increments, through
December 31, 1999 at prices ranging from $.40 to $4.00 per share.
In December 1995, the Company entered into a consulting agreement
with two companies. Under the terms of the agreement, Series E Warrants were
issued, which entitle the holders thereof to purchase an aggregate of
1,000,000 shares of the Company's Common Stock at a price of $.40 per share at
any time prior to the seventh anniversary of the Series E Warrant.
6. Stockholders' Equity
In August 1995, all Class B common stock (250,000 shares) was
converted to Class A common stock. As a result of this conversion, the number
of Class A shares issued and outstanding increased by 250,000 shares to
2,860,602 shares.
In March 1996, the Company's Certificate of Incorporation was
amended. Among other things, the authorized Common Stock of the Company was
increased from 7,000,000 shares of Class A Common Stock, par value $.10 per
share, to 35,000,000 shares of Common Stock, par value $.01 per share. The
appellation "Class A" has been eliminated from the Common Stock, since there
are no longer any shares of Class B Common Stock outstanding.
In addition, the Company's Certificate of Incorporation was amended
to authorize 200 shares of Preferred Stock, par value $.01 per share.
In March 1996, the Company completed a private offering of 30 Units
of its securities, each Unit consists of one share of 12% Cumulative
Convertible Redeemable Preferred Stock of the Company and one Series D
Warrant.
- 9 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
Each share of Preferred Stock is convertible on or after May 5, 1996
into 94,340 shares of Common Stock of the Company. Each Series D Warrant
entitles the holder thereof to purchase 94,340 shares of Common Stock of the
Company at a price of $.01 per share at any time prior to the seventh
anniversary of the issuance thereof.
7. Non-Recurring Charges
In the current three month period, the Company incurred restructuring
and unusual charges of $1,626.000, reflecting the implementation of the new
marketing focus. The charges include write-offs of slow moving and obsolete
inventory ($268,000), write downs of inventory to lower of cost or market
($867,000), write-offs of previously capitalized product design costs
($391,000) and accruals for severance benefits ($100,000).
8. (Loss) Earnings Per Share
(Loss) Earnings per common share for the nine month and three month
periods ended March 31, 1996 and 1995 were computed by dividing the (loss)
earnings by the weighted average number of shares of common stock outstanding
during the period. Equivalent shares resulting from the assumed exercise of
options and warrants have been excluded from the calculation as their effect
is anti-dilutive.
- 10 -
<PAGE>
LOGIMETRICS, INC. AND SUBSIDIARY
Item 2: Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
On March 7, 1996, the Company was recapitalized and new management
was brought in to restructure the Company. A primary objective of the
restructuring was to redirect the Company's marketing focus to the burgeoning,
higher value added, communications market. The period ended March 31, 1996 has
been significantly impacted by the Company's change in focus and by the
inactivity and other inefficiencies during the period preceding the change in
control.
Net sales for the three and nine month periods ended March 31, 1996
were $947,775 and $3,526,633, respectively. Compared to the corresponding
prior periods, net sales declined $1,586,579 (63%) and $2,787,545 (44%),
respectively. The declines in both periods were a direct result of project
delays and inactivity due to a shortage of cash.
Gross (loss) profits for the three and nine month periods were $30,159
and negative $(561,600), respectively. Compared to the corresponding prior
periods, gross profits declined $668,223 (96%) and $2,385,041 (131%),
respectively. The gross profit declines reflect the sales declines, compounded
by the inefficiencies resulting from the lack of resources prior to the March
7, 1996 infusion of cash. Projects thought to be near completion at the
beginning of the period were not completed due to an inability to
obtain components needed for timely completion. In addition, certain key
components on several projects were found to be defective late in the
production process. These events resulted in significant unfavorable labor and
overhead absorption and material usage variances.
Selling, general and administrative expenses for the three and nine
month periods ended March 31, 1996, were $ 694,477 and $1,464,848,
respectively. Compared to the corresponding prior periods, the expenses
increased $ 161,321 (30%) and $ 43,829 (3%), respectively. The increase in the
three month period includes a provision for bad debts of $71,000 and
recruiting expenses of $200,000, partially offset by lower travel costs, sales
commissions and other expenses. The increase in the nine month period reflects
the increase in the three month period, partially offset by reduced expenses
in the six month year to date comparison. The reduced expenses in that
comparison were primarily due to reduced travel costs, lower sales commissions
and other reduced expenses.
In the current three month period, the Company incurred restructuring
and unusual charges of $1,626,000 reflecting the implementation of the new
marketing focus. The non-recurring charges include write-offs of slow
moving and obsolete inventory ($268,000), write downs of inventory to lower
of cost or market ($867,000), write-offs of previously capitalized product
design costs ($391,000) and accruals for severance benefits ($100,000).
- 11 -
<PAGE>
Interest expense for three and nine month periods was $87,650 and
$250,678, respectively. Compared to the corresponding prior periods, the
expenses increased $3,959 (5%) and $26,458 (12%), respectively. The increased
expenses primarily reflect increased borrowing levels on the revolving loan
with the bank.
Financial Condition, Liquidity and Capital Resources
The Company had $ 957,866 in cash at March 31, 1996 compared with
$40,858 at June 30, 1995.
The increase in cash resulted from net cash provided by financing
activities ($2,587,438), partially offset by net cash used in operating
activities ($1,593,282) and capital expenditures ($ 77,148).
The Company has two credit facilities available to it from a bank.
The facilities provide the Company with a revolving loan of $2,200,000 which
matures October 31, 1997, and a term loan of $800,000 which matures December
31, 1998. An aggregate of $2,336,132 was outstanding at March 31, 1996. The
revolving loan bears interest at the rate of 2% per annum in excess of the
prime rate; the term loan bears interest at the rate of 1.5% per annum in
excess of the prime rate. The prime rate was 8.25% at March 31, 1996. All
corporate assets serve as collateral for the credit facilities.
The credit facilities with the bank contain certain financial
covenants, effective beginning June 30, 1996, which would be in default as of
March 31, 1996. The Company expects to renegotiate these covenants with the
bank to reflect the restructuring and to facilitate the Company's growth in
the communications market.
On March 7, 1996 the Company completed a second private offering of
30 Units of its securities. Each unit consists of one $50,000 12% Convertible
Senior Subordinate Debenture, due December 31, 1998, and one Series C warrant.
The Debentures are subordinated to the Company's bank debt and capital lease
obligations.
On March 7, 1996 the Company also completed a private offering of 30
Units of its securities, each Unit consists of the one share of 12% Cumulative
Convertible Redeemable Preferred Stock of the Company and one Series D Warrant.
On July 14, 1995, the Company completed a private offering of 15
Units of its securities at a price of $20,800 per Unit. Each Unit consists of
one $20,000 12% Convertible Subordinated Debenture and one Series A Warrant.
The Debentures are payable on July 14, 1997 and are subordinated to the
Company's bank debt and capital lease obligations.
The Company anticipates the need, before the end of the calendar
year, for additional sources of equity or debt to fund its expansion in the
communications market.
- 12 -
<PAGE>
PART II - OTHER INFORMATION
Item 2: Changes in Securities
Pursuant to the completion of a private offering of Units of the
Company's securities on March 7, 1996, the Company issued, among other
securities, 30 shares of its Series A 12% Cumulative Convertible Redeemable
Preferred Stock (the "Preferred Stock"). The Preferred Stock was issued at a
price of $50,000 per share and is convertible into 94,340 shares of the
Company's Common Stock, subject to certain dilution adjustments.
Holders of the Preferred Stock are entitled to receive, when as
declared by the Board of Directors out of funds legally available therefore,
cash dividends in an amount equal to 12% per annum of the stated value
($50,000) of each share of Preferred Stock, payable on each March 15, June 15,
September 15 and December 15 commencing June 15, 1996. Such dividends are
cumulative in nature. The terms of the Preferred Stock provide that no
dividend shall be paid or set aside for payment on the Company's Common Stock,
nor may any Common Stock be redeemed, retired or otherwise acquired by the
Company for valuable consideration unless and until the full cumulative
dividends on all shares of Preferred Stock for all past and current dividend
periods have been declared and paid. Accumulated dividends do not bear
interest. The dividend rate on the Preferred Stock is subject to increase upon
the occurrence of certain events. The holders of the Preferred Stock have no
voting or preemptive rights.
In liquidation, before any distribution or payment is made to holders of
Common Stock, holders of the Preferred Stock shall be entitled to receive its
stated value of $50,000 for each share of Preferred Stock, plus all accrued
and unpaid accumulated dividends. If assets of the Company are insufficient to
permit full payment of all amounts due on the Preferred Stock, holders of the
Preferred Stock shall be entitled to a ratable distribution of the Company's
available assets.
Item 4: Submission of Matters to a Vote of Security-Holders
On February 9, 1996, the Company held a Special Meeting of its
shareholders for the purposes of:
1. Ratifying an amendment to the Company's Certificate of Incorporation
to (a) increase its authorized shares of Class A Common Stock, par
value $.10 per share, from 7,000,000 shares to 35,000,000, including
a reduction in the par value of the Common Stock from $.10 to $.01
per share, and the deletion of the appellation "Class A" as no other
classes of the Company's Common Stock are outstanding and (b)
authorize 200 shares of the Company's preferred stock, par value $.01
per share, having such rights and preferences as shall be determined
by the Board of Directors.
- 13 -
<PAGE>
The Company's shareholders ratified the amendment to its Certificate
of Incorporation, with the results of the voting being as follows:
FOR AGAINST ABSTAIN
1,822,616 187 175
--------- ------- -----
2. Ratifying an amendment to the Company's Certificate of Incorporation
to provide for the indemnification of officers, directors, employees
and agents of the Company and limiting the liability of directors of
the Company to the fullest extent provided by law.
The Company's shareholders ratified the amendment to its Certificate
of Incorporation, with the results of the voting being as follows:
FOR AGAINST ABSTAIN
1,820,478 875 2,325
--------- ------- ------
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K
On March 7, 1996 the Company filed with the Securities and Exchange Commission
a Current Report on Form 8-K dated March 7, 1996 relating to (i) the change of
control of the Company as a result of a private offering of Units of its
securities, and (ii) the resignation of each of Messrs. Mark Fisher, Steven
Feigenbaum and Jerome Deutsch as directors and the appointment to the Board of
Directors of each of Messrs. Richard K. Laird, Lawrence I. Schneider, Henry N.
Schneider and Norman M. Phipps.
- 14 -
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
LOGIMETRICS, INC
Date: May 20, 1996 By:/S/ RICHARD K. LAIRD
------------------------------ --------------------------------
Richard K. Laird
Chairman, Chief Executive Officer,
(Principal Executive Officer)
Date: May 20, 1996 By:/S/ RUSSELL J. REARDON
------------------------------ --------------------------------
Russell J. Reardon
Chief Financial Officer
(Principal Accounting Officer)
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 957,866
<SECURITIES> 0
<RECEIVABLES> 1,011,170
<ALLOWANCES> (75,000)
<INVENTORY> 2,155,295
<CURRENT-ASSETS> 5,542,780
<PP&E> 2,286,082
<DEPRECIATION> 1,894,833
<TOTAL-ASSETS> 6,278,553
<CURRENT-LIABILITIES> 2,015,729
<BONDS> 1,800,000
<COMMON> 28,606
0
1,500,000
<OTHER-SE> (1,285,076)
<TOTAL-LIABILITY-AND-EQUITY> 6,278,553
<SALES> 3,526,633
<TOTAL-REVENUES> 3,526,633
<CGS> 4,088,233
<TOTAL-COSTS> 1,394,128
<OTHER-EXPENSES> 1,626,000
<LOSS-PROVISION> 70,720
<INTEREST-EXPENSE> 250,678
<INCOME-PRETAX> (3,903,126)
<INCOME-TAX> (299,000)
<INCOME-CONTINUING> (3,604,126)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,604,126)
<EPS-PRIMARY> (1.26)
<EPS-DILUTED> 0
</TABLE>
