SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to _______
Commission file number 0-10696
LogiMetrics, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 11-2171701
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Orville Drive, Bohemia, New York 11716
(Address of principal executive offices)
Issuer's telephone number: (516) 784-4110
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Common Stock, par value Outstanding at February 20, 1998:
$.01 per share 25,648,984 shares
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
LOGIMETRICS, INC.
INDEX
PAGE
Part I - Financial Information
Item 1. Consolidated Financial Statements (Unaudited)
Balance Sheet - September 30, 1997................................ 3
Statements of Operations -
Three months ended September 30, 1997 and 1996.................... 4
Statements of Cash Flows -
Three months ended September 30, 1997 and 1996.................... 5
Notes to Consolidated Financial Statements........................ 6-7
Item 2. Management's Discussion and Analysis or Plan of Operation.... 8-11
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities............................... 12
Item 6. Exhibits and Reports on Form 8-K.............................. 12
SIGNATURES............................................................. 13
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED BALANCE SHEET
September 30, 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 1,108,023
Accounts receivable, less allowance
for doubtful accounts of $150,000 2,248,449
Costs and estimated earnings in excess of
billings on uncompleted contracts (Note 2) 133,379
Inventories (Note 3) 3,620,704
Prepaid expenses and other current assets 252,865
---------
Total current assets 7,363,420
Equipment and fixtures (net) 648,976
Deferred financing costs 167,470
Other assets 52,014
---------
TOTAL ASSETS $ 8,231,880
==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and other accrued expenses $ 3,651,922
Advance payments 1,095,907
Income taxes payable 189,109
Current portion of long-term debt (Note 4) 2,853,153
---------
Total current liabilities 7,790,091
Long-term debt (Note 4) 4,374,877
----------
TOTAL LIABILITIES $12,164,968
----------
COMMITMENTS
STOCKHOLDERS' DEFICIENCY (Note 4 and 5)
Preferred Stock:
Series A, stated value $50,000 per share;
authorized, 200 shares; issued and
outstanding, 28 shares 924,526
Common Stock:
Par value $.01; authorized
100,000,000 shares; issued and
outstanding, 25,601,814 shares 256,018
Additional paid-in capital 4,306,468
Deficit (8,514,650)
Stock subscriptions receivable (Note 5) (905,450)
-----------
TOTAL STOCKHOLDERS' DEFICIENCY $ (3,933,088)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 8,231,880
===========
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,
1997 1996
Restated (Note 1)
Net Revenues $ 1,011,698 $ 2,817,152
Cost and expenses:
Cost of revenues 1,136,148 2,101,755
Selling, general and administrative
expenses 818,220 906,183
Research and development 119,459 161,340
---------- ---------
Loss from operations (1,062,129) (352,126)
Interest expense 237,960 178,627
---------- ----------
Loss before income taxes (1,300,089) (530,753)
Provision (benefit) for
income taxes (227,455) 68,871
----------- ----------
Net loss (1,072,634) (599,624)
Preferred stock dividends 40,564 54,461
---------- ----------
Net loss attributable to
common shareholders $(1,113,198) $ (654 085)
========== ============
Loss per common share (Note 6) $ (0.05) $ ( 0.03)
Weighted average number of common
shares outstanding 24,606,345 22,202,754
========== ============
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended September 30,
1997 1996
(Restated Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,072,634) $ (599,624)
----------- --------
Adjustments to reconcile net loss to
net cash (used for) provided by
operating activities:
Depreciation and amortization 131,298 108,639
Increase (decrease) in cash from:
Accounts receivable (84,285) 1,169,218
Costs and estimated earnings
in excess of billings on
uncompleted contracts 651,634 (330,983)
Inventories (271,668) (308,371)
Prepaid expenses and other
current assets 45,647 58,423
Accounts payable and accrued
expenses (1,346,418) (497,951)
Other assets/liabilities (287,186) 754,017
---------- --------
Total adjustments (1,160,978) 952,992
----------- ----------
Net cash (used for) provided by
operating activities (2,233,612) 353,368
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and fixtures (68,137) (87,089)
--------- ----------
Net cash used for investing activities (68,137) (87,089)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt issuance - net 2,691,268 49,046
Proceeds from warrant issuance 525,833 -
Proceeds from sale of stock 12,500 -
Repayment of loan from
stockholders - net (200,000) (248,000)
Proceeds from exercise of warrants 14,717 -
Stock subscriptions received 8,500 -
Repayment of debt (11,373) (35,895)
--------- ----------
Net cash provided by (used for)
financing activities 3,041,445 (234,849)
--------- ----------
NET INCREASE IN CASH 739,696 31,430
CASH and CASH EQUIVALENTS, beginning
of period 368,327 269,248
---------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 1,108,023 $ 300,678
========== =========
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Financial Statements
The accompanying consolidated financial statements include the accounts of
LogiMetrics, Inc. ("LogiMetrics") and its wholly owned subsidiaries, mmTech,
Inc. ("mmTech") and LogiMetrics FSC, Inc. (collectively, the "Company"). All
intercompany balances and transactions have been eliminated. The consolidated
financial statements have been prepared to give retroactive effect to the
business combination with mmTech which occurred on April 25, 1997 and which has
been accounted for as a pooling of interests.
The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. The independent auditors' report on the
Company's financial statements for the fiscal year ended June 30, 1997 included
an emphasis paragraph concerning the Company's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The balance sheet as of September 30, 1997, the statements of operations for the
three-month periods ended September 30, 1997 and 1996, and the statements of
cash flows for the three-month periods ended September 30, 1997 and 1996, are
unaudited. Such 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 months ended September 30, 1997 are not necessarily indicative of the
results that may be achieved for any other interim period or for the fiscal year
ending June 30, 1998. 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, 1997.
2. Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
Costs and estimated earnings in excess of billings on uncompleted contracts
consist of the following at September 30, 1997:
Costs and estimated earnings $1,235,707
Less: Estimated loss upon completion (293,094)
Progress billings (809,234)
----------
$ 133,379
=========
3. Inventories
Inventory consists of the following at September 30, 1997:
Raw materials and components $ 1,312,969
Work-in-progress 1,665,909
Finished goods 641,826
---------
$ 3,620,704
=========
4. Long-Term Debt
Long-term debt consists of the following at September 30, 1997:
Notes payable to Bank $ 2,433,616
Class A Debentures 2,807,823
Class B Debentures 1,534,125
Less: Discount at issuance (457,628)
Plus: Amortization of discount 257,418
Notes payable - officer 432,653
Notes payable - other 45,000
Capital lease obligations 175,023
----------
Sub-total 7,228,030
Less: current portion 2,853,153
----------
Total long term debt $ 4,374,877
===========
Principal payments due on all long-term debt consist of the following:
Fiscal year ending June 30, 1998 $ 2,748,294
Fiscal year ending June 30, 1999 251,870
Fiscal year ending June 30, 2000 4,216,245
Thereafter 11,621
-----------
$ 7,228,030
===========
5. Stockholders' Deficiency
Stock Subscriptions Receivable
Stock subscriptions receivable consists of the following at September 30, 1997:
Notes from former officers $ 154,450
Notes from two employees 675,000
Notes from investors 41,000
Note from a director 35,000
-------------
$ 905,450
=============
6. Loss Per Share
Loss per common share was computed by dividing the net loss by the weighted
average number of shares of common stock outstanding during each of the periods
presented. The loss per share calculations for the three-month periods ended
September 30, 1997 and September 30, 1996, do not give effect to common stock
equivalents because they would have an antidilutive effect.
<PAGE>
LOGIMETRICS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996
Net revenues for the three months ended September 30, 1997 decreased $1.8
million, or 64.1%, to $1.0 million from $2.8 million for the comparable period
of 1996. The decline in revenues for the quarter ended September 30, 1997
resulted primarily from delays in shipment of certain orders, which had the
effect of delaying the recognition of revenues into later periods. These delays
affected both the LMDS market and the markets for the Company's other products.
Cost of revenues for the three months ended September 30, 1997 decreased $1.0
million, or 45.9%, to $1.1 million from $2.1 million for the comparable period
of 1996. As a percentage of net revenues, cost of revenues was 112.3% for the
quarter ended September 30, 1997, compared to 74.6% for the quarter ended
September 30, 1996. Cost of revenues did not decrease to the same extent as
revenues during the three months ended September 30, 1997 primarily as a result
of certain production inefficiencies resulting from lower manufacturing volume.
In addition, during the September 1997 quarter, the Company completed several
orders which had significantly higher associated costs compared to the quarter
ended September 30, 1996.
SG&A expenses for the three months ended September 30, 1997 decreased $88,000,
or 9.7%, to $818,000, from $906,000 for the comparable period of 1996, primarily
as a result of lower staffing expenses, offset in part by higher professional
fees and amortization of debt issuance costs. As a percentage of net revenues,
SG&A expenses increased to 80.9% of net revenues for the quarter ended September
30, 1997 from 32.2% for the comparable period of 1996, primarily as a result of
a lower revenue base.
Research and development expenses for the three months ended September 30, 1997
decreased $42,000, or 26.0%, to $119,000 from $161,000 for the comparable period
of 1996, consistent with the Company's efforts to streamline its operations and
deploy its resources more efficiently.
The Company has implemented certain staffing reductions and other measures in an
effort to reduce its cost base in order to improve profitability. No assurances
can be given, however, that such initiatives will ultimately succeed or as to
the impact, magnitude or duration of any expense savings that may be achieved.
For the reasons discussed above, operating losses for the three months ended
September 30, 1997 increased $710,000, or 201.6%, to $1.1 million from $352,000
for the comparable period in 1996.
Interest expense for the three months ended September 30, 1997 increased
$59,000, or 33.2%, to $238,000 from $179,000 for the comparable period of 1996,
primarily as a result of a higher level of average outstanding indebtedness.
During the quarter ended September 30, 1997, the Company had an income tax
benefit of $227,000, compared to an income tax expense of $69,000 for the
quarter ended September 30, 1996. The Company and mmTech currently file separate
federal and state tax returns. The tax benefit recorded in the quarter ended
September 30, 1997 relates to pre-tax losses generated by mmTech in that period.
During the quarters ended September 30, 1997 and 1996, the Company accrued
dividends on its outstanding preferred stock of $41,000 and $54,000,
respectively. The decrease in preferred stock dividends resulted from the
conversion of two shares of preferred stock into common stock during the quarter
ended September 30, 1997.
<PAGE>
For the reasons discussed above, net loss attributable to common shareholders
for the quarter ended September 30, 1997 increased $459,000, or 70.2%, to $1.1
million from $654,000 for the comparable period in 1996.
Liquidity and Capital Resources
At September 30, 1997, the Company had cash and cash equivalents of $1.1
million. At such date, the Company had total current assets of $7.4 million and
total current liabilities of $7.8 million.
Net cash used for operating activities was $2.2 million for the three months
ended September 30, 1997, compared to net cash provided by operating activities
of $353,000 for the comparable period in 1996. Net cash used for operating
activities during the three months ended September 30, 1997 resulted primarily
from a net loss of $1.1 million and the repayment of $1.3 million of accounts
payable, offset in part by a $652,000 decrease in costs and estimated earnings
in excess of billings on uncompleted contracts. Net cash provided by operating
activities during the three months ended September 30, 1996 resulted primarily
from a $1.2 million decrease in accounts receivable which more than offset a net
loss of $600,000.
Net cash used for investing activities was $68,000 for the three months ended
September 30, 1997, and $87,000 for the comparable period in 1996. Net cash used
for investing activities in each period resulted from the purchase of equipment
to support the Company's operations.
Net cash provided by financing activities was $3.0 million for the three months
ended September 30, 1997, while net cash used for financing activities was
$235,000 for the three months ended September 30, 1996. Net cash provided by
financing activities during the 1997 period resulted primarily from the proceeds
of certain debt and warrant issuances by the Company, offset in part by the
repayment of loans from an officer of the Company. Net cash used for financing
activities during the 1996 period resulted primarily from the repayment of
certain outstanding indebtedness.
Since January 1, 1996, the Company has raised approximately $6.1 million from
the private sales of convertible debentures, convertible preferred stock and
warrants to fund a portion of its cash flow needs. To the extent that the
Company is unable to meet its working capital requirements by generating
positive cash flow from operations, the Company intends to continue to fund a
portion of its working capital requirements through the sale of its securities.
There can be no assurance that the Company can continue to finance its
operations through the sale of securities or as to the terms of any such sales
that may occur in the future. If the Company is unable to generate sufficient
cash flows from operations or other sources, the Company may not be able to
achieve its growth objectives, may have to curtail further its marketing,
development or operations, and may be unable to continue as a going concern.
The Company is a party to a Restated and Amended Term Loan Note, dated as of
April 25, 1997, and a Sixth Restated and Amended Revolving Credit Note, dated as
of April 25, 1997, pursuant to which North Fork Bank (the "Bank") has provided
the Company with a $640,000 term loan (the "Term Loan") which matures December
31, 1998 and a revolving credit facility (the "Revolver") which matures April
30, 1998, pursuant to which the Company is entitled to draw up to $2.2 million
assuming sufficient eligible inventory and accounts receivable (the Term Loan
and the Revolver are referred to herein collectively as the "Facility").
Outstanding amounts under the Facility bear interest at the rate of 2% per annum
in excess of the Bank's prime rate. At September 30, 1997, the Bank's prime rate
was 8.5%. As a result of the Company's continuing losses, as of September 30,
1997, the Company was in violation of a covenant contained in the Facility that
the Company report net income of at least $1.00 for each fiscal quarter
beginning with the quarter ended June 30, 1997 (the "Net Income Covenant").
Additionally, as of November 14, 1997 and February 16, 1998, the Company was in
violation of a covenant contained in the
<PAGE>
Facility requiring the Company to deliver to the Bank financial statements for
the fiscal quarters ended September 30, 1997 and December 31, 1997, respectively
(the "Reporting Requirement Covenant"). The Bank has waived the Net Income
Covenant default in respect of the fiscal quarters ended June 30, 1997 and
September 30, 1997. The Bank has also waived the Reporting Requirement Covenant
default until March 31, 1998.
In addition to the Facility, at September 30, 1997 the Company had issued and
outstanding $2.8 million of its Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (the "Class A Debentures"), $1.5
million of its Amended and Restated Class B 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (the "Class B Debentures") and $45,000
of its Senior Subordinated Notes together with the Class A Debentures and the
Class B Debentures, the "Senior Subordinated Indebtedness"), which contain
financial covenants identical to those contained in the Facility. Accordingly,
as of September 30, 1997, the Company was in default in respect of the Net
Income Covenant contained in the Senior Subordinated Indebtedness to the same
extent as under the Facility. Additionally, as of November 14, 1997 and February
16, 1998, the Company was in default of the Reporting Requirement Covenant to
the same extent as under the Facility. The holders of the Senior Subordinated
Indebtedness have waived the Net Income Covenant default in respect of the
fiscal quarters ended June 30, 1997, September 30, 1997 and December 31, 1997,
and have waived the Reporting Requirement Covenant default until March 31, 1998.
Pursuant to the terms of the Class A Debentures and the Class B Debentures, the
Company is required to file a registration statement covering, among other
things, the resale of the shares of Common Stock issuable upon the conversion of
the Class A Debentures and the Class B Debentures on or prior to October 27,
1997 and to have the registration statement declared effective by the Securities
and Exchange Commission (the "SEC") on or prior to January 25, 1998. The Company
has not yet filed the registration statement. Unless the Company complies with
its registration obligations, the interest rate on the Class A Debentures and
the Class B Debentures will increase (subject to a maximum interest rate of 17%
per annum). The holders of the Class A Debentures and the Class B Debentures
have the right to declare all amounts thereunder due and payable if the
registration statement is not declared effective by the SEC on or prior to April
25, 1998. The holders of the Class A Debentures and the Class B Debentures have
waived until March 31, 1998 any default arising as a result of the Company's
failure to file the required registration statement.
At December 12, 1997, CellularVision Technology & Telecommunications, L.P.
("CT&T") was indebted to the Company in the amount of approximately $3.4
million, representing amounts due and owing as a result of equipment purchased
by CT&T. In December 1997, CellularVision of New York, L.P. ("CVNY"), an
affiliate of CT&T, entered into a letter agreement with the Company pursuant to
which CVNY agreed to pay on behalf of CT&T approximately $3.0 million of the
amounts owed by CT&T. Under the terms of the letter agreement, CVNY paid
$350,000 to the Company, and delivered to the Company a secured promissory note
in the principal amount of approximately $2.6 million (the "CVNY Note"). CVNY
paid the Company $50,000 pursuant to the terms of the CVNY Note. On December 31,
1997, the Company sold the CVNY Note for approximately $2.4 million. There can
be no assurance that the Company will receive payment of the remaining amounts
owed to it by CT&T or as to the timing of any such payments that are ultimately
made.
The Company and mmTech currently file separate federal and state income tax
returns. As of June 30, 1997, the Company had an approximate $6.1 million net
operating loss carry forward available to be used to offset future income.
Disclosure Regarding Forward Looking Statements
Certain information contained in this Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Although the Company believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions, there can be no
assurance that its expectations will be
<PAGE>
realized. Forward-looking statements involve known and unknown risks that may
cause the Company's actual results for future periods to differ materially from
management's expectations. Future events and actual results, financial and
otherwise, could differ materially from those set forth in or contemplated by
the forward-looking statements contained herein. Factors that could cause
results to differ materially from the Company's expectations include, but are
not limited to, the following: general economic and political conditions, as
well as conditions in the markets for the Company's products; the Company's
history of losses, cash constraints and ability to continue as a going concern;
the recent shift in the Company's business focus; the Company's dependence on
and the effects of government regulation; the Company's dependence on the LMDS
market and uncertainties relating to the size and timing of any such market that
ultimately develops; the Company's dependence on large orders and the effects of
customer concentrations; the Company's relationship with CT&T and the resulting
limitations on the Company's ability to sell certain of its products to third
parties; the Company's dependence on the sale of securities to meet its working
capital needs; the Company's dependence on future product development and market
acceptance of the Company's products, particularly in the LMDS market; the
Company's limited proprietary technology; possible fluctuations in quarterly
results; the effects of competition; risks related to international business
operations; the Company's dependence on independent sales representatives; and
the Company's dependence on a limited number of suppliers. Other factors may be
described from time to time in the Company's other filings with the SEC, news
releases and other communications.
<PAGE>
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
For a description of certain defaults under the Company's debt securities, see
Item 2. Management's Discussion and Analysis or Plan of Operation - Liquidity
and Capital Resources.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description
3.1 Certificate of Incorporation of LogiMetrics, Inc. (the "Company"), as
amended (previously filed as Exhibit 3.1 to the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1997 (file no. 0-10696) and
incorporated herein by reference).
3.2 By-laws, as amended, of the Company (previously filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997 (file no. 0-10696) and incorporated herein by reference).
4.1 Form of the Company's Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (previously filed as Exhibit 4.1
to the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1997 (file no. 0-10696) and incorporated herein by reference).
4.2 Form of the Company's Amended and Restated Class B 13% Senior Subordinated
Convertible Pay-in-Kind Debentures due July 29, 1999 (previously filed as
Exhibit 4.2 to the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1997 (file no. 0-10696) and incorporated herein by
reference).
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
Not applicable.
<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.
LOGIMETRICS, INC.
Dated: March 24, 1998 By:/s/ Erik S. Kruger
______________________________
Erik S. Kruger
Vice President
Finance and Administration and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-QSB FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 1,108,023
<SECURITIES> 0
<RECEIVABLES> 2,398,449
<ALLOWANCES> (150,000)
<INVENTORY> 3,620,704
<CURRENT-ASSETS> 7,363,420
<PP&E> 2,823,086
<DEPRECIATION> 2,174,110
<TOTAL-ASSETS> 8,231,880
<CURRENT-LIABILITIES> 7,790,091
<BONDS> 4,141,738
0
924,526
<COMMON> 256,018
<OTHER-SE> (5,113,632)
<TOTAL-LIABILITY-AND-EQUITY> 8,231,880
<SALES> 1,011,698
<TOTAL-REVENUES> 1,011,698
<CGS> 1,136,148
<TOTAL-COSTS> 2,073,827
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,960
<INCOME-PRETAX> (1,300,089)
<INCOME-TAX> (227,455)
<INCOME-CONTINUING> (1,072,634)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,072,634)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
