FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
of the Securities Exchange Act of 1934
For Quarter ended October 31, 1998
Commission file number 0-8006
COX TECHNOLOGIES, INC.
FKA: Energy Reserve, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
ARIZONA 86-0220617
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
69 McAdenville Road, Belmont, North Carolina 28912
--------------------------------------------------
Registrant's telephone number, including area code (704) 825-8146
Former name, former address and former fiscal year,
if changed since last report
Indicated 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicated by check mark whether the registrant has filed all documents and
reports required to by filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class - Common Stock, without Par Value
23,280,922 Shares Outstanding at December 31, 1998
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
PAGE
----
FACE SHEET 1
INDEX 2
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Consolidated Balance Sheets at
October 31, 1998 and July 31, 1998 4
Consolidated Statements of
Operations and Accumulated Deficit
Three Months Ended October 31, 1998 & 1997 5
Six Months Ended October 31, 1998 & 1997 6
Statement of Cash Flows Six Months Ended
October 31, 1998 and 1997 7
Notes to Consolidated Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 9-13
PART II. - OTHER INFORMATION AND SIGNATURE 13-14
2
<PAGE>
FINANCIAL
INFORMATION
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Cox Technologies, Inc. and its subsidiaries, Twin Chart, Inc., its subsidiary
Transit Services, Inc., Vitsab, AB, Sweden, Vitsab, USA, Inc., Energy Reserve
Holdings, Inc., and Energy Reserve Financial Corporation (collectively the
Company), engage in the business of producing and distributing transit
temperature recording instruments, both domestically in United States and
internationally. The Company also engages in the business of acquiring,
developing and selling oil properties and of producing and selling crude oil for
its own account in United States. As such the Company has not and does not
engage in petroleum refining or retail marketing.
The Consolidated Financial Statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and data notes thereto included in the Company's annual report on
Form 10-K, for the year ended April 30, 1998
In the opinion of the Company, all adjustments have been included which are
necessary for the preparation of the balance sheets of Cox Technologies, Inc.
and consolidated subsidiaries at October 31, 1998 and April 30, 1998 and to a
fair statement of the results of operations for the three months ended October
31, 1998 and 1997 and for the six months ended October 31, 1998 and 1997.
3
<PAGE>
COX TECHNOLOGIES, INC., AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 1998 AND APRIL 30, 1998
October 31, April 30,
1998 1998
---- ----
ASSETS
CURRENTS ASSETS:
Cash and cash equivalents (Note A) $ 1,776,733 $ 2,575,946
Accounts receivable, less allowance for
doubtful accounts of $29,527 at
October 31, 1992 and April 30, 1998 1,889,262 1,627,074
Inventory (Note B) 1,385,990 1,043,531
Investment in securities 62,100 39,500
Notes receivable-current portion 17,862 33,503
Prepaid expenses 87,401 352,143
Deferred income taxes (Note C) -0- 30,000
------------ ------------
TOTAL CURRENT ASSETS 5,219,348 5,701,696
Property and equipment (net) 6,413,277 3,704,243
Investments in securities -0- 300,000
Deposits 3,097 5,290
Goodwill (Note A) 847,663 48,479
Notes receivable - non-current portion 29,562 ____6,828
------------ ------------
TOTAL ASSESTS $ 12,512,947 $ 9,766,536
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 363,264 356,811
Income taxes payable (Note C) 26,702 52,270
Current portion of long-term debt (Note A) 1,246,720 510,369
------------ ------------
TOTAL CURRENT LIABILITIES 1,636,686 $ 919,450
Long-term debt 856,511 280,706
Minority Interest -0- 669
------------ ------------
TOTAL LIABILIATIES $ 2,493,197 $ 1,200,825
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note D)
STOCKHOLDERS' EQUITY
Common stock, no par value: authorized
100,000,000 shares; issued and outstanding
19,905, 188 shares at October 31, 1998
and at April 30, 1998 (Note A) 20,885,495 20,041,562
Common stock subscribed 58,100 58,100
Contributed Capital 220,872 220,872
Treasury stock (45,920) (45,920)
Accumulated deficit (10,169,113) (10,598,719)
Unrealized loss on available-for-sale securities -0- (180,500)
Less - notes receivable for common stock:
Issued (875,650) (875,650)
Subscribed (54,034) (54,034)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 10,019,750 8,565,711
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,512,947 $ 9,766,536
============ ============
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
Three Months Ended October 31
------------------------------
1998 1997
---- ----
REVENUE
Sales $ 2,248,525 $ 2,086,957
------------ ------------
COSTS AND EXPENSES
Cost of sales 1,129,310 986,501
General and administrative expenses 585,226 430,889
Sales expense 337,366 344,509
Interest expense 35,796 16,618
Depreciation and depletion 50,230 11,817
------------ ------------
TOTAL EXPENSE 2,137,928 1,790,334
------------ ------------
INCOME FROM OPERATIONS 110,597 296,623
OTHER INCOME (expense)
Other income (expense) 186,640 14,776
------------ ------------
Earnings before income taxes 297,237 311,399
Provisions for income taxes (note B) 40,900 12,011
------------ ------------
NET EARNINGS 256,337 299,388
ACCUMULATED DEFICIT, beginning of period (10,425,450) (13,379,020)
------------ ------------
ACCUMULATED DEFICIT, end of period $(10,169,113) $(13,079,632)
============ ============
EARNINGS PER SHARE:
Net earnings (loss) $ 0.01 $ 0.01
============ ============
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
Six Months Ended October 31,
------------------------------
1998 1997
---- ----
REVENUE
Sales $ 4,621,388 $ 4,244,312
------------ ------------
COSTS AND EXPENSES
Cost of sales 2,307,536 1,992,506
General and administrative expenses 1,186,452 944,961
Sales expense 710,113 625,087
Interest expense 77,520 34,906
Depreciation and depletion 75,322 _22,048
------------ ------------
TOTAL EXPENSE 4,356,943 3,619,508
------------ ------------
INCOME FROM OPERATIONS 264,445 624,804
OTHER INCOME (EXPENSE)
Other income (expense) 206,061 (748)
------------ ------------
Earnings before income taxes 470,506 624,056
Provisions for income taxes (note B) 40,900 38,401
------------ ------------
NET EARNINGS 429,606 585,655
ACCUMULATED DEFICIT, beginning of period (10,598,719) (13,665,287)
------------ ------------
ACCUMULATED DEFICIT, end of period $(10,169,113) $(13,079,632)
============ ============
EARNINGS PER SHARE:
Net earnings (loss) $ 0.02 $ 0.03
============ ============
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
Six Months Ended October 31,
----------------------------
1998 1997
---- ----
CASH FLOW FROM OPERATING ACTIVITIES
Net earnings $ 429,606 $ 585,655
Adjustments to reconcile net earnings
to net cash used by operating activities:
Depreciation and depletion 75,322 22,048
Loss on securities 180,500 -0-
CHANGES IN CURRENT ASSETS AND CURRENT LIABILITIES
(Increase) decrease in current assets:
Accounts receivable (262,188) (20,576)
Inventory (342,459) 30,502
Prepaid expenses 264,742 (188,641)
Notes receivable and investments (6,959) 330,648
(Increase) decrease in non-current assets
Deposits 2,193 -0-
Deferred taxes 30,000 -0-
Notes receivable - long term (22,734) -0-
Goodwill (803,184) 27,973
Increase (decrease) in current liabilities:
Accounts payable and accrued expenses 6,453 50,114
Income Taxes Payable (25,568) (37,246)
----------- -----------
NET CASH PROVIDED (used) BY OPERATING ACTIVITIES (474,276) 38,953
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Investment in securities 300,000 -0-
Issuance of common stock 843,933 -0-
Property and equipment-net disposal (2,780,356) 40,918
Minority interest (669) 2,674
----------- -----------
NET CASH PROVIDED (used)BY INVESTING ACTIVITIES (1,637,092) 43,592
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Repayment on notes payable (437,844) (86,104)
Borrowing under notes payable 1,750,000 -0-
----------- -----------
NET CASH FROM INVESTING ACTIVITIES 1,312,156 (86,104)
----------- -----------
NET INCREASE (DECREASE) IN CASH (799,212) (3,559)
CASH, beginning of year 2,575,945 1,118,019
----------- -----------
CASH, end of year $ 1,776,733 $ 1,114,460
=========== ===========
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
COX TECHNOLOGIES, INC AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED OCTOBER 31, 1998
NOTE A - CASH, NOTES PAYABLE AND COMMON STOCK
In June 1998, the Company acquired Vitsab, AB, a Swedish corporation in exchange
for 3,375,734 shares of the Company's unregistered common stock valued at
$843,933 or $0.25 per share and 950,000 shares of the common stock of VITSAB,
USA, Inc., a previously wholly-owned subsidiary of the Company with 4,750,000
issued shares of common stock outstanding and the assumption of certain debt in
the amount of $2,300,000 owed by VITSAB, AB to an unrelated company. The Company
borrowed $1,750,000 from a bank under two notes and security agreements and
liquidated the referenced $2,300,000 debt for the discounted sum of $1,750,000.
The Company has pledged a $1,000.000 certificate of deposit with the lending
bank as collateral for the $1,750,000 borrowed funds. The loans are all due and
payable within one year from June 1998. Under the terms of the notes and
security agreements the Company is obligated to make eleven (11) monthly
payments of $19,258.01 and one (1) final payment of all outstanding principal
and accrued interest due June 17, 1999.
NOTE B - INVENTORY
Inventory at October 31, 1998 and April 30, 1998 consists of the following:
1998
-----------------------------
October 31, April 30,
----------- ---------
Raw materials $ 605,998 $ 364,540
Work-in-progress 346,648 352,096
Finished goods 430,888 324,439
Crude oil 2,456 2,456
---------- ----------
$1,385,990 $1,043,531
========== ==========
NOTE C- INCOME TAXES
The Company and its subsidiaries file consolidated Federal income tax returns
and separate State income tax returns.
NOTE D - COMMITMENTS AND CONTINGENCIES
There have been no changes in the disclosures of commitments, contingencies and
litigation as contained in the Company's annual report Form 10-K for the year
ended April 30, 1998.
8
<PAGE>
FINANCIAL
INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 1998 the Company had a working capital of $3,582,662. This is
decrease of $1,199,584 for the six months period May 1, 1998 to October 31,
1998. This was primarily due to the debt of $1,750,000 incurred to acquire
Visual Indicator Systems, AB of Sweden (Vitsab, AB) in June 1998.
The Company did not incur any long-term debt during this period, however
investment in property and equipment increased significantly by the acquisition
of Vitsab, AB. At present, cash flow from operations is adequate to meet the
cash requirements and commitments of the Company. However, the Company plans to
enter into equity, debt or other financing arrangements to meet its future
financial needs for expansion and:
(a) To provide for general working capital needs including the servicing
of the Vitsab, AB acquisition debt and operations
(b) To repay outstanding liabilities
COMPARISON OF OPERATIONS FOR SECOND FISCAL QUARTER ENDED OCTOBER 31, 1998
AND 1997
Net earnings for the second fiscal quarter ended October 31, 1998 were $256,337
which is a decrease of $43,051 from the $299,388 net earnings for the same
period of 1997. Earnings from operations for 1998 were $110,597, a decrease of
$186,026 from the 1997 second fiscal quarter earnings from operations.
9
<PAGE>
COMPARISON OF OPERATIONS FOR SECOND QUARTER (CONTINUED)
The following schedule reflects the operations of the two industry segments of
the Company for the three months ended October 31, 1998 and 1997.
Three Months Ended October 31,
--------------------------------------------------
1998 1997
----------------------- ------------------------
Temperature Oil Temperature Oil
Recorders Production Recorders Production
--------- ---------- --------- ----------
Sales $2,248,525 $ -0- $2,083,397 $ 3,560
Cost of sales 1,126,863 2,447 985,858 643
General & Administrative 539,233 36,136 403,735 27,154
Sales expense 337,366 -0- 344,509 -0-
Interest 45,653 -0- 8,360 8,258
Depreciation/Amortization 50,230 -0- 10,283 994
---------- -------- ---------- --------
Income (loss) from operations 149,180 (38,583) 330,112 (33,489)
Other Income (expense) (36,321) 222,961 14,776 -0-
---------- -------- ---------- --------
Earnings (loss) -
Before income taxes 112,859 184,378 344,888 (33,489)
Income taxes 27,134 13,766 12,011 -0-
---------- -------- ---------- --------
Net earnings (loss) $ 85,725 $170,612 $ 332,877 $(33,489)
========== ======== ========== ========
TEMPERATURE RECORDERS OPERATIONS
Sales increased $165,128 or 8% in 1998 as compared to the second quarter 1997
operations. Cost of sales was 50.1% for 1998 as compared to 47.3% for 1997. This
was primarily due to costs of the new visual tag indicator operations. General
and Administrative expense increased $135,498 or 6.5% in 1998 over 1997. This
increase was due primarily to R & D expenses pertaining to new products. The
increase in interest expense for 1998 as compared to 1997 resulted from
indebtedness incurred in the acquisition of Vitsab, AB. The increase in
depreciation and amortization of $39,947 was due to the visual tag indicator
operations. Other expense for 1998 was due to a one-time royalty expense of
$48,000 pertaining to new product development.
OIL PRODUCTION OPERATIONS
Loss from operations increased slightly by $5,094 in 1998 as compared to 1997.
This was primarily due to general and administrative expense increases in
professional fees and salaries.
Other income of $222,961 in 1998 was realized from the settlement of
indebtedness at less than the recorded liability.
Net earnings increased $204,101 in 1998 over the net loss of $33,489 in 1997.
10
<PAGE>
COMPARISON OF OPERATIONS FOR SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997
There was a consolidated net earnings of $429,606 for the period ended October
31, 1998, as compared to a net earnings of $585,655 for the same period ended
October 31, 1997. To afford better analysis and comparison of the similar
periods of 1998 and 1997, the following schedule segregates the operations by
industry segments of the oil production operations and the temperature recorder
operations.
<TABLE>
<CAPTION>
INDUSTRY SEGMENT Oil Production Temp.Record Oil Production Temp Record
-------------- ----------- -------------- -----------
May 1- May 1- May 1- May 1-
PERIOD Oct. 31, 1998 Oct. 31, 1998 Oct. 31,1997 Oct. 31,1997
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE:
Sales $ -0- $4,621,388 $ 17,734 $4,226,578
COST AND EXPENSES:
Cost of sales 3,286 2,304,250 7,893 1,984,613
General & administrative expenses 67,199 1,119,253 62,465 882,496
Sales expense -0- 710,113 -0- 625,087
Interest expense 9,857 67,663 16,516 18,390
Depreciation & depletion -0- 75,322 1,988 20,060
-------- ---------- --------- ----------
INCOME (LOSS) FROM OPERATIONS (80,342) 344,787 (71,128) 695,932
OTHER INCOME (expense): 238,704 (32,643) (31,919) 31,171
-------- ---------- --------- ----------
Earnings (loss) before income
taxes 158,362 312,144 (103,047) 727,103
Provisions for income taxes 13,766 27,134 1,155 37,246
-------- ---------- --------- ----------
NET EARNINGS (LOSS) $144,596 $ 285,010 $(104,202) $ 689,857
======== ========== ========= ==========
</TABLE>
TEMPERATURE RECORDER OPERATIONS
Net earnings decreased $404,847 for the six months of 1998 as compared to 1997.
The decrease was primarily due to the visual indicator tag operations including
R & D expenses.
Sales increased $394,810 or 8% in 1998 over the 1997 period. Cost of sales as a
percent of sales was 24.2% for 1998 and 20.8% for 1997. Sales expense, as a
percent of sales was 15.4% for 1998 and 14.4% for 1997. Interest, depreciation
and depletion were 31.1% of sales for 1998 and 1.0% for 1997. In the aggregate,
the percentage increases in all categories of costs and expenses for 1998 over
1997 amounted to 9.5%of sales or $439,031. This increase was primarily due to
visual indicator tag and other new product development costs and expenses.
Other expense of $32,643 for 1998 was due primarily to a one-time royalty
expense of $48,000 pertaining to new product development as compared to a
$31,171 other income in 1997 from interest earnings.
11
<PAGE>
COMPARISON OF OPERATIONS FOR SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997
(CONTINUED)
OIL PRODUCTION OPERATIONS
There was a decrease of $17,734 in crude oil sales for 1998 as compared to 1997.
This was the result of restricted production due to declining oil prices. The
Company has now restored production and the last six months of the fiscal year
should show marked improvement. The loss from operations increased by $9,214 for
1998 over 1997. Other income of $238,704 for 1998 was primarily due to income
realized from the settlement of indebtedness at less than the recorded
liability. Overall net earnings improved by $248,798 for 1998 over the net loss
of $104,202 for 1997.
YEAR 2000 DISCLOSURE
1. COMPANY'S STATE OF READINESS
Management began addressing the Company's Year 2000 issues over two years ago,
at which time it was determined the accounting software was not Year 2000
compliant. New software was purchased and installed. The Company obtained a
written statement from the software vendor who attested to the Year 2000
readiness of this software. To accommodate this new software the Company updated
its network software with Novell 4.0 to interact with the accounting software in
a manner that will not interfere with its Year 2000 readiness. Management has
also reviewed all electronically based product software programs sourced from
third party vendors and have determined that they are all Year 2000 compliant.
The Company has mailed questionnaire forms to all its mission critical
vendor/suppliers of parts for its assembly line. There has been a 90% return of
these informational requests. Concurrently, the Company is qualifying alternate
vendor/suppliers for potential replacement for any non-responsive and/or
non-compliant vendors. Management expects the process of obtaining 100%
assurance of present vendors compliance or alternate Year 2000 compliance
vendors to be completed by June 1999.
2. COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES
The Company has expended approximately $15,000 to date in addressing its Year
2000 readiness. By management analysis, the future outlay for addressing any
perceived Year 2000 issues will not exceed $25,000 including assembly line parts
and supplies under its contingency plan.
3. RISKS OF THE COMPANY'S YEAR 2000 ISSUES
Management's analysis of its Year 2000 readiness indicate that there are no Year
2000 issues that will have a material effect on its business, results of
operations or financial condition.
This opinion is based upon the fact that the Company's accounting readiness is
now complete and all of the vendors of parts and supplies critical to its
operations have acknowledged Year 2000 readiness and compliance
12
<PAGE>
4. COMPANY'S CONTINGENCY PLANS
If management's analysis of its third party vendor capability is not achieved by
the June 1999 date, a contingency plan has been developed which provides for
stockpiling of assembly line parts and continuing new vendor sourcing of Year
2000 compliance vendors.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the annual report Form 10-K of the Company for the year
ended April 30, 1998, relative to legal proceedings and litigation. No charges
or determinations have occurred on such proceedings during the quarter covered
by this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) There were no Form 8-K's filed by the Company during the quarter
ended October 31, 1998.
13
<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.
COX TECHNOLOGIES, INC
Date January __, 1999 /s/ James L Cox
-----------------------------------------
James L Cox, President and Chairman
Date January __, 1999 /s/ Robert W. Dupree
-----------------------------------------
Robert W. Dupree, Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE QUARTER ENDED OCTOBER 31, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1998
<EXCHANGE-RATE> 1
<CASH> 1,776,733
<SECURITIES> 62,100
<RECEIVABLES> 1,889,262
<ALLOWANCES> 29,527
<INVENTORY> 1,385,990
<CURRENT-ASSETS> 5,219,348
<PP&E> 6,413,277
<DEPRECIATION> 2,995,313
<TOTAL-ASSETS> 12,512,947
<CURRENT-LIABILITIES> 1,636,686
<BONDS> 0
0
0
<COMMON> 20,885,495
<OTHER-SE> (10,865,745)
<TOTAL-LIABILITY-AND-EQUITY> 12,512,947
<SALES> 4,621,388
<TOTAL-REVENUES> 4,621,388
<CGS> 2,307,536
<TOTAL-COSTS> 4,356,943
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,520
<INCOME-PRETAX> 470,506
<INCOME-TAX> 40,900
<INCOME-CONTINUING> 264,445
<DISCONTINUED> 0
<EXTRAORDINARY> 206,061
<CHANGES> 0
<NET-INCOME> 429,606
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
