<PAGE>
U.S. 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 SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission file number 0-12471
COLORADO MEDTECH, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0731006
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6175 LONGBOW DRIVE, BOULDER, COLORADO 80301
(Address of principal executive offices)
(303) 530-2660
(Issuer's telephone number)
Check whether the issuer (1) has 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 report(s),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
As of April 30, 1996, the Company had 6,901,762 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (Check One):
Yes No X
--- ---
<PAGE>
COLORADO MEDTECH, INC.
FORM 10-QSB
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Financial Statements:
Consolidated Balance Sheet -
March 31, 1996 3
Consolidated Statements of Operations -
Three and nine months ended
March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows -
For the nine months ended
March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition
and Results of Operations 9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
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<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COLORADO MEDTECH, INC.
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
(UNAUDITED)
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,156,666
Accounts receivable, net 3,787,844
Inventories, net 1,523,399
Deferred income taxes and
other assets 846,419
-----------
Total current assets 11,314,328
-----------
EQUIPMENT AND FURNITURE, net 322,799
-----------
LAND, DEFERRED INCOME TAXES
AND OTHER ASSETS 659,327
-----------
TOTAL ASSETS $12,296,454
-----------
-----------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
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<PAGE>
COLORADO MEDTECH, INC.
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS OF MARCH 31, 1996
(UNAUDITED)
LIABILITIES AND
SHAREHOLDERS' EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable $ 1,575,819
Accrued salaries and wages 921,173
Accrued product service costs 461,738
Customer deposits 2,172,858
Other accrued expenses 1,190,687
-----------
Total current liabilities 6,322,275
-----------
SHAREHOLDERS' EQUITY:
Common stock 3,713,653
Retained earnings 2,260,526
-----------
Total shareholders' equity 5,974,179
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,296,454
-----------
-----------
</TABLE>
The accompanying notes are an integral part of this balance sheet.
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<PAGE>
COLORADO MEDTECH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
----------------------- -------------------------
1996 1995 1996 1995
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
SALES AND SERVICES $4,811,897 $5,452,478 $13,962,354 $14,368,738
COST OF SALES AND SERVICES 3,056,605 3,598,274 9,034,547 9,366,502
---------- ---------- ----------- -----------
GROSS PROFIT 1,755,292 1,854,204 4,927,807 5,002,236
---------- ---------- ----------- -----------
COSTS AND EXPENSES:
Marketing and selling 267,283 483,448 747,514 1,266,327
Operating, general and administrative 873,847 937,191 2,884,121 2,567,334
Research and development 42,027 19,697 60,264 47,084
---------- ---------- ----------- -----------
Total operating expenses 1,183,157 1,440,336 3,691,899 3,880,745
---------- ---------- ----------- -----------
EARNINGS FROM OPERATIONS 572,135 413,868 1,235,908 1,121,491
OTHER INCOME, net 21,344 25,565 307,809 29,613
---------- ---------- ----------- -----------
EARNINGS BEFORE INCOME TAXES 593,479 439,433 1,543,717 1,151,104
Provision for income taxes 217,000 162,000 523,000 426,000
---------- ---------- ----------- -----------
NET INCOME $ 376,479 $ 277,433 $ 1,020,717 $ 725,104
---------- ---------- ----------- -----------
NET INCOME PER COMMON
AND COMMON EQUIVALENT
SHARE:
Primary $ .05 $ .04 $ .14 $ .10
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
Fully Diluted $ .05 $ .04 $ .13 $ .10
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Primary 8,139,051 6,904,383 7,469,671 6,950,626
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
Fully Diluted 8,202,709 6,904,383 8,132,332 6,950,626
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
COLORADO MEDTECH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $1,020,717 $ 725,104
Adjustment to reconcile net income
to net cash flows from
operating activities-
Depreciation and amortization 308,925 307,237
Gain on sale of product line (121,986) --
Change in assets and liabilities-
Accounts receivable, net (716,029) (332,119)
Inventories, net (601,662) (94,030)
Prepaid and other assets 17,781 88,973
Accounts payable and accrued expenses (19,914) 99,778
Customer deposits 378,371 303,444
---------- ----------
Net cash flows from operating activities 266,203 1,098,387
---------- ----------
INVESTING ACTIVITIES:
Proceeds from sale of product line 250,000 --
Acquisition of equipment and furniture (96,596) (360,611)
---------- ----------
Net cash flows from investing activities 153,404 (360,611)
---------- ----------
FINANCING ACTIVITIES:
Repayment of notes -- (896,893)
---------- ----------
Net cash flows from financing activities -- (896,893)
---------- ----------
Net change in cash and cash equivalents 419,607 (159,117)
Cash and cash equivalents, beginning 4,737,059 3,727,260
---------- ----------
Cash and cash equivalents, ending $5,156,666 $3,568,143
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
COLORADO MEDTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The financial information is unaudited and should be read in conjunction with
the consolidated financial statements filed with Form 10-KSB on September 28,
1995. The accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in the Company's
annual consolidated financial statements filed with the Form 10-KSB, except
as modified for interim accounting policies which are within the guidelines
set forth in Accounting Principles Board Opinion No. 28. Certain amounts
have been reclassified in the prior year financial statements to be
consistent with the current year presentation.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
Company's financial position as of March 31, 1996, the results of its
operations for the three and nine-month periods ended March 31, 1996 and 1995
and its cash flows for the nine-month periods ended March 31, 1996 and 1995.
All of the adjustments were of a normal and recurring nature.
The following sets forth the supplemental disclosures of cash flow
information for the nine-month periods ended March 31, 1996 and 1995,
respectively:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Cash paid for interest $ 48,349 $ 58,743
Cash paid for income taxes $605,000 $550,000
</TABLE>
NOTE 2 - DEBT
On October 30, 1995, the Company renewed a financing arrangement with a bank
that provides for a $3 million revolving line of credit at prime plus 1/2%
which matures October 31, 1996. This credit facility is secured by all
accounts, general intangibles, inventory and equipment. The agreement
contains various restrictive covenants which include, among others,
maintenance of certain financial ratios, maintenance of a minimum tangible
net worth and limitations on annual investments, dividends and capital
expenditures. The Company has not utilized this credit facility in fiscal
1996.
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<PAGE>
NOTE 3 - SALE OF PRODUCT LINE
In June 1995, the Company entered into an agreement to sell its cardiopulmonary
product lines to a competitor (the "Purchaser"). The transaction closed on
August 16, 1995. The sale included all inventories, intangible property rights,
customer lists, and tooling associated with the cardiopulmonary product lines as
well as the trade name Cybermedic. In addition, the Purchaser assumed the
warranty and service obligations related to these products. The Purchaser has
placed noncancellable orders with the Company for additional manufactured units.
The gain on this transaction of approximately $122,000 has been classified as
other income in the accompanying consolidated statements of operations.
NOTE 4 - STOCK OPTIONS
During the quarter ended December 31, 1995, the Company issued 153,000 and
authorized 500,000 incentive stock options to certain employees, including two
officers of the Company. The 500,000 incentive stock options were ratified in
February 1996 by the Board of Directors. In February 1996, the Company issued
another 75,000 incentive stock options to an officer of the Company. The
options to purchase the Company's common stock were issued at exercise prices
ranging from $1.72 to $2.38 per share, which were the fair market values of the
Company's common stock on the dates of grant. The options are exercisable for
five years from the date of grant or five years from the date the options vest,
depending upon the individual option agreements.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
As an aid to understanding the Company's operating results, the following table
indicates the percentage relationships of income and expense items to total
revenue for the line items included in the Consolidated Statements of Operations
for the three and nine-month periods ended March 31, 1996 and 1995, and the
percentage change in those items for the three and nine-month periods ended
March 31, 1996, from the comparable periods in 1995.
<TABLE>
<CAPTION>
PERCENTAGE CHANGE FROM
AS A PERCENTAGE OF TOTAL REVENUES PRIOR YEAR'S COMPARABLE PERIOD
----------------------------------------- ----------------------------------------
THREE-MONTH PERIOD NINE-MONTH PERIOD THREE-MONTH PERIOD NINE-MONTH PERIOD
ENDED MARCH 31, ENDED MARCH 31, ENDED MARCH 31, ENDED MARCH 31,
------------------ ----------------- ------------------ -----------------
1996 1995 1996 1995 LINE ITEMS 1996 1996
---- ---- ---- ---- ---------- ---- ----
% % % % % %
<S> <C> <C> <C> <C> <C> <C>
100.0 100.0 100.0 100.0 Sales and Service (11.7) (2.8)
63.5 66.0 64.7 65.2 Cost of Sales and Services (15.1) (3.5)
----- ----- ----- ----- ----- -----
36.5 34.0 35.3 34.8 Gross Profit (5.3) (1.5)
----- ----- ----- ----- ----- -----
5.5 8.9 5.3 8.8 Marketing and Selling (44.7) (41.0)
18.2 17.2 20.7 17.9 Operating, Gen'l and Admin (6.8) 12.3
.9 .3 .4 .3 Research and Development 113.4 28.0
----- ----- ----- ----- ----- -----
24.6 26.4 26.4 27.0 Total Operating Expenses (17.9) (4.9)
----- ----- ----- ----- ----- -----
11.9 7.6 8.9 7.8 Earnings from Operations 38.2 10.2
.4 .5 2.2 .2 Other Income, Net (16.5) 939.4
----- ----- ----- ----- ----- -----
12.3 8.1 11.1 8.0 Earnings Before Income Taxes 35.1 34.1
4.5 3.0 3.8 3.0 Provision for Income Taxes 34.0 22.8
----- ----- ----- ----- ----- -----
7.8 5.1 7.3 5.0 NET INCOME 35.7 40.8
----- ----- ----- ----- ----- -----
</TABLE>
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<PAGE>
RESULTS OF OPERATIONS
The Company reported net income of $376,479 and $1,020,717 for the three and
nine-month periods ended March 31, 1996, as compared to $277,433 and $725,104
for the same periods in the prior year. Earnings per share for the three and
nine-months ended March 31, 1996 were $.05 and $.13 calculated on 8,202,709 and
8,132,332 fully diluted weighted average common shares and equivalent shares
outstanding compared to $.04 and $.10 for the same periods in the prior year
calculated on 6,904,383 and 6,950,626 fully diluted weighted average common
shares and equivalent shares outstanding. Net income for the nine-months ended
March 31, 1996 included approximately $122,000 of gain from the sale of the
cardiopulmonary product lines in August 1995. The Company had net operating
losses available to offset the tax impact of this gain, which reduced the
Company's effective tax rate.
Revenues decreased to $4,811,897, or by 12%, and to $13,962,354, or by 3% for
the three and nine-month periods ended March 31, 1996, as compared to the same
periods in the prior year. The reduction in sales is attributable to the
disposition of the cardiopulmonary product lines sold in August 1995. As of
March 31, 1996, the Company's backlog was approximately $10 million compared to
$7.5 million as of March 31, 1995.
Gross margins increased to 36% and 35% from 34% and 35% for the three and nine-
month periods ended March 31, 1996, respectively, compared to the same periods
in 1995. The improvement in the Company's margins is a result of the shifting
composition of the Company's revenues between service and products, and reduced
warranty expenses associated with manufactured products.
Marketing and selling expenses decreased 45% and 41% for the three and nine-
month periods ended March 31, 1996, as compared to the same periods in the prior
year. Marketing and selling expenses as a percentage of total revenues were
approximately 5% for the three and nine-month periods ended March 31, 1996
compared to approximately 9% for the same periods in the prior year. During the
quarter ended September 30, 1995, the Company reduced its direct sales staff as
a result of the cardiopulmonary product lines sold in August 1995. Management
believes that the Company can continue to market and sell its remaining product
lines with a reduced direct sales staff.
Operating, general and administrative expenses decreased 7% and increased 12%
for the three and nine-month periods ended March 31, 1996, respectively, as
compared to the same periods in the prior year. As a percentage of revenues,
operating, general and administrative expenses were 18% and 21% of revenues for
the three and nine-month periods ended March 31, 1996, respectively, as compared
to 17% and 18% for the same periods in the prior year. The decrease in expenses
is largely attributable to cost reductions which were implemented during the
quarter ended March 31, 1996. The increase over the nine-month period in
operating, general and administrative expenses is due to reclassifications of
certain sales and marketing personnel.
Research and development expenses increased by $22,330 (113%) and $13,180 (28%)
for the three and nine-month periods ended March 31, 1996. The increase is a
result of the Company's greater emphasis on developing proprietary products.
Research and development expenses are attributable to the respiratory product
lines and range between 8-10% of revenues for those product lines. Consistent
with the Company's operating plans, the Company continues to pursue the
acquisition or development of new or improved technology or products. Should
the Company identify any such opportunities, the amount of future research and
development expenditures may increase.
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<PAGE>
In addition to the gain from the sale of the cardiopulmonary product lines,
other income reflects the interest income earned from temporary investments of
the Company's cash. The Company retired all of its debt in September, 1994,
thus reducing interest expense.
FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity have consisted of cash flow from
operations and cash deposits received from customers related to contracts.
Historically, the Company has also utilized proceeds from debt borrowings and
the cash proceeds from private placements of common stock to supplement its cash
resources.
The Company renewed its bank financing arrangement during October of 1995 that
provides for a $3 million revolving line of credit at prime plus 1/2% which
matures October 31, 1996. This credit facility is secured by all accounts,
general intangibles, inventory and equipment of the Company. The agreement
contains various restrictive covenants which include, among others, maintenance
of certain financial ratios, maintenance of a minimum tangible net worth and
limitations on annual investments, dividends and capital expenditures. No
amounts have been advanced under this credit facility as of March 31, 1996.
In June 1994, the Company completed the private placement of 1,500,000 units,
each unit consisting of one share of no par common stock and two warrants. The
units were offered at the greater of $1.00 or 75% of the average of the closing
bid and ask price of the common stock for the five days prior to subscription.
The warrants are callable by the Company, and expire after five years. In
accordance with the private placement memorandum, 1,500,000 of the warrants were
priced at 125% of the average of the closing bid and ask price of the common
stock on the date of purchase of the units, and an additional 1,500,000 warrants
were issued with an exercise price equal to 175% of the average of the closing
bid and ask price of the common stock on the date of purchase of the units. The
exercise prices of the warrants range from $1.41 to $2.68. The proceeds from
this offering were approximately $1.5 million.
The ratio of current assets to current liabilities was 1.8 to 1 at March 31,
1996, compared to 1.6 to 1 at June 30, 1995. The Company's working capital
increased approximately $1,252,000 since June 30, 1995. The average number of
days outstanding of the Company's accounts receivable at March 31, 1996 was
approximately 67 days, compared to 54 days at June 30, 1995.
Cash provided by operations during the nine month period ended March 31, 1996
was $266,000 and decreased approximately $832,000 compared to the same period in
1995, as a result of the increase in the average number of days outstanding of
the Company's accounts receivable and an increase in the amount of inventory
carried to support the backlog of orders at March 31, 1996.
During the nine month period ended March 31, 1996, the Company acquired
approximately $97,000 of property and equipment consisting principally of
computer equipment. The Company has no present material commitments for capital
expenditures.
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<PAGE>
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 10.1 Extension of Employment Agreement dated November 16,
1995, by and among John V. Atanasoff, II and Colorado
MEDtech, Inc., with exhibits, which was approved by
the Company's Board of Directors on February 16, 1996.
(b) Reports on Form 8-K:
None.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Colorado MEDtech, Inc.
-------------------------------------
(Registrant)
DATE: May 13, 1996
/s/ John V. Atanasoff II
-------------------------------------
John V. Atanasoff II
Chief Executive Officer
DATE: May 13, 1996
/s/ Bruce L. Arfmann
-------------------------------------
Bruce L. Arfmann
Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------- ----------
10.1 Extension of Employment Agreement between
Colorado MEDtech, Inc. and John V. Atanasoff, II,
dated November 16, 1995, which was approved
by the Company's Board of Directors on February 16, 1996.
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<PAGE>
EXHIBIT 10.1
EXTENSION OF EMPLOYMENT AGREEMENT
This Extension of Employment Agreement (hereinafter referred to as the
"Extension") is made and entered into as of this 16th day of November, 1995,
by and between John V. Atanasoff, II (hereinafter referred to as "Executive")
and COLORADO MEDTECH, INC., a Colorado corporation (hereinafter referred to
as "Employer").
WHEREAS, Executive and Employer are parties to an Employment Agreement
dated June 21, 1993 (the "Employment Agreement"); and
WHEREAS, the parties desire to extend such Agreement and modify the
terms thereof, but only to the extent specifically hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The expiration of the term of the Employment Agreement shall be
extended from June 21, 1996 to June 21, 2000.
2. The compensation for the Executive, as identified in Schedule B,
attached hereto, shall become effective as of June 21, 1995.
3. Other than as expressly modified herein, the terms and conditions of
the Employment Agreement and the Non-Competition Agreement dated June 21,
1993 among Employer, Employer's subsidiary, RELA, Inc., and Employee, shall
continue in effect through and including June 21, 2000.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first above written.
COLORADO MEDTECH, INC.
By: /s/ CLIFFORD W. MEZEY
--------------------------------------
Chairman of the Compensation Committee
JOHN V. ATANASOFF, II
--------------------------------------
John V. Atanasoff, II
-1-
<PAGE>
SCHEDULE E
ADDITIONAL BENEFITS
Executive's compensation shall continue to be $140,000 per annum.
Effective on execution of the Extension of Employment Agreement attached
hereto, the Executive shall be awarded a tax qualified incentive stock option
to purchase up to 500,000 shares of Employer's unregistered common stock,
pursuant to a Stock Option Agreement containing the following terms and
conditions:
The option shall vest according to the following schedule:
100,000 shares on June 21, 1997;
100,000 shares on June 21, 1998;
100,000 shares on June 21, 1999; and
on September 30, 2000:
(i) 100,000 shares if the average of the bid and ask prices for
Employer's Common Stock (or last trade price if the stock
qualifies as a National Market System stock) as of the
close of business on that date (or, if that date is a
weekend or holiday, the last trading date prior to that
date) is $6.00 or greater (with price adjustments for stock
splits, stock dividends, reorganizations, and similar
events) (the "Price"); or
(ii) 150,000 shares if the Price is $7.00 or greater; or
(iii) 200,000 shares if the Price is $8.00 or greater;
PROVIDED, THAT:
(i) If Employer terminates Executive's employment at any time
prior to June 21, 2000, no vesting shall occur after the date of termination;
and
(ii) If Executive terminates his employment at any time prior to
June 21, 1999, no further vesting shall occur, and any vested portion of the
option shall be unexercisable.
Except as provided above, each vested portion of the option shall be
exercisable for five (5) years after the date such portion has vested.
The exercise price for the option shall be the average of the bid and ask
prices for Employer's Common Stock as of the close of business on November
16, 1995.
-2-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 5,156,666
<SECURITIES> 0
<RECEIVABLES> 3,787,844
<ALLOWANCES> 0
<INVENTORY> 1,523,399
<CURRENT-ASSETS> 11,314,328
<PP&E> 322,799
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,296,454
<CURRENT-LIABILITIES> 6,322,275
<BONDS> 0
0
0
<COMMON> 3,713,653
<OTHER-SE> 2,260,526
<TOTAL-LIABILITY-AND-EQUITY> 12,296,454
<SALES> 13,962,354
<TOTAL-REVENUES> 13,962,354
<CGS> 9,034,547
<TOTAL-COSTS> 3,691,899
<OTHER-EXPENSES> (307,809)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,534,717
<INCOME-TAX> 523,000
<INCOME-CONTINUING> 1,020,717
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,020,717
<EPS-PRIMARY> .14
<EPS-DILUTED> .13
</TABLE>
