THIS DOCUMENT IS A COPY OF THE 10-Q FOR THE PERIOD ENDING
SEPTEMBER 30, 1995 FILED ON NOVEMBER 14, 1995 PURSUANT TO A RULE
201 TEMPORARY HARDSHIP EXEMPTION.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1995
Commission File Number 0-12516
Dynamic Healthcare Technologies, Inc.
(Exact name of registrant as specified in its charter)
Nebraska 47-0643468
(State of Incorporation) (IRS E.I.N.)
101 Southhall Lane, Suite 210, Maitland, Florida 32751
(407)875-9991
(Registrant's telephone number, including area code)
Indicate by checkmark 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
Indicate by checkmark whether the registrant has filed all
documents and reports required to be filed by Section 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
As of November 8, 1995, there were 6,589,071 shares outstanding,
par value $.01 per share, of the issuer's only class of
common stock.
This report consists of (15) fifteen pages.
The index to exhibits appears on page (14) fourteen.
PAGE 2
PART 1. FINANCIAL INFORMATION
Item 1.Financial Statements
See attached statements following this item number.
Page 3
<PAGE>
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Condensed Balance Sheets
<TABLE>
<CAPTION
September 30, December 31,
<S> <C> <C>
1995 1994
(Unaudited) (Restated)
ASSETS
Current assets:
Cash and cash equivalents $ 408,386 $ 10,173
Accounts receivable, net of
allowance for doubtful
accounts of $150,000 at
September 30, 1995, and
$250,000 at December 31,1994 1,717,868 2,166,813
Unbilled receivables 413,827 528,372
Other current assets 89,710 199,651
Total current assets 2,629,791 2,905,009
Property, equipment and
leasehold improvements,
net of accumulated
depreciation of $1,735,371
at September 30, 1995, and
$1,939,978 at December 31, 1994 1,112,794 1,212,969
Capitalized software
development costs, net of
accumulated amortization of
$1,689,054 at September 30,
1995, and $1,273,095 at
December 31, 1994 2,018,388 1,821,917
Goodwill, net of accumulated
amortization of $170,806 at
September 30, 1995, and
$54,787 at December 31, 1994 912,031 1,028,050
Other assets 64,134 32,171
$6,737,138 $7,000,116
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Borrowings under line of credit $ 500,000 $2,788,401
Accounts payable and accrued
expenses 757,013 1,182,450
Deferred revenue 948,588 1,452,895
Advanced billings 232,529 351,835
Total current liabilities 2,438,130 5,775,581
Long-term debt 3,733,349 722,569
Total liabilities 6,171,479 6,498,150
Common stock, $0.01 par value;
authorized 20,000,000 shares,
issued and outstanding
6,589,071 shares at September
30, 1995, and 5,967,815 shares
at December 31, 1994 65,891 59,678
Additional paid-in capital 9,493,901 8,879,296
Deficit (8,994,133) (8,437,008)
Total shareholders' equity 565,659 501,966
$6,737,138 $7,000,116
</TABLE>
See notes to condensed financial statements
Page 3<PAGE>
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Condensed Statements of Operations
(Unaudited)
<TABLE>
Three Months Nine Months
Ended Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1995 1994 1995 1994
Operating revenues
Computer system
equipment sales and
support $ 129,056 $ 375,281 $ 871,498 $1,619,789
Application software
licenses 690,535 474,246 2,237,437 1,648,800
Software support and
maintenance 1,393,805 826,165 3,605,951 2,062,284
Total operating
revenues 2,213,396 1,675,692 6,714,886 5,330,873
Operating expenses
Cost of equipment
sold 96,480 360,643 755,419 1,349,998
Client services
expense 714,842 616,113 2,079,725 1,549,965
Software development
costs 336,404 309,900 1,251,526 1,161,662
Sales and marketing
costs 336,748 469,422 1,454,380 1,404,552
Joint marketing
costs 45,816 -- 45,816 22,487
General and
administrative
expense 431,460 625,681 1,379,047 1,420,082
Total operating
expenses 1,961,750 2,381,759 6,965,913 6,908,746
Operating income
(loss) 251,646 (706,067) (251,027) (1,577,873)
Other income (expense)
Interest expense
and financing costs (106,580) (30,866) (274,203) (53,473)
Gain/(Loss) on
sale of fixed
assets (7,773) -- (54,509) --
Miscellaneous (4,526) -- 22,614 --
Total other income
(expense) (103,333) (30,866) (306,098) (53,473)
Net earnings (loss)
before income taxes 148,313 (736,933) (557,125)(1,631,346)
Income taxes -
current -- -- -- --
Net earnings
(loss) $ 148,313 $ (736,933) $(557,125) $(1,631,346)
Net earnings
(loss) per share $ .02 $ (.13) $ (.09) $ (.30)
Weighted average
number of common
and equivalent
shares
outstanding 6,589,071 5,586,329 6,394,085 5,394,264
</TABLE>
See notes to condensed financial statements.
Page 4<PAGE>
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Condensed Statements of Cash Flows
<TABLE>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (557,125) $(1,631,346)
Adjustment to reconcile net earnings
(loss) to net cash provided by
operating activities:
Depreciation and amortization 797,084 667,191
Book value of property disposed of 110,402 --
Changes in assets and liabilities:
Cash - restricted -- (157,817)
Accounts receivable 448,945 (522,056)
Unbilled receivable 114,545 1,330,868
Other current assets 109,941 13,133
Accounts payable and accrued
expenses (425,437) (535,582)
Deferred revenues (504,307) (567,044)
Advance billings (119,306) 79,599
Other assets (31,963) 11,578
Total adjustments 499,904 319,870
Net cash provided (used) by operating
activities (57,221) (1,311,476)
Cash flows from investing activities:
Capitalized software development
costs (612,430) (560,378)
Purchases of property and equipment (275,333) (278,684)
Net cash used in investing
activities (887,763) (839,062)
Cash flows from financing activities:
Proceeds from line of credit 611,599 519,699
Proceeds from subordinated
convertible notes payable 775,000 --
Proceeds/(repayment) of long
term debt (54,220) 428,837
Proceeds from issuance of
common stock -- 101,860
Proceeds from incentive stock
option exercises 10,818 --
Net cash flows provided by
financing activities 1,343,197 1,050,396
Net increase (decrease) in cash
and cash equivalents 398,213 (1,100,142)
Cash and cash equivalents,
beginning of period 10,173 1,100,142
Cash and cash equivalents, end
of period $ 408,386 --
</TABLE>
See notes to condensed financial statements.
Page 5<PAGE>
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(A) Unaudited Financial Statements:
The accompanying unaudited Condensed Balance Sheet as of
September 30, 1995, Condensed Statements of Operations for
the three and nine month periods ended September 30, 1995 and
1994, and Condensed Statements of Cash Flows for the nine
month periods ended September 30, 1995 and 1994, have been
prepared by management in conformity with generally
accepted accounting principles for interim financial statements
and with instructions to Form 10-Q and Regulation S-X.
Accordingly, they do not include all the disclosures required by
generally accepted accounting principles for complete financial
statements. All adjustments and accruals considered necessary
for fair presentation of financial information have been
included in the opinion of management. Operating results for the
three and nine month periods ended September 30, 1995, are
not necessarily indicative of the operating results which may be
expected for the year ending December 31, 1995.
(B) Reporting Entity:
On January 1, 1995 the Company's wholly owned subsidiary Dynamic
Healthcare Technologies, Inc. was merged with and into the
Company. The Company then on June 13, 1995 formally adopted
Dynamic Healthcare Technologies, Inc. as its name.
(C) Reclassification:
Certain reclassifications have been made to the 1994 financial
statements to conform to classifications used in 1995.
(D) Subordinated Convertible Notes Payable:
As of September 30, 1995 the Company issued $775,000 of
Subordinated Convertible Notes Payable (the "Notes"), in
connection with a private placement transaction. The Notes bear
interest at 9% percent per annum, are payable in full together
with accrued interest on the earlier of (I) June 30, 1996,
or(ii)on the date ten days after the closing date of a debt or
equity financing by the Company resulting in gross proceeds to the Company of
no less than $1,000,000, or (iii) on the expiration date of rights issued
in connection with a rights offering by the Company as defined.
As additional consideration to the Noteholders, detachable warrants to
purchase fully paid and nonassessable voting Common Shares of the Company
at $1.00
per share, exercisable for a period of five years from the date
of the Notes were also provided. For each $25,000 in Note
principal warrants to purchase 5,000 Common Shares were issued.
In lieu of receiving funds, on November 10, 1995 the
Subordinated Convertible Noteholders agree to convert all of the
$775,000 of Subordinated Convertible Notes into 968,750
shares of the Company's Series A Preferred Stock $.01 par value.
Such conversion shall occur automatically upon the filing of
a designation amending and restating the terms of the Series A
Preferred Stock with the Secretary of State of the State of
Nebraska (the "Designation"). The Designation shall be filed by
the Company prior to November 30, 1995. The Notes have been included as
long term debt in the September 30, 1995 Balance
Sheet.
(E) Financing and Subsequent Events
Principally as a result of the restated financial statements for
the years ended December 31, 1992 and 1993, and the three
quarters ended September 30, 1994, the Company was in technical
default under the terms of the Revolving Credit and Security
Agreement with First Union National Bank (the "Line of Credit").
The financial covenants under the Line of Credit required
tangible net worth of not less than $2,355,000 on December 31, 1994, and
require the ratio of total liabilities to tangible net worth, as of any
quarter end during the term of the loan, to be no more than two to one.
On January 10, 1995, the Bank provided the Company a waiver of default to
the specific conditions existing on December 31, 1994.
Page 6<PAGE>
On March 20, 1995, the Company and the Bank entered into a letter
agreement whereby the terms of payment under the Revolving Credit
and Security Agreement will be modified to reflect a maturity
date of April 30, 1996 in lieu of the current demand provision,
subject to: (1) the closing and funding of a $1,000,000 equity or
debt injection, subordinated to the Bank debt and on terms and
conditions acceptable to the Bank, of existing financial
covenants based upon Company-prepared projections of financial
condition deemed reasonable by the Bank and tested on a quarterly
basis.
On September 28, 1995 the Company accepted a Letter of Intent
from an institutional investor for the proposed purchase of
2,812,500 shares of Series B Preferred Stock of the Company for
$2,250,000. Pursuant to the Letter of Intent, the Company's
Board authorized a new class of Nine Percent (9%) Cumulative
Convertible Series B Preferred Stock ("Series B Preferred
Stock") to be placed with the institutional investor. The Series
B Preferred Stock is intended to have substantially the same
terms as the Nine Percent (9%) Cumulative Convertible Series A
Preferred Stock ("Series A Preferred Stock").
On October 20, 1995 the Company accepted a Loan Commitment from
First Union National Bank of Florida ("the Bank"). The loan
commitment enables the Company to refinance its current
demand line of credit to a Term Note, payable in equal
monthly payments of accrued interest and principle due using a 17
1/2 year amortization schedule upon a minimum principal
payment of $500,000 from the sale of $2,250,000 of Preferred
Stock. The Term Note would mature on March 30, 1998. As
a result of the Company's intent to refinance the Line of Credit
as a Term Note, $2,900,000 of the Line of Credit has been
included in long term debt in the September 30, 1995 Balance
Sheet.
On November 10, 1995 the Subordinated Convertible Noteholders
agreed to convert all of the $775,000 of Subordinated
Convertible Notes into 968,750 shares of the Company's Series A
Preferred Stock $.01 par value. The following table shows
the capitalization of the Company as of September 30, 1995 as
reported and on a pro forma basis to reflect the conversion of
the Subordinated Convertible Notes to Series A Preferred Stock of
the Company, as if it had occurred on September 30, 1995.
<TABLE>
<S> <C> <C>
September 30, September 30,
1995 1995
(In thousands) (In thousands)
As Reported Pro Forma
Long-Term Debt $ 3,733 $ 2,958
Shareholders' Equity:
Series A preferred stock - 10
Common stock 66 66
Additional paid-in capital 9,494 10,259
Deficit (8,994) (8,994)
Total shareholders' equity 566 1,341
Total Capitalization $ 4,299 $ 4,299
</TABLE>
(F) Restatements:
During the fourth quarter of 1994, the Company recorded
adjustments to prior interim periods which expensed $273,297 of
previously capitalized software development costs and $68,525 of
underaccrued employee benefits. Both adjustments stem
from correction of errors originating in the first two quarters
of 1994, the effects of which are summarized as follows (in
thousands, except per share data):
Page 7
<TABLE>
Three Months Ended
(Unaudited)
<S> <C> <C>
1994 March 31 June 30
Operating Income (Loss) $(192) $(150)
Net Earnings (Loss) (192) (150)
Net Earnings (Loss Per Share) (.04) (.03)
</TABLE>
Operating results as restated where applicable, are summarized
as follows (in thousands, except per share data):
<TABLE>
Three Months Ended
(Unaudited)
<S> <C> <C> <C> <C>
1994 March 31 June 30 Sept 30 Dec 31
Total Operating Revenues $2,254 $1,401 $1,676 $1,656
Operating Income (Loss) (198) (674) (706) (1,981)
Net Earnings (Loss) (204) (691) (737) (2,676)
Net Earnings (Loss) Per
Share (.04) (.13) (.13) (.48)
Shareholders' Equity 3,298 2,652 3,133 502
</TABLE>
Page 8<PAGE>
Item 2. Management's discussion and analysis of financial
condition and results of operations.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Dynamic Healthcare Technologies, Inc. (the "Company"), reported a
return to profitability during the third quarter of 1995.
This was the first profitable quarter reported in two years.
Management completed its Restructuring Plan during the second
quarter of 1995 and is benefiting from the results thereof. This
report marks the third consecutive quarter with revenues in
excess of $2.2 million.
During the third quarter of 1995 the Company made significant
progress on its Refinancing Plan (the "Plan"), begun during
the second quarter. On July 31, 1995 the Company closed on a
Private Placement transaction as completion of Phase One of
the Plan. Through the issuance of Subordinated Convertible
Notes(the "SC Notes"), the Company raised $775,000 of funding.
The Company had announced its intent to seek registration of a
Form S-2 ("Rights Offering") but due to delays in obtaining
approval from the S.E.C. caused the abandonment of the registration. On
September 28, 1995 the Company accepted a Letter of Intent from an
institutional investor for the proposed purchase of a $2,250,000
investment in the Company. The institutional investment is expected to close
on or
before November 30, 1995. In connection therewith, on
October 20, 1995 the Company accepted a Loan Commitment from
First Union National Bank of Florida (the "Bank"), which
enables the Company to refinance its current demand Line of
Credit to a Note maturing on March 30, 1998 upon a minimum
principal payment of $500,000 from the institutional investment
proceeds. Additionally, on November 10, 1995 all of the
Subordinated Convertible Noteholders elected to convert to Series
A Preferred Shares of the Company.
On September 21, 1995 the NASDAQ Review Committee ("NRC")
informed the Company of its eligibility to be relisted on
the NASDAQ Stock Market under NASDAQ's continuing maintenance
requirements and upon timely filing of the Company's
Form 10-Q for the period ending September 30, 1995. The
NRC's decision, as cited in the Company's notification, was based
on the progress the Company's Refinancing Plan had made
toward achieving compliance with the NASDAQ's continuing capital
and surplus maintenance requirements. The Company's
return to profitability and the conversion of the SC Notes to
equity of the Company enables the Company to achieve
NASDAQ relisting by insuring compliance with the continuing
capital and surplus requirements.
The Company's operating results for the third quarter benefitted
from centralized operations. The Company's new corporate
headquarters, national support center, and restructured
operations have improved interdepartmental communication and
overall Company responsiveness. In addition, during the third
quarter the Company's employees completed team building
sessions designed to enhance Company-wide creativity,
cohesiveness, productivity and team work.
Management now intends to complete its Refinancing Plan,
intensify efforts to improve its product and service offerings,
continue its product development activities, enhance its sales
and marketing operations, and to more actively seek market
expansion opportunities.
9<PAGE>
Results of Operation
During the quarter ended September 30, 1995 ("95Q3"), the Company
reported revenues of $2,213,000 and net earnings of $148,000.
Reported revenues represent a 32% increase over revenues of
$1,675,000 reported for the same period one year ago. Revenues
from software support and maintenance for 95Q3 increased by in
excess of $567,000 over similar revenues from the same period in
1994, principally as a result of the increase in professional
service revenues. The acquisition of Dynamic Technical
Resources, Inc. in August of 1994, has expanded the Company's
custom programming, technical consulting, and other professional
services revenue opportunities. For the nine months ended
September 30, 1995, support, maintenance and other revenues
increased by $1,544,000, representing a 43% growth over similar
revenues reported for the same period in 1994.
Application software license revenues reported for the nine
months ended September 30, 1995 also increased by more than
35% over those reported for the same period a year ago. The
Company has continued to focus on shortening product delivery
cycles by improving interdepartmental communication and a
re-engineered installation process. This has resulted in
increased productivity and a corresponding increase in
application software license revenue.
As a result of the Company's shift in focus from the sale of
computer equipment to software and services, revenues from
computer equipment for the nine months ended September 30, 1995
decreased by over $758,000 as compared to those
reported for the same period in 1994. This decline was more than
offset by the increase in support, maintenance and other
revenues. Total operating revenues for the nine months ended
September 30, 1995 increased to $6,715,000, an increase of
$1,354,000 or 26% over total operating revenues for the same
period one year ago despite the decrease in hardware sales.
Total operating expenses for 95Q3 less the cost of equipment
sales declined by $156,000 from the same figure 94Q3. The
Company's restructuring and increased commitment to technical
consulting and professional services resulted in client services
expense for the 95Q3 increasing by $99,000 over 94Q3 levels.
Software development costs 95Q3 increased by almost
$27,000 over 94Q3 as development efforts slowed and less costs
were capitalized. Another factor has been the increased
utilization of this department's staff to assist in product
delivery, support and installation activities. Additionally,
joint marketing costs increased by $46,000 as a result of an
international LabPro 2000 sale made by a joint marketing partner.
These increases were more than offset by reductions in sales and
marketing and general and administrative expenses. Sales
and marketing costs for 95Q3 decreased by $133,000 over 94Q3
results as the Company combined selling efforts and reduced
staffing. General and administrative costs for 95Q3 also
decreased by $194,000 over the similar costs reported for 94Q3
reflecting the results of centralization after consolidating with
Dynamic Technical Resources, Inc. in Florida.
As a result of the Company's restructured operations and revenue
growth, the Company reported operating income of $252,000 for
95Q3 compared to a loss of $706,000 for 94Q3, a $958,000
improvement.
Interest expense and financing costs increased to $107,000 during
95Q3. During the quarter the Company completed a Private
Placement transaction issuing $775,000 of Convertible
Subordinated Notes bearing interest of 9% per annum.
Additionally, the Bank Line of Credit balance of $3,400,000 was
outstanding during the entire quarter.
10<PAGE>
Liquidity and Capital Resources
As of September 30, 1995, the Company reported working capital of
$192,000 and cash of $408,000. The Company's Refinancing Plan
completed Phase One during 95Q3 resulting in the issuance of
$775,000 of Convertible Subordinated Notes. On November 10, 1995,
all of the SC Notes were converted to Series A Preferred Shares
of the Company. Additionally, the Company intends to refinance
the Bank Line of Credit as a note maturing on March 30, 1998
under an existing Loan Commitment. Both the $2,900,000 of Bank
Line of Credit balance expected to be refinanced and the $775,000
of SC Notes subsequently converted have been included in the
September 30,1995 Condensed Balance Sheet as long term debt.
Software support and maintenance billings are somewhat seasonal
with respect to renewals, billings and collections. Annual
renewals are principally calendar year based, and as such, are
anticipated to provide a near term infusion of cash.
Historically, approximately 42% of software support and
maintenance contracts are billed during the fourth quarter. The
decline in accounts receivable at September 30, 1995 of $449,000
from the balance at December 31, 1994, and in deferred revenue of
$504,000 during the same period principally result from this
seasonality.
Advance billings on September 30, 1995 declined by $119,000 from
the balance on December 31, 1994 and unbilled receivables
declined by $115,000 during the same period. The Company has
improved interdepartmental communication and tightened project
management. The result has been to reduce its product delivery
cycles and billing lead time.
Capitalized software development costs as of September 30, 1995
increased by $196,000 over the balance on December 31,1994. The
Company continues to capitalize costs of Monitrax and
the Company's document imaging solution.
The Company expects to close the infusion of $2,250,000 equity
investment from an institutional investor and the refinancing
of the Bank Line of Credit on or before November 30, 1995.
Completing Phase One and issuing $775,000 of SC Notes
provided much needed bridge financing. The November 10, 1995
conversion of all of the SC Notes to Series A Preferred
Shares together with a return to profitability have positioned
the Company to comply with the relisting requirements of
NASDAQ.
The completion of the Refinancing Plan is vital for the Company
to advance its current plans to improve its product and service
offerings, continue its product development activities, enhance
its sales and marketing operations, and to more actively seek
market expansion opportunities.
Page 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material developments in existing
or pending legal proceedings involving the Company.
Item 2. Changes in Securities
The information required by this item is
incorporated by reference to Footnote E of the
financial statements included in Part I herein.
Item 3. Defaults Upon Senior Securities
The information required by this item is
incorporated by reference to Footnote E of the
financial statements included in Part I herein.
Item 4. Submission of Matters to a Vote of Securities
Holders
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11: Statement Regarding Computation
of Per Share Earnings.
(b) Reports on Form 8-K:
None.
Page 12<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 hereunto duly authorized.
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
(Registrant)
Date November 14, 1995 /S/MITCHEL J. LASKEY
Mitchel J. Laskey
President, Chief Operating Officer
and Treasurer
Date November 14, 1995 /S/PAUL S. GLOVER
Paul S. Glover
Vice President of Finance, CFO
Page 13
FORM 10-Q
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Index to Exhibits
Description of Exhibit Page Number
Exhibit 11: Statement regarding computation
of per share earnings 15
Page 14<PAGE>
FORM 10-Q
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Exhibit 11
Computation of Weighted Average Number of Shares Outstanding
Per Share Earnings
<TABLE>
Three Months Nine Months
Ended Ended
September 30, September 30,
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1995 1994 1995 1994
Earnings (loss)
available for
common
shareholders:
Net earnings
(loss) $ 148,313 $(736,933) $(557,125) $(1,631,346)
Weighted average
number of common
shares
outstanding and
earnings per
share:
Primary:
Weighted average
number of common
shares
outstanding 6,589,071 5,586,329 6,394,085 5,394,264
Dilutive effect
of options and
warrants using
treasury stock
method -- -- -- --
Weighted average
number of common
and common
equivalent shares
outstanding 6,589,071 5,586,329 6,394,085 5,394,264
Earnings (loss)
per share -
primary $ .02 $ (.13) $ (.09) $ (.30)
Fully diluted:
Weighted average
number of common
shares
outstanding 6,589,071 5,586,329 6,394,085 5,394,264
Dilutive effect
of options and
warrants using
treasury stock
method -- -- -- --
Weighted average
number of common
and common
equivalent shares
outstanding
assuming full
dilution 6,589,071 5,586,329 6,394,085 5,394,264
Earnings (loss)
per share - fully
diluted $ .02 $ (.13) $ (.09) $ (.30)
</TABLE>
Page 15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 408,386
<SECURITIES> 0
<RECEIVABLES> 1,867,868
<ALLOWANCES> (150,000)
<INVENTORY> 0
<CURRENT-ASSETS> 2,629,791
<PP&E> 2,848,165
<DEPRECIATION> 1,735,371
<TOTAL-ASSETS> 6,737,138
<CURRENT-LIABILITIES> 2,438,130
<BONDS> 3,733,349
<COMMON> 65,891
0
0
<OTHER-SE> 499,768
<TOTAL-LIABILITY-AND-EQUITY> 6,737,138
<SALES> 871,498
<TOTAL-REVENUES> 6,714,886
<CGS> 755,419
<TOTAL-COSTS> 6,965,913
<OTHER-EXPENSES> 54,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 274,203
<INCOME-PRETAX> (557,125)
<INCOME-TAX> 0
<INCOME-CONTINUING> (557,125)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (557,125)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
