<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
(Mark One)
/ / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
/ / SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended April 30, 1995
OR
/ / 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 0-11434
ALFIN, INC.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-3032734
- - ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
720 Fifth Avenue, New York, N.Y. 10019
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 333-7700
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date: 11,402,904 shares of common stock, $.01 par value per share,
at June 8, 1995.
1
<PAGE> 2
ALFIN, INC. AND SUBSIDIARIES
----------------------------
FORM 10-Q
---------
INDEX
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<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
- - ------ ---------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
April 30, 1995 and July 31, 1994 3-4
Condensed Consolidated Statements of
Operations for the three months and
nine months ended April 30, 1995 and
1994. 5
Condensed Consolidated Statements of
Cash Flows for the nine months ended
April 30, 1995 and 1994. 6
Notes to Condensed Consolidated Financial
Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-13
Part II - OTHER INFORMATION
- - ------- -----------------
Item 4. Submission of matters to a vote of
Security Holders 14
Item 5. Other information 14
Signatures 15
</TABLE>
2
<PAGE> 3
ALFIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
1995 1994
ASSETS ------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 700,874 $ 10,444
Accounts receivable, net of allowances
for doubtful accounts and chargebacks
of $1,689,698 and $1,475,650 at April
30, 1995 and July 31, 1994, respectively
and sales allowances of $406,264 and
$357,471 at April 30, 1995 and July 31,
1994, respectively 2,349,617 2,688,848
Inventories 3,102,706 2,553,333
Prepaid expenses and other current assets 166,661 282,381
------------ ------------
Total current assets 6,319,858 5,535,006
------------ ------------
PROPERTY AND EQUIPMENT 8,174,506 7,948,931
Less-accumulated depreciation &
amortization 5,748,818 5,093,042
------------ ------------
Property & equipment, net 2,425,688 2,855,889
------------ ------------
OTHER ASSETS:
License agreement & trademarks,
net of amortization of $838,653 and
$776,760 at April 30, 1995 and
July 31, 1994, respectively 895,716 957,609
Goodwill, net of accumulated amorti-
zation of $374,424 and $315,305 at
April 30, 1995 and July 31, 1994,
respectively 2,778,614 2,837,733
Other 172,945 175,945
------------ ------------
Total other assets 3,847,275 3,971,287
------------ ------------
Total assets $ 12,592,821 $ 12,362,182
============ ============
</TABLE>
The accompanying notes are an integral
part of these consolidated balance sheets.
3
<PAGE> 4
ALFIN, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
1995 1994
------------- -------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of mortgage, note
and other loans payable $ 3,995,730 $ 5,120,644
Due to related parties 200,000 300,000
Accounts payable 3,664,899 3,789,276
Accrued salaries and commissions 1,160,764 566,163
Accrued construction costs 317,836 136,962
Accrued expenses & other 1,089,802 1,526,891
------------- -------------
Total current liabilities 10,429,031 11,439,936
NOTE PAYABLE - 148,582
------------- -------------
Total liabilities 10,429,031 11,588,518
------------- -------------
REDEEMABLE PREFERRED STOCK 750,000 750,000
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value,
17,000,000 shares authorized;
11,402,904 shares issued and
outstanding at April 30, 1995
and July 31, 1994, respectively 114,029 114,029
Additional paid-in capital 12,522,390 12,522,390
Accumulated deficit (11,222,629) (12,612,755)
------------- -------------
Total shareholders' equity 1,413,790 23,664
------------- -------------
Total liabilities and share-
holders' equity $ 12,592,821 $ 12,362,182
============= =============
</TABLE>
The accompanying notes are an integral part
of these consolidated balance sheets.
4
<PAGE> 5
ALFIN, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 8,266,115 $ 6,638,880 $ 24,298,871 $ 21,543,609
Cost of goods sold 2,036,318 1,595,435 6,868,940 5,313,309
------------ ------------ ------------ ------------
Gross profit on sales 6,229,797 5,043,445 17,429,931 16,230,300
Selling, general and
administrative expenses 5,444,685 5,663,166 15,673,781 17,402,973
------------ ------------ ------------ ------------
Operating Profit (loss) 785,112 (619,721) 1,756,150 (1,172,673)
Other Income (expense)
Interest expense (93,988) (124,420) (313,337) (331,915)
Other (6,897) (1,775) (52,687) 17,065
------------ ------------ ------------ ------------
Total other expense (100,885) (126,195) (366,024) (314,850)
------------ ------------ ------------ ------------
Net Income (loss) $ 684,227 $ (745,916) $ 1,390,126 $ (1,487,523)
============ ============ ============ ============
Weighted average number
of common and common
equivalent shares 11,415,914 10,496,167 11,402,904 10,694,434
------------ ------------ ------------ ------------
Net Income (loss) per
common and common
equivalent shares $ 0.06 $ (0.07) $ 0.12 $ (0.14)
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part
of these financial statements.
5
<PAGE> 6
ALFIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
April 30,
---------
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- - ------------------------------------
Income (Loss) from Operations $ 1,390,126 $ (1,487,523)
------------ ------------
Adjustments to Reconcile Net Income (Loss)
to Net Cash provided by (used in)
Operating Activities:
Depreciation & Amortization 776,788 948,980
(Increase) Decrease in Assets
Accounts Receivable, net 339,231 (58,277)
Inventory (549,373) 448,189
Prepaid Expenses & Other 118,720 (223,012)
Increase (Decrease) in Liabilities
Accounts Payable & Accrued Expenses 65,427 134,373
------------ ------------
Total Adjustments 750,793 1,250,253
------------ ------------
Net Cash Provided by (used in)
Operating Activities 2,140,919 (237,270)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
- - ------------------------------------
Capital Expenditures (225,575) (139,211)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
- - ------------------------------------
Payment of Line of Credit, net (449,914) (1,039,802)
(Payment) Proceeds of Related Party Loans (100,000) 34,234
Payment of Note Payable - (500,000)
(Payment) Proceeds of Term Promissory Note (450,000) 1,405,482
Payment of Mortgage (225,000) (656,338)
------------ ------------
Net Cash Used in
Financing Activities (1,224,914) (756,424)
------------ ------------
Net Increase (Decrease) in Cash 690,430 (1,132,905)
Cash at Beginning of Year 10,444 1,133,518
------------ ------------
Cash at End of Period $ 700,874 $ 613
============ ============
</TABLE>
The accompanying notes are an integral
part of these consolidated statements.
6
<PAGE> 7
ALFIN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
In the opinion of management, the accompanying condensed consolidated
financial statements contain all of the adjustments necessary to
present fairly the Company's financial position at April 30, 1995
(unaudited) and July 31, 1994, (audited) the results of its operations
for the three and nine months ended April 30, 1995 and 1994
(unaudited) and the cash flows for the nine months ended April 30,
1995 and 1994 (unaudited). All adjustments are of a normal recurring
nature.
All significant intercompany transactions and accounts have been
eliminated in consolidation. Interim period results are not
necessarily indicative of the results of operations for a full year.
These quarterly financial statements should be read in conjunction
with the Company's audited financial statements contained in the
Annual Report on Form 10-K for the fiscal year ended July 31, 1994,
filed with the Securities and Exchange Commission.
(2) INVENTORY
Inventory at April 30, 1995 and July 31, 1994 was comprised of
finished goods amounting to $1,129,499 and $1,284,736 and raw
materials and semi-finished goods of $1,973,207 and $1,268,597,
respectively.
(3) OTHER ASSETS
License agreements and trademarks are recorded at cost and are
amortized over their estimated useful lives of 19 years. Goodwill is
amortized using the straight line method over 40 years.
7
<PAGE> 8
ALFIN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(4) NOTES PAYABLE:
The Company signed in April 1990, a $5.0 million, five-year term loan
with Midlantic National Bank ("Midlantic") which bears interest at a
rate of .5% above the bank's prime lending rate. The balance under
this term loan was $550,000 and $1,000,000 at April 30, 1995 and April
30, 1994, respectively. At July 31, 1994 the balance under the term
loan was $1,000,000. The term loan agreement contains financial
covenants which require the Company to have consolidated working
capital of not less than $75,000 at April 30, 1995. The actual
consolidated working capital at April 30, 1995 was a deficit of
$4,109,173. During August 1994, the Company and Midlantic agreed to
modify this term loan to be repaid in equal monthly installments of
$50,000.
The Company also has a term promissory note with Midlantic which bears
interest at a rate of 2% above the banks prime lending rate. The term
promissory note is collateralized by a mortgage on a distribution and
administration facility. Principal installments under the term
promissory note are due on the first day of each month until December
1, 1998. The balance under the term promissory note was $1,100,000
and $1,400,000 at April 30, 1995 and April 30, 1994 respectively. At
July 31, 1994 the term promissory note had a balance of $1,325,000.
The issuance of a going concern audit opinion as of July 31, 1994 was
an event of default under the loan agreement with Midlantic. Due to
this event of default and the default of the financial covenants
described above, the long-term portion of the term promissory note of
$800,000 has been classified as a current liability.
The Company also maintains a $700,000 ($1.0 million at April 30, 1994)
secured line of credit with Midlantic which bears interest at 1.5%
above Midlantic's prime lending rate. The Company is required to
maintain a compensating balance equal to 5% of the line of credit.
Borrowings under this line of credit were $245,730 and $725,946 at
April 30, 1995 and April 30, 1994, respectively. At July 31, 1994
borrowings under this line of credit were $641,233.
8
<PAGE> 9
ALFIN, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In addition, the Company maintains a secured line of credit of up to
$2,100,000 with Credit Lyonnais which is secured by the accounts
receivable of Adrien Arpel, Inc. Borrowings under this line of credit
were $2,100,000 at April 30, 1995, April 30, 1994, and July 31, 1994.
At April 30, 1995, the Company had outstanding advances in the amount
of $200,000 from Fine Fragrances Distribution Inc., as compared to
$300,000 at April 30, 1994.
(5) COMPUTATION OF NET INCOME (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE
Net income per common and common equivalent share was computed by
dividing net income by the weighted average number of shares of common
stock and common stock equivalents outstanding during the periods.
Common stock equivalents include the number of shares issuable on
exercise of the outstanding options and warrants less the number of
shares that could have been purchased with the proceeds from the
exercise of the options and warrants based on the average price of
common stock during the period.
(6) RETURNS AND RESERVES
As is common in the fragrance and cosmetics industry, the Company
provides its domestic customers with the limited right to return
merchandise in order to balance inventory and stock levels. The
historical rate of return experienced by the Company varies between
product lines, but generally ranges, on an annual basis, between 7% to
10% of total sales. The Company maintains reserves for uncollectible
accounts receivable and discontinued product lines throughout the
fiscal year as charges to selling, general and administrative expenses
and cost of goods sold, respectively. To date these charges have not
been material.
9
<PAGE> 10
ALFIN, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NINE MONTHS ENDED APRIL 30, 1995 AND 1994
The Company achieved net income for the nine months ended April 30,
1995 of $1,390,126 as compared to a net loss of ($1,487,523) recorded
for the nine months ended April 30, 1994. The Company has now posted
profits in its last four quarters and these nine month results
represent the highest nine month profits since April 30, 1987.
Net sales for the nine months ended April 30, 1995 increased 12.8% to
$24,298,871 as compared to $21,543,609 for the nine months ended April
30, 1994. A 33.5%, or $5,878,461 increase in sales of cosmetic
products to $23,421,932 from $17,543,471 recorded in the same period
of the prior fiscal year accounted for the higher sales.
The cosmetic sales increase is attributable to the success of
specially packaged cosmetic products sold through electronic
marketing, which amounted to $11,912,395, during the nine months ended
April 30, 1995. The Company commenced marketing products in this new
market during April 1994 with comparable sales of $1,572,021 recorded
during the third quarter of the prior fiscal year. The Company's
ability to fill most orders received has been improving with increased
inventory levels made possible by the improvement in cash flow
resulting from profitable operations. During the third quarter
unfulfilled sales orders decreased considerably from approximately
$1,900,000 at the end of the second quarter of fiscal 1995 to
approximately $850,600 at April 30, 1995. The Company's marketing
through television is furthering its sales at store and salon
locations. Management has channeled available liquidity to increase
production of cosmetic inventory for sale at store locations and
through television marketing. This has contributed to the drop in
fragrance sales of 78.1% or approximately $3,123,000 from $4,000,138
recorded during the third quarter of fiscal 1994 to $876,939 recorded
during the third quarter of fiscal 1995. The fiscal 1994 sales figures
include special sales of mass market products and the nonrecurring
sale of discontinued product lines in the amount of approximately $2.6
million.
10
<PAGE> 11
ALFIN, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Cost of goods sold as a percentage of net sales was 28.3% for the nine
months ended April 30, 1995 as compared to 24.7% for the nine months
ended April 30, 1994. The cost of goods sold percentage on cosmetic
products increased to 27.9% for the nine months ended April 30, 1995,
as compared to 19.7% for the nine months ended April 30, 1994. The
increase is primarily attributable to sales mix since a greater
portion of the cosmetic sales are at wholesale as compared to retail
over the same period of the prior fiscal year.
Advertising, promotional, selling and general and administrative
expenses decreased 9.9%, or $1,729,192 to $15,673,781 from $17,402,973
for the nine months ended April 30, 1995 as compared to April 30,
1994. The decrease reflects the continued effect of the Company's
cost reduction programs.
Expenses from non operating items increased 16.3% or $51,174 to
$366,024 for the nine months ended April 30,1995 as compared to
$314,850 for the nine months ended April 30, 1994. The increase is
primarily attributable to a non-recurring expense adjustment offset by
decreased interest expenses of $18,578 due to decreased debt levels.
Interest expense has decreased even though interest rates have gone
up, as compared to the prior fiscal year.
Net income per common and common equivalent share for the nine months
ended April 30, 1995 was $0.12 as compared to a net loss of ($0.14)
for the nine months ended April 30, 1994.
11
<PAGE> 12
ALFIN, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
THREE MONTHS ENDED APRIL 30, 1995 AND 1994:
The Company recorded net income of $684,227 for the three months ended
April 30, 1995 as compared to a net loss of ($745,916) for the three
months ended April 30, 1994.
Net sales for the three months ended April 30, 1995 increased 24.5% to
$8,266,115 as compared to $6,638,880 for the three months ended April
30, 1994. Sales of cosmetic products increased 35.5% from $5,946,777
to $8,057,231. Sales of products through television marketing were
approximately $3,870,000 for the three months ended April 30, 1995 and
$1,572,021 for the same quarter of the prior fiscal year. Sales
through television commenced during April 1994. Management channeled
most of the Company's available liquidity into manufacturing cosmetic
products to satisfy demand in this market.
Cost of goods sold as a percentage of net sales was 24.6% for the
three months ended April 30, 1995 as compared to 24.0% for the three
months ended April 30, 1994. The cost of goods sold percentage on
cosmetic products increased from 20.9% to 23.8% during the three
months ended April 30, 1995 as compared to the same period of the
prior fiscal year.
Advertising, promotional, selling and general and administrative
expenses decreased 3.9% or $218,481 to $5,444,685 during the three
months ended April 30, 1995 as compared to April 30, 1994. This
quarter marks the eighth consecutive quarter that these expenses have
decreased.
Expenses from non operating items deceased 20.1% or $25,310 to
$100,885 during the three months ended April 30, 1995 as compared to
the same period of the prior fiscal year.
Net income per common and common equivalent share for the three months
ended April 30, 1995 was $0.06 as compared to a net loss of ($0.07)
for the three months ended April 30, 1994.
12
<PAGE> 13
ALFIN, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended April 30, 1995 working capital increased
$1,795,757 to a deficit of ($4,109,173) as compared to a deficit of
($5,904,930) for the year ended July 31, 1994. The Company's term
loan agreement with Midlantic National Bank ("Midlantic") contains
financial covenants which require the Company to have consolidated
working capital of not less than $75,000 at April 30, 1995. The actual
consolidated working capital was a deficit of ($4,109,173) at April
30, 1995 and is an event of default under the loan agreement with
Midlantic. The issuance of a going concern audit opinion as of July
31, 1994 was also an event of default under the loan agreement with
Midlantic. Due to these events of default, the long term portion of
the Company's term promissory note of $800,000 has been classified as
a current liability.
Due to the violation of the financial covenants and the issuance of a
going concern audit opinion the Company has been operating in default
of its loan agreement with Midlantic since July 31, 1992. At July 31,
1992 the Company had total borrowings with Midlantic of $9,791,711.
During August 1994, the Company and Midlantic renegotiated repayment
of the outstanding loan facilities into longer, more manageable terms.
Total borrowings with Midlantic were $1,895,730 at April 30, 1995 as
compared to $3,121,946 at April 30, 1994. The Company is currently
working with Midlantic to change the financial covenants to more
closely match the Company's current operating trends.
During the quarter ended April 30, 1995 the Company extended its loan
agreement with Credit Lyonnais, which was due to expire during
February 1995 until October 15, 1995. Under the loan agreement with
Credit Lyonnais, the Company maintains a revolving secured line of
credit of up to $2,100,000. The loan is secured by the accounts
receivable of Adrien Arpel and bears interest based on the eurorate
plus 1/2% or plus 1 and 1/2% depending on maturities.
The Company is confident that the current profitable results and
positive cash flow situation will continue. The Company has been
successful in working with vendors to schedule the payment of old
accounts payable invoices which had accumulated during the prior two
fiscal years. Management believes that expenses are under control but
continues to seek ways to further cut expenses while increasing sales
13
<PAGE> 14
and maintaining current staff levels.
ALFIN, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On April 28, 1995, the Company held its 1994 Annual Meeting of
Shareholders (the "Meeting"). At the meeting shareholders elected Jacques
Desjardins, Elisabeth Fayer, Steven Korda, Suzanne Langlois and Mayer D. Moyal
as directors of the Company until the next annual meeting of shareholders. In
addition, at the meeting (i) by a vote of 9,698,785 shares voted in favor and
98,051 shares voted against, approved the grant of options to purchase 100,000
shares of Common Stock of the Company at $1.00 per share to each of Jacques
Desjardins, Elisabeth Fayer, Steven Korda, Suzanne Langlois and Walter M.
Epstein (ii) by a vote of 9,778,851 shares voted in favor and 25,962 shares
voted against, approved the appointment of Arthur Andersen LLP as independent
auditors of the Company for fiscal 1995.
ITEM 5. OTHER INFORMATION
None
14
<PAGE> 15
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.
ALFIN, INC.
-------------------------
(Registrant)
/S/ Mayer D. Moyal
-------------------------
Mayer D. Moyal
Chairman of the Board and
Chief Executive Officer
/S/ Michael D. Ficke
-------------------------
Michael D. Ficke
Chief Financial Officer
Dated: June 2, 1995
- - --------------------
15
<PAGE> 16
EXHIBIT INDEX
-------------
Exhibit 27 -- Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALFIN INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS FOR
THE NINE MONTHS ENDED APRIL 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10Q.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-START> AUG-01-1994
<PERIOD-END> APR-30-1995
<EXCHANGE-RATE> 1
<CASH> 700,874
<SECURITIES> 0
<RECEIVABLES> 2,349,617
<ALLOWANCES> 2,095,962
<INVENTORY> 3,102,706
<CURRENT-ASSETS> 6,319,858
<PP&E> 8,174,506
<DEPRECIATION> 5,748,818
<TOTAL-ASSETS> 12,592,821
<CURRENT-LIABILITIES> 10,429,031
<BONDS> 0
<COMMON> 114,029
750,000
0
<OTHER-SE> 1,299,761
<TOTAL-LIABILITY-AND-EQUITY> 12,592,821
<SALES> 24,298,871
<TOTAL-REVENUES> 24,298,871
<CGS> 6,868,940
<TOTAL-COSTS> 15,673,781
<OTHER-EXPENSES> 366,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 313,337
<INCOME-PRETAX> 1,390,126
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,390,126
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,390,126
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
