1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission file number 1-11394
EDITEK, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3863205
(State or other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
1238 Anthony Road, Burlington, North Carolina 27215
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (910) 226-6311
- --------------------------------------------------------------------------------
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
The number of shares of Common Stock, $.15 par value, outstanding as of November
1, 1995 was 10,233,320.
<PAGE>
EDITEK, INC.
INDEX
<TABLE>
<CAPTION>
Page
Part I Financial Information:
<S> <C> <C>
Item 1:
Balance Sheets - September 30, 1995 (Unaudited)
and December 31, 1994 .................................... 3
Statements of Operations - Nine Months
Ended September 30, 1995 and 1994 and Three
Months Ended September 30, 1995 and 1994 (Unaudited) ..... 5
Statements of Cash Flows - Nine Months
Ended September 30, 1995 and 1994 (Unaudited) ............ 6
Notes to Financial Statements ...................... 7
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of Operations ............ 9
Part II Other Information ................................................. 16
Signatures ............................................... 17
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
EDITEK, Inc.
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited)
--------------------------------
(In Thousands)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 416 $1,105
Accounts receivable
Trade, less allowance for
doubtful accounts ($52,000 - 1995,
$204,000 - 1994) 1,223 737
Other 85 106
Inventories:
Raw Materials 456 532
Work in process 63 64
Finished goods 349 257
--------------------------------
868 853
Prepaid expenses and other 741 272
--------------------------------
Total current assets 3,333 3,073
Equipment and improvements
Furniture and equipment 7,230 5,689
Leasehold improvements 282 1,692
--------------------------------
7,512 7,381
Less accumulated depreciation
and amortization (6,704) (6,326)
--------------------------------
808 1,055
Goodwill 3,241 3,247
Other assets - 3
--------------------------------
$7,382 $7,378
================================
</TABLE>
3
<PAGE>
EDITEK, Inc.
BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited)
-------------------------------
(In Thousands)
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities
Line of credit $ - $ 850
Accounts payable
1,139 1,105
Accrued expense
333 347
Deferred revenues
13 39
Current portion of long-term debt
82 95
Current portion of capital lease
- 23
-------------------------------
Total current liabilities
1,567 2,459
Notes payable
- 63
Stockholders' equity
Preferred Stock--authorized 600,000
shares; no shares isssued or
outstanding
- -
CommonStock, $.15 par value; authorized - 20,000,000
shares; issued and outstanding - 10,23,814 shares
in 1995 and 8,075,339 shares in 1994
1,532 1,211
Additional paid-in capital
33,631 30,132
Accumulated deficit
(29,172) (26,382)
-------------------------------
5,991 4,961
Less: Note receivable from officer
(100) (100)
Treasury stock
(76) (5)
-------------------------------
Total stockholders' equity
5,815 4,856
$7,382 $7,378
===============================
</TABLE>
See notes to financial statements.
4
<PAGE>
EDITEK, Inc.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30 September 30 September 30
1995 1994 1995 1994
--------------------------------------------------------------------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Revenues
Product sales $5,243 $4,768 $1,833 $1,637
Royalties and fees 234 100 74 50
Interest and other income 186 183 5 111
--------------------------------------------------------------------
5,663 5,051 1,912 1,798
Cost of sales 4,800 4,487 1,619 1,732
--------------------------------------------------------------------
Gross profit 863 564 293 66
Operating expenses
Selling, general and administrative 2,963 2,428 1,024 842
Research and development 669 537 242 191
Interest 21 15 1 9
--------------------------------------------------------------------
3,653 2,980 1,267 1,042
--------------------------------------------------------------------
Net loss $(2,790) $(2,416) $(974) $(976)
====================================================================
Loss per common share $(0.28) $(0.34) $(0.10) $(0.13)
====================================================================
Weighted average number of common shares outstanding 9,915,427 7,174,160 9,321,610 7,417,837
====================================================================
</TABLE>
See notes to financial statements.
5
<PAGE>
EDITEK, Inc.
STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30 September 30
1995 1994
--------------------------------
(In Thousands)
<S> <C> <C>
Operating activities
Net loss $(2,790) ($2,416)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 501 432
Changes in operating assets & liabilities
net of effects from purchase of
PDLA & Bioman:
Accounts receivable (355) (55)
Inventories (2) (123)
Prepaid expenses & other (462) (62)
Accounts payable and accrued liabilities (146) (100)
Deferred revenues (26) (36)
Leases payable (23) (26)
--------------------------------
Net cash used in operating activities (3,303) (2,386)
Investing activities
Purchases of equipment & improvements (108) (445)
Cash acquired from PDLA acquisition
- 89
Cash used for BIOMAN acquisition
(37) -
--------------------------------
Net cash used in investing activities (145) (356)
Financing activities
Payments on Debt (945) 305
Proceeds from borrowings
16 -
Proceeds from issuance of stock for:
Employee stock purchase plan 21 19
Exercise of stock options and warrants 193 47
Private placements 3,715 824
Costs related to private placements (231) (38)
Conversion of note payable to common stock
61 -
Treasury Stock
(71) -
--------------------------------
Net cash provided by financing activities 2,759 1,157
--------------------------------
(Decrease) in cash and cash equivalents
$(689) $(1,585)
Cash and cash equivalents at beginning of period $1,105 $2,560
--------------------------------
Cash and cash equivalents at end of period $416 $975
================================
</TABLE>
6
<PAGE>
EDITEK, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements of EDITEK, Inc. (the "Company")
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of financial condition
and results of operations have been included. Operating results for the nine
month period ended September 30, 1995 are not necessarily indicative of the
results that may be attained for the entire year. For further information, refer
to the financial statements and footnotes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1994.
Loss Per Share: Loss per share amounts are based on the weighted average number
of shares of common stock outstanding. Common stock equivalents have not been
included in the computation, as the effect would be anti-dilutive.
NOTE B -- ACQUISITION OF PRINCETON DIAGNOSTIC LABORATORIES OF
AMERICA, INC. ("PDLA")
The Company acquired PDLA on February 11, 1994 by issuing 826,790 shares of its
common stock in exchange for all of the outstanding shares of PDLA stock. The
total value of the exchange was $3,876,000. The acquisition was accounted for
under the purchase method of accounting and the Company recorded goodwill of
$3,319,000. Additional shares of common stock were subsequently issued to former
major shareholders of PDLA through price protection agreements. The consolidated
results of operations for the year ended December 31, 1994 include the results
of the PDLA operations from February 12, 1994 to December 31, 1994.
NOTE C -- ACQUISITION OF BIOMAN PRODUCTS, INC. ("Bioman")
The Company acquired Bioman on June 1, 1995 in a transaction accounted for as a
purchase of assets. The Company paid $140,000 Canadian for Bioman utilizing both
cash and common stock.
7
<PAGE>
NOTE D -- DEBT
On August 15, 1989 the Company entered into a long-term loan agreement with
North Carolina Biotechnology Center ("NCBC"), a state funded, non-profit
organization whereby the Company borrowed an aggregate of $125,000 to fund the
development cost of a test for Chlamydia, a sexually transmitted disease. The
loan originally had an interest rate of seven and one half percent (7.5%) per
annum with all principal and interest due on August 15, 1994. The Company
amended the loan agreement on the due date and issued 16,100 shares of common
stock for $62,000 of the loan. The remaining principal, $63,000, now bears
interest at a rate of nine percent (9%) per annum. This principal and interest,
which are due on August 16, 1996, are convertible into shares of common stock.
During the nine months ended September 30, 1995, the Company paid the $33,000 of
the remaining accrued interest on the original loan.
8
<PAGE>
EDITEK, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company commenced operations in June 1983 and until 1986 was a
development stage company. The Company became engaged in the manufacture and
sale of Conventional Biodiagnostic Products as a result of its acquisition of
Granite Technological Enterprises, Inc. in June 1986. The Company began the
manufacture and sale of its EZ-SCREEN(R) diagnostic tests in 1985 and introduced
its patented one-step assays, VERDICT(R) and RECON(R), in 1993. On August 6,
1993, the Company formed diAGnostix, inc. to market its agricultural diagnostic
products. On February 11, 1994, the Company completed the acquisition of PDLA,
which is now a wholly owned subsidiary of the Company. On June 1, 1995, the
Company acquired Bioman. The operations of Bioman are now part of diAGnostix,
inc. Since inception, the Company has financed its working capital requirements
primarily from the sale of equity securities.
Nine Months Ended September 30, 1995 Compared to Nine Months Ended
September 30, 1994
Total revenues for the nine months ended September 30, 1995 were
$5,663,000 compared to total revenues of $5,051,000 for the nine months ended
September 30, 1994. Revenues from product sales and laboratory services for the
nine months ended September 30, 1995 were $5,243,000, an increase of $475,000
compared to $4,768,000 for the same period in 1994. These increases were the
result of the Company recognizing for the full nine months in 1995 the revenues
from the laboratory services of PDLA as compared to only seven and one-half
months in 1994.
Substance abuse testing products and services ("Substance Abuse Testing
Products and Services") which are marketed through PDLA, include EZ-SCREEN and
VERDICT on-site tests, the laboratory services provided by PDLA and other
ancillary products for the detection of abused substances. Sales of Substance
Abuse Testing Products and Services for the nine months ended September 30, 1995
were $4,063,000 compared to $3,739,000 for the nine months ended September 30,
1994. The increase of $324,000 in sales was primarily a result of increases in
sales from laboratory services of PDLA for the nine month period ending
September 30, 1995. During the nine months ended September 30, 1994, the Company
realized sales of $459,000 from laboratory services that were transferred to
American Medical Laboratories, Inc. ("AML") in January 1995 and, as such, are
not included in sales for the nine months ended September 30, 1995. Accordingly,
the actual increase in sales from Substance Abuse Testing Products and Services,
excluding those sales transferred to AML, was $783,000.
9
<PAGE>
Product sales include sales of agricultural diagnostic products
consisting of EZ-SCREEN test kits (for mycotoxin detection, drug residue
surveillance, etc.), species identification kits, other bioassay products and
third party products. These products are marketed through diAGnostix, inc.
Effective June 1, 1995, the Company acquired Bioman, an environmental diagnostic
company which sells both OEM products and products available through
distribution agreements with other diagnostic companies. Bioman was previously
the Company's distributor for Canada. The Bioman products are marketed through
diAGnostix, inc. Sales of products sold through diAGnostix, inc. were $840,000
for the nine months ended September 30, 1995, compared to $693,000 for the nine
months ended September 30, 1994. Sales from the former Bioman operations for the
four months ended September 30, 1995 offset a decrease in sales of the EZ-SCREEN
on-site testing products for the nine months ended September 30, 1995, as
compared to the nine months ended September 30, 1994.
Revenues generated from the shipment of products to the U.S. Department
of Defense were $37,000 for the nine months ended September 30, 1995. The
Company had no such revenues during the nine months ended September 30, 1994.
Revenues from contract manufacturing services were $16,000 for the nine
months ended September 30, 1995 compared to $110,000 during the nine months
ended September 30, 1994. This decrease was the result of delays in purchases by
a client company pending product launch of the product utilizing the component
produced by the Company.
Microbiological and associated product sales were $287,000 for the nine
months ended September 30, 1995 compared to $226,000 for these products during
the same period in 1994. This increase was the result of a price increase to a
large purchaser of these products.
Revenues from royalties and fees during the nine months ended September
30, 1995 were $234,000 compared to $100,000 for the corresponding period in
1994. This increase was primarily due to a payment made to the Company by the
landlord of the facility in New Jersey for renewing the lease for that facility
and the royalty received from AML of $59,000 pursuant to the agreement the
Company has with AML and increases in fees charged to the U.S. Department of
Defense for specific test development. Revenues from interest and other income
for the nine months ended September 30, 1995 were $186,000 compared to $183,000
for the nine months ended September 30, 1994.
Gross margins from the sales of both manufactured and products
purchased for resale for the nine months ended September 30, 1995 were 17%
compared to 19% of sales of these products for the nine months ended September
30, 1994. This decline was due to the comparative decrease in sales of the
agricultural diagnostic products and contract manufacturing services during the
nine months ended September 30, 1995.
10
<PAGE>
An increase in the number of samples being processed at PDLA resulted
in improved gross margins for laboratory services for the nine months ended
September 30, 1995, however, as in the same period in 1994, the cost of
providing laboratory services exceeded revenue realized from these services.
Since a large amount of the costs of providing laboratory services are fixed or
near fixed costs, the margins from sales of laboratory services are volume
dependent.
Selling, general and administration expenses for the nine months ended
September 30, 1995 were $2,963,000, as compared to $2,428,000 for the nine
months ended September 30, 1994. This increase of $535,000 is primarily the
result of increased sales and marketing expenses associated with the Substance
Abuse Testing Products and Services marketed through PDLA, as well as the
overall increases in general expenditures resulting from the acquisition of PDLA
effective February 14, 1994.
Research and development expenses incurred during the nine months ended
September 30, 1995 were $669,000 as compared to $537,000 for the nine months
ended September 30, 1994. This increase of $132,000 was primarily the result of
increased personnel costs and expenses, as well as increases in the work being
performed pursuant to the DOD contract.
For the nine months ended September 30, 1995, EDITEK incurred interest
expense of $21,000, compared to interest expense of $15,000 incurred during the
nine months ended September 30, 1994. This increase was primarily a result of
the Company borrowing funds against its line of credit. The Company paid off the
balance of the line of credit during the nine months ended September 30, 1995.
As a result of the above, the net loss for the nine months ended
September 30, 1995 was $2,790,000, compared to the net loss of $2,416,000 for
the nine months ended September 30, 1994.
Three Months Ended September 30, 1995 compared to Three Months Ended
September 30, 1994
Total revenues for the three months ended September 30, 1995 were
$1,912,000, compared to $1,798,000 for the three months ended September 30,
1994. Revenues from product sales were $1,833,000 for the three months ended
September 30, 1995, as compared to $1,637,000 for the same period in 1994.
Sales of Substance Abuse Testing Products and Services were $1,382,000
for the three months ended September 30, 1995, compared to $1,323,000 for the
three months ended September 30, 1994. While this represents an increase of
$59,000, the three month period ended September 30, 1994 includes sales of
$165,000 of laboratory services that were transferred to AML. As such, those
sales are not included in product sales for the three months ended September 30,
1995. Accordingly, the actual increase in sales from
11
<PAGE>
Substance Abuse Testing Products and Services, excluding those sales transferred
to AML, was $224,000.
Sales of products sold through diAGnostix, inc. were $354,000 for the
three months ended September 30, 1995, as compared to $222,000 for the three
months ended September 30, 1994. This increase of $132,000 was the result of the
acquisition of Bioman effective June 1, 1995.
Revenues from contract manufacturing services were $7,000 for the three
months ended September 30, 1995, compared to $19,000 during the three months
ended September 30, 1994.
Microbiological and associated product sales were $90,000 for the three
months ended September 30, 1995, compared to $73,000 for these products during
the same period in 1994. This increase was the result of a price increase to a
large purchaser of these products.
Revenues from royalties and fees during the three months ended
September 30, 1995 were $74,000 compared to $50,000 for the corresponding period
in 1994. This increase was primarily due to the royalty received from AML and
increases in fees charged to the U.S. Department of Defense for specific test
development.
Revenues from interest and other income for the three months ended
September 30, 1995 were $5,000 compared to $111,000 for the three months ended
September 30, 1994. During the three months ended September 30, 1994, the
Company recovered certain debts owed by a customer of laboratory services which
had previously been written off.
Gross margins from the sales of both manufactured products and products
purchased for resale for the three months ended September 30, 1995 were 9%, the
same as sales of these products for the three months ended September 30, 1994.
An increase in the number of samples being processed at PDLA resulted
in improved gross margins for laboratory services for the three months ended
September 30, 1995. However, as in the same period in 1994, the cost of
providing laboratory services exceeded revenue realized from these services.
Since a large amount of the costs of providing laboratory services are fixed or
near fixed costs, the margins from sales of laboratory services are volume
dependent.
Selling, general and administration expenses for the three months ended
September 30, 1995 were $1,024,000, as compared to $842,000 for the three months
ended September 30, 1994. This increase of $182,000 was primarily the result of
increased sales and marketing expenses associated with the Substance Abuse
Testing Products and Services marketed through PDLA.
12
<PAGE>
Research and development expenses incurred during the three months
ended September 30, 1995 were $242,000, as compared to $191,000 for the three
months ended September 30, 1994. This increase of $51,000 was primarily the
result of increased personnel costs and expenses, as well as increases in the
work being performed pursuant to the DOD contract.
For the three months ended September 30, 1995, EDITEK incurred interest
expense of $1,000, compared to interest expense of $9,000 incurred during the
three months ended September 30, 1994.
As a result of the above, the net loss for the three months ended
September 30, 1995 was $974,000, compared to the net loss of $976,000 for the
three months ended September 30, 1994.
Material Changes in Financial Condition
As of September 30, 1995, cash and cash equivalents were $416,000, as
compared to $1,105,000 at December 31, 1994. This decrease was primarily the
result of the net loss of $2,788,000 for the nine months ended September 30,
1995.
As of September 30, 1995, accounts receivable were $1,308,000, compared
to $843,000 at December 31, 1994. This increase of $465,000, or 55%, was
primarily the result of the acquisition of Bioman and increased sales during the
period preceding September 30, 1995, as compared to the period preceding
December 31, 1994.
Inventories were $868,000, or 2% higher, at September 30, 1995, as
compared to $853,000 at December 31, 1994.
Prepaid expenses and other assets were $741,000 at September 30, 1995,
as compared to $272,000 at December 31, 1994. This increase of $469,000 is
primarily the result of $500,000 the Company placed into an escrow account
towards the acquisition of MEDTOX Laboratories, Inc. ("MEDTOX"). The Company
will forfeit the $500,000 if the acquisition of MEDTOX does not occur solely as
a result of the Company being unsuccessful in raising the funds necessary to
consummate the acquisition.
As of December 31, 1994, the Company had an outstanding balance of
$850,000 on its line of credit. During the nine months ended September 30, 1995,
the Company repaid the total outstanding balance.
As of September 30, 1995, the Company had a balance of accounts payable
of $1,139,000, compared to a balance of $1,105,000 at December 31, 1994.
Accrued expenses were $333,000 or 4% lower at September 30, 1995, as
compared to $347,000 at December 31, 1994.
13
<PAGE>
As described more fully in the footnotes to the financial statements,
the Company entered into a $125,021 loan agreement with the North Carolina
Biotechnology Center (NCBC). The loan, plus accrued interest, was due August 14,
1994. On December 15, 1994, the Company and NCBC negotiated a loan modification
extending the due date to August 14, 1996. In addition, NCBC has exercised their
right to convert 50%, or approximately $62,000, of the loan amount into 16,100
shares of the Company's common stock. Accordingly, at September 30, 1995, the
Company had a balance of loan payable of $63,000.
Inflation
Inflation generally affects the costs incurred by EDITEK in its
purchase of raw materials, as well as in certain components of its selling,
general, and administrative expenses. The ability of EDITEK to increase prices
may be limited by competitive factors or contractual obligations.
Liquidity and Capital Resources
Since its inception, the working capital requirements of the Company
have been funded by cash received from equity investments in the Company. At
September 30, 1995, the Company had cash and cash equivalents of $416,000. The
Company has also put $500,000 in an escrow account towards the acquisition of
MEDTOX. The Company is in the process of raising up to $31 million to finance
the acquisition of MEDTOX and provide working capital to support the post
acquisition company. If the acquisition of MEDTOX was not to occur solely as a
result of the Company not being able to raise sufficient capital to consummate
the acquisition, the Company will forfeit the $500,000 to MEDTOX.
As of September 30, 1995, the Company had not achieved a positive cash
flow from operations. Accordingly, the Company relies on available credit
arrangements, outside funding of research and development, and continued sales
of its equity securities to fund operations until a positive cash flow can be
achieved. Management believes that it has taken, and is prepared to continue to
take, the actions required to yield a positive cash flow from operations in the
future.
The Company does not intend to rely primarily on further cost
reductions in order to achieve a positive cash flow. The Company has already
made a substantial investment in research and development and marketing. It
believes the appropriate strategy for capitalizing on the investment made to
date is to maintain, and later expand, its current level of operations,
including research and development and marketing. Therefore, the Company plan
includes (i) continuing to aggressively monitor and control costs, (ii)
increasing revenue from sales of the Company's products, services, and research
and development contracts, (iii) raising additional capital through sales of its
securities, as well as (iv) pursuing synergistic acquisitions to increase the
Company's critical mass. There can be no assurance that costs can be controlled,
revenues can be increased,
14
<PAGE>
financing may be obtained, acquisitions successfully consummated, or that the
Company will be profitable.
Through October 31, 1995, the Company has sold a total of 1,860,834
shares of common stock in seven separate private transactions in 1995. The sale
of these 1,860,834 shares generated net proceeds of $3,427,000 to the Company.
15
<PAGE>
ITEM 2 CHANGES IN SECURITIES. Inapplicable
ITEM 3 DEFAULTS ON SENIOR SECURITIES. Inapplicable
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. None
ITEM 5 OTHER INFORMATION
16
<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.
Date: November 10, 1995
EDITEK, INC.
By: /s/ James D. Skinner
James D. Skinner, Chairman, President
and Chief Executive Officer
By: /s/ Peter J. Heath
Peter J. Heath, Vice President of Finance
and Chief Financial Officer
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 416
<SECURITIES> 0
<RECEIVABLES> 1429
<ALLOWANCES> 121
<INVENTORY> 868
<CURRENT-ASSETS> 3333
<PP&E> 7512
<DEPRECIATION> 6704
<TOTAL-ASSETS> 7382
<CURRENT-LIABILITIES> 1567
<BONDS> 0
<COMMON> 1532
0
0
<OTHER-SE> 4283
<TOTAL-LIABILITY-AND-EQUITY> 7382
<SALES> 5243
<TOTAL-REVENUES> 5663
<CGS> 4800
<TOTAL-COSTS> 4800
<OTHER-EXPENSES> 669
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21
<INCOME-PRETAX> (2790)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2790)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2790)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
</TABLE>
