FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1998
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: 2-96392-A
TRIANGLE IMAGING GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Florida 59-2493183
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
4400 West Sample Road, Coconut Creek, Florida 33073
(Address of Principal Executive Office) (Zip Code)
954-968-2080
(Registrant's telephone number including area code)
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 registrant's Common Stock, $.001 par value,
outstanding as of September 30, 1998 was 12,911,977 shares.
<PAGE>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX
Page
Number
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet --
September 30, 1998.................................... 1
Consolidated Statement of Operations --
For the Nine and Three Months Ended
September 30, 1998 and 1997........................... 2
Consolidated Statement of Cash Flows --
For the Nine and Three Months Ended
September 30, 1998 and 1997........................... 3
Notes to Financial Statements........................... 4-6
Item 2. Management's Discussion and Analysis..................... 7-8
PART II - OTHER INFORMATION.................................................. 9
SIGNATURES.................................................................. 10
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS
September 30,
1998
---------------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 278,013
Accounts receivable, net of allowance for doubtful
accounts of $160,000 1,569,181
Inventory 35,957
Prepaid expenses 51,372
Deferred tax asset 263,000
---------------
TOTAL CURRENT ASSETS 2,197,523
EQUIPMENT 246,200
GOODWILL 3,074,488
DEFERRED TAX ASSET 130,000
OTHER ASSETS 1,380,068
---------------
$ 7,028,279
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 876,257
Deferred revenue 303,420
Due to stockholders 50,000
Deferred tax liability 34,000
Current portion of note payable 400,000
---------------
TOTAL CURRENT LIABILITIES 1,663,677
NOTE PAYABLE 850,000
DEFERRED TAX LIABILITY 133,000
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
authorized 50,000,000 shares: 12,911,977
issued and outstanding 12,912
Additional paid-in capital 5,409,516
Accumulated deficit (939,676)
Stock subscription receivable (25,050)
Deferred compensation (76,100)
---------------
TOTAL STOCKHOLDERS' EQUITY 4,381,602
---------------
$ 7,028,279
===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------------------- ---------------------------------
1998 1997 1998 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
SALES $ 2,411,727 $ 1,487,382 $ 6,286,172 $ 4,076,340
COST OF SALES 723,793 409,302 1,181,737 1,034,444
--------------- --------------- --------------- ---------------
GROSS PROFIT 1,687,934 1,078,080 5,104,435 3,041,896
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 2,014,084 749,567 4,503,232 2,218,402
PRODUCT DEVELOPMENT 162,313 -- 162,313 --
NON-CASH IMPUTED COMPENSATION EXPENSE 47,390 23,420 146,670 64,840
AMORTIZATION OF GOODWILL 57,275 18,604 123,445 66,816
--------------- --------------- --------------- ---------------
INCOME (LOSS) FROM OPERATIONS (593,128) 286,489 168,775 691,838
INTEREST EXPENSE 24,959 30,760 87,867 83,544
RESTRUCTURING EXPENSE 60,000 -- 60,000 --
NON-RECURRING CHARGES ASSOCIATED
WITH ACQUISITIONS -- -- 151,200 --
--------------- --------------- --------------- ---------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST AND TAX PROVISION (678,087) 255,729 (130,292) 608,294
MINORITY INTEREST -- (13,935) -- 58,968
TAX PROVISION (107,000) -- -- --
--------------- --------------- --------------- ---------------
NET INCOME/(LOSS) FROM CONTINUING OPERATIONS (571,087) 269,664 (130,292) 549,326
(LOSS) FROM DISCONTINUED OPERATIONS (289,162) -- (220,000) --
--------------- --------------- --------------- ---------------
NET INCOME/(LOSS) $ (860,249) $ 269,664 $ (350,292) $ 549,326
=============== =============== =============== ===============
NET INCOME PER SHARE:
Basic $ (0.07) $ 0.03 $ (0.03) $ 0.07
=============== =============== =============== ===============
Diluted $ (0.06) $ 0.02 $ (0.02) $ 0.06
=============== =============== =============== ===============
NUMBER OF SHARES USED IN COMPUTATION:
Basic 13,015,073 9,330,665 11,638,225 7,766,832
=============== =============== =============== ===============
Diluted 15,470,437 11,042,176 14,093,589 9,478,343
=============== =============== =============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
--------------------------------
1998 1997
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (350,292) $ 549,326
Adjustment to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 90,568 75,766
Amortization of goodwill 123,445 66,816
Non-cash imputed compensation 146,670 64,840
Minority interest -- 58,968
Changes in assets and liabilities:
Increase in accounts receivable (790,626) (156,805)
Increase in inventory (35,957) --
Increase in prepaid expenses (36,883) 18,690
Increase in other assets (777,115) (186,317)
Increase in accounts payable and accrued expenses 472,003 244,194
Decrease in deferred revenue (87,505) 2,764
--------------- --------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,245,692) 738,242
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition (484,942) --
Purchase of equipment (182,279) (94,222)
--------------- --------------
CASH USED IN INVESTING ACTIVITIES (667,221) (94,222)
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of note payable (350,000) (125,000)
Proceeds from sale of common stock 1,525,316 260,750
Payment of dividends -- (5,891)
Decrease in stock subscription receivable 501,250 --
Other -- 17,753
Purchase of treasury stock (10,649) (233,000)
--------------- --------------
CASH PROVIDED BY FINANCING ACTIVITIES 1,665,917 (85,388)
--------------- --------------
NET INCREASE (DECREASE) IN CASH (246,996) 558,632
CASH - BEGINNING OF PERIOD 525,009 200,264
--------------- --------------
CASH - END OF PERIOD $ 278,013 $ 758,896
=============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Triangle
Imaging Group, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation (consisting of normal recurring accruals) have been included. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Operating results for the nine
month period ended September 30, 1998 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company=s Annual Report on Form 10-KSB for the year
ended December 31, 1997.
2. EARNINGS PER SHARE
Basic earnings per share are computed on the weighted average number of
common shares actually outstanding during the period. Diluted earnings per share
considers potential shares issuable upon exercise or conversion of other
outstanding instruments where dilution would result. The earnings per share for
the prior period have been restated to conform with the Company=s adoption of
FAS No. 128.
3. STOCKHOLDERS' EQUITY
During the three months ended September 30, 1998, an individual exercised
stock options resulting in the issuance of 20,000 shares of common stock and
proceeds of $17,500.
During the three months ended September 30, 1998 the Company sold 296,712
shares of common stock resulting in proceeds of $596,957.
4. ACQUISITIONS
During May 1998, the Company acquired all of the outstanding capital stock
of Credit Bureau Services, Inc., EJG Services, Inc., Florida Credit Bureau,
Inc., and Multitask Computer Systems, Inc. These companies were acquired by the
Company for an aggregrate of (i)$250,000 in immediately available funds,
(ii)promissory notes in the principal amount of $100,000, and (iii)630,000
shares of the Company=s common stock. The acquisition of these companies have
been accounted for as a purchase and accordingly, the assets acquired and
liabilities assumed have been recorded at their estimated fair values which
approximates book value. The purchase prices, including acquisition costs, less
the companies= book values totaled $1,558,229 which was recorded as goodwill.
The following schedule combines the unaudited pro forma results of
operations of the Company and these acquisitions for the nine months ended
September 30, 1998 and 1997 as if the acquisition had occurred on January 1,
1998 and 1997 and includes such adjustments which are directly attributable to
the acquisition. It should not be considered indicative of the results that
would have been achieved had the acquisition not occurred or the results that
would have been obtained had the acquisition actually occurred on January 1,
1997.
<TABLE>
Nine Months Ended June 30,
--------------------------------------
1998 1997
---------------- ---------------
<S> <C> <C>
Net sales $ 7,063,838 $ 5,773,180
Net income $ (365,013) $ 570,760
Net income per share:
Basic $ (.03) $ .07
Diluted $ (.03) $ .06
Shares used in computation:
Basic 11,638,225 8,396,832
Diluted 14,093,589 10,108,343
</TABLE>
5. DISCONTINUED OPERATIONS
During May 1998, the Company acquired all the outstanding stock of Trimax
Systems Corporation. This company was acquired by the Company for 270,000 shares
of the Company=s common stock. In September 1998, the Company decided to rescind
the acquisition resulting in the cancellation of the 270,000 shares.
Accordingly, the financial statements have been restated showing the operations
of TriMax as discontinued operations. For the nine months ended September 30,
1998, TriMax had revenues of $152,000.
6. SUBSEQUENT EVENT - FINANCING
In October 1998, the Company completed a financing of $1,500,000 with
Waterside Capital Corporation. Waterside has agreed to purchase shares of Class
C Preferred stock and warrants to purchase shares of common stock at prices
ranging from $2.15 to $3.00 per share.
<PAGE>
Management's Discussion and Analysis of Financial Condition
Forward Looking Statements
Statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, and elsewhere in this document, as well as
statements made in press releases and oral statements that may be made by the
Company or by officers, directors or employees of the Company acting on the
Company's behalf that are not statements of historical or current fact,
constitute "forward looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown factors that
could cause the actual results of the Company to be materially different from
the historical results or from any future results expressed or implied by such
forward-looking statements. In addition to statements which explicitly describe
such risks and uncertainties, readers are urged to consider statements labeled
with the terms "believes", "belief", "expects", "intends", "anticipates" or
"plans" to be uncertain forward-looking statements. The forward looking
statements contained herein are also subject generally to other risks and
uncertainties that are described from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission.
Three months ended September 30, 1998 compared to
the three months ended September 30, 1997
Triangle Imaging Group's, Inc. (the "Company") total revenues for the third
quarter of 1998 were $2,411,727, which is an increase of 62% over the Company's
third quarter 1997 revenues of $1,487,382. The increase resulted from the sales
from new acquisitions, increased reoccurring revenues, and the sale of services,
which can be attributed to an increase in the Company's sales force as well as
the addition of new companies to the Triangle family.
Engineered Business Systems, Inc., (EBS), a wholly owned subsidiary,
contributed sales for the third quarter 1998 in the amount of $1,689,167. Of the
EBS sales, reoccurring revenues in the CRIS(TM) and ACES(TM) product lines
constituted 67% of EBS's revenues in the third quarter 1998. Revenues from the
ACES(TM) product line contributed 67% of the reoccurring revenues for the third
quarter 1998 while the remaining 33% of revenues contributed to reoccurring
revenues were derived from the CRIS(TM) product line. Reoccurring revenues
consist of annual software maintenance contracts, technical support revenues,
software purchased on a per report basis and monthly software rental programs.
New sales of CRIS(TM) products constituted 1% of EBS's revenues for third
quarter 1998 and new sales of ACES(TM) products comprised 11% of the revenues.
Outsourcing revenues accounted for approximately 36% of EBS's revenues in third
quarter 1998, while consulting and education accounted for approximately 8% of
EBS's revenue. Other income, including interest income, comprised the remaining
3% of revenues for the third quarter 1998.
QuickCREDIT Corp., (QCC), a wholly owned subsidiary, contributed sales for
the third quarter of 1998 in the amount of $527,821. Of the QCC sales, 100% of
the revenues were derived from the sale of individual and business credit report
products. They primarily consisted of merged in-file credit reports and RMCRs
(Residential Mortgage Credit Reports.)
MultiTask Computer Systems, Inc., (MultiTask), a wholly owned subsidiary,
contributed sales for the third quarter of 1998 in the amount of $194,738. At
MultiTask, sales of computer and network hardware consisted of $122,344 while
$72,394 was due to sale of consulting services and installation charges.
The cost of revenues was $723,793 in third quarter 1998, which was an
increase from the Company's third quarter 1997 costs of $409,302. Gross profit,
$1,687,934, as a percentage of revenues was 70% in third quarter 1998 as
compared to the 72%, or $1,078,080, for the third quarter 1997. The increase in
costs and decrease in gross profit as a percentage resulted primarily from
hardware purchases, cost of increased amounts of credit reports and from
increased labor costs associated with the outsourcing business.
Selling, general and administrative expenses were $2,014,084 in the third
quarter 1998 compared to $749,567 in the 1997 comparable period, an increase of
$1,264,517 and a cost of revenues increase of 43%. Management believes that the
monetary increase in selling, general and administrative expenses were due to
the increased number in the sales force as the Company prepared for the release
of its industry leading ACES 98 and DESC software products. The increase
included the additional one-time costs of consolidating and integrating five
acquisitions which were accomplished in the second quarter of 1998, while
continuing the investment in its expanding software product lines. Adding to
that increase were the additional costs associated with the professional sales
force at EBS and the unforseen time delays associated with the development of
the new software offerings. Non-cash imputed compensation expense for the third
quarter 1998 was $47,390, compared to $23,420 for third quarter 1997.
During the quarter, the Company incurred several one-time expenses. They
included moving expenses at both MultiTask and Credit Bureau Services, the
closing of the Florida Credit Bureau, while consolidating its business into the
Jacksonville office. Also included was a new computer system and the associated
software cost, installation, and operations training for our Jacksonville office
and a R&D charge at EBS of approximately $100,000 for the development of DESC.
The Company's net income in third quarter 1998 includes non-cash expenses
of approximately $57,275 as compared to non-cash expenses of $18,604 for third
quarter 1997. Such expenses were incurred as a result of depreciation and
amortization of assets acquired with the acquisition of EBS as well as the
goodwill created in the acquisition of all of the Triangle subsidiaries. The
increase of the non-cash expenses was again primarily attributable to increased
monetary cost of revenues.
Interest expense was $24,959, in third quarter 1998, compared to $30,760 in
the third quarter 1997, reflecting interest paid on a promissory note of
$1,600,000. The promissory note, which is an 8.25%, plus $25,000 per month of
principal, with a $775,000 balloon payment due February 1, 2000, is held by the
selling shareholders of EBS, created during the sale of stock to the Company.
Minority interest for the third quarter 1998 was eliminated by the Company
acquiring the remaining 5% of the outstanding shares of Engineered Business
Systems, Inc. The acquisition completed on December 31,1997 involved the Company
purchasing the remaining 5% of the shares of Engineered Business Systems, Inc.
from minority interest holders using a combination of cash and stock.
The Company's net loss from continuing operations for third quarter 1998
was $571,087, compared to a gain of $269,664 from the third quarter 1997. This
was due to the cost of acquiring and supporting an expanded professional sales
organization to sell the ACES 98 and DESC software products, which were delayed
in their release to the marketplace. This delay also precipitated additional
corresponding development costs which occurred during the quarter. Also included
in the charge was the cost of software amortization of $67,000 for the quarter
and a charge for an increase in the allowance for doubtful accounts of $80,000.
During the third quarter, the Company rescinded the TriMax Systems, Inc.,
(TriMax) acquisition and reported a loss from discontinued operations of
$289,162. This rescission was precipitated by material information learned
during the third quarter with regard to operating TriMax as a viable entity.
TriMax was an IBM Reseller of mid-range computer hardware, which was the main
attraction to Triangle. It was learned that IBM was beginning a compliance
investigation into the sales practices of TriMax with regard to their
requirements of providing value-added services on each sale made by TriMax. This
investigation resulted in TriMax being terminated from the IBM program and
dismissed as a re-seller of IBM hardware and software products. Because these
violations occurred prior to the acquisition of TriMax by Triangle, the Company
rescinded the acquisition by agreement with TriMax. All shares of Triangle that
were issued in the TriMax acquisition were returned to the Company and canceled.
Total net income (loss) for the third quarter 1998, totaled $860,249 versus a
gain of $269,664 for the third quarter of 1997.
The Company has established a provision for a restructuring reserve in the
amount of $58,000 to cover severance expenses associated with the reduction in
force. As a result of this action, the Company will realize an annualized
reduction in expenses of approximately $360,000. At the end of the third
quarter, the Company reduced expenses and head count by reducing the Company
staff by 9%; eliminating several temporary technical positions; discontinuing
the guaranteed compensation of the sales organization; and returning the
on-going software development and maintenance to our own development team with
the completion of the outside software development efforts.
Liquidity and Capital Resources
The Company has funded the vast majority of its working capital and capital
expenditure requirements with cash provided from operations and from private
funds raised from the sale of Restricted Common Stock to employees of the
Company. The primary source of cash receipts is from payments for CRIS(TM),
ACES(TM), and outsourcing revenues and accounts receivables. The management of
the Company believes cash flows from continuing operations will be sufficient to
fund expenditures into the foreseeable future.
As of September 30, 1998, the Company had working capital of $533,846 an
increase from the working capital balance of $82,818 as of September 30, 1997.
The September 30, 1998 working capital was derived from accumulated sales of
private placement shares of common stock to employees of the Company totaling
$1,525,316 for the nine months ended September 30, 1998. Cash resources were
used to fund QuickCREDIT Corp., following the acquisitions of Credit Bureau
Services, Inc., Florida Credit Bureau, Inc., and EJG Services, Inc., as well as
for working capital for TriMax Systems, Inc., and MultiTask Computer Systems,
Inc.
In October, the Company completed a financing for $1.5 million with
Waterside Capital Corporation, (Waterside) a Virginia based (SBIC) small
business investment company. The Company has agreed to issue 1,500 shares of
Class C Preferred Stock with a dividend rate of 12.5% per annum. The shares are
redeemable by the Company at any time without penalty. The preferred shares will
be redeemed by the Company at the end of a five-year period. Additionally,
500,000 warrants were issued to Waterside. Each warrant entitles Waterside to
purchase one share of common stock in the Company at prices ranging from $2.15
to $3.00 per share. In light of the fact that the Company was not able to
lawfully assign rights and preferences to a class of preferred stock under its
Articles of Incorporation, the Company issued to Waterside a promissory note
(Note) in the aggregate principal amount of $1,500,000 in lieu of issuing the
preferred stock at closing. The Note bears interest at the rate of 14% per
annum; provided, however, that should the Company issue to Waterside the shares
of the Company's Series C Preferred Stock contemplated in the transaction prior
to January 15, 1998, all of the Company's obligations under the Note, including
without limitation its obligation to pay interest, shall terminate. Each of the
Company's subsidiaries has guaranteed the Note. The proceeds of this financing
were used to reduce the outstanding note payable to the former owners of EBS by
an amount of $375,000, and the balance was used for working capital and to
accelerate the development of our current software development projects.
In early November, the latest releases of ACES 98, DESC and our QuickCREDIT
for Windows software programs were all released and fully paid for and reported
in good working order.
Year 2000
The Company recognizes that a challenging problem exists in that many
computer systems worldwide do not have the capability of recognizing the year
2000 or the years thereafter. No easy technological "quick fix" has yet been
developed for this problem. The Company has spent a considerable sum of money to
assure that all its software programs are year 2000 compliant and believes that
they all are. This "Year 2000 Computer Problem" creates risk for the company
from unforeseen problems in its own software and from third parties with whom
the company deals. Such failures of the Company and/or third parties' computer
systems could have a material adverse effect on the Company and its ability to
conduct its business in the future.
Inflation
The Company does not believe that inflation has had a material adverse
effect on sales or income during the past several years. Increases in the cost
of supplies and services, or other operating costs, could adversely affect the
Company's operations; however, the Company believes it could increase prices to
offset increases in costs of goods sold or other operating costs.
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
During the three months ended September 30, 1998, the Company sold 296,712
shares of common stock resulting in proceeds of $596,957. During the three
months ended September 30, 1998, 20,000 stock options were exercised resulting
in the issuance of 20,000 shares of common stock and proceeds of $17,500.
Item 6. Exhibit and Reports on Form 8-K
A. Exhibits
None.
B. Report on Form 8-K
Form 8-K dated April 30, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TRIANGLE IMAGING GROUP, INC.
Dated: 11/30/1998 By: /s/ Vito Bellezza
Vito Bellezza
President, Chairman of the Board,
Chief Financial Officer, Chief Executive
Officer and Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000764763
<NAME> Triangle Imaging Group, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE> 1
<CASH> 278,013
<SECURITIES> 0
<RECEIVABLES> 1,729,181
<ALLOWANCES> 160,000
<INVENTORY> 35,957
<CURRENT-ASSETS> 2,197,523
<PP&E> 1,012,018
<DEPRECIATION> 765,818
<TOTAL-ASSETS> 7,028,279
<CURRENT-LIABILITIES> 1,663,677
<BONDS> 0
<COMMON> 12,912
0
0
<OTHER-SE> 4,368,690
<TOTAL-LIABILITY-AND-EQUITY> 4,381,602
<SALES> 0
<TOTAL-REVENUES> 6,286,172
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<OTHER-EXPENSES> 4,935,660
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87,867
<INCOME-PRETAX> (678,087)
<INCOME-TAX> (107,000)
<INCOME-CONTINUING> (571,087)
<DISCONTINUED> (289,162)
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<EPS-PRIMARY> (.07)
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</TABLE>
