FORM 10-QSB
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
[ ] 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 0-14937
PMC INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0627374
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
555 17th Street, 14th Floor, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
(303) 292-1177
(Issuer's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of September 30, 1995.
Common Stock $0.01 Par Value 5,555,713
Class Number of Shares
Transitional Small Business Disclosure Format
Yes No X
Page 1 of 15 Pages
Exhibit Index on Page 13
<PAGE>
PMC INTERNATIONAL, INC.
INDEX
PART I. Financial Information Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
-- September 30, 1995 and December 31, 1994 4
Condensed Consolidated Statements of Income 5
-- Three months ended September 30, 1995
and September 30, 1994; Nine months ended
September 30, 1995 and September 30, 1994
Condensed Consolidated Statements of Cash Flow 6
-- Nine months ended September 30, 1995
and September 30, 1994
Notes to Unaudited Condensed Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of
Operations
PART II. Other Information
Item 3. Defaults Upon Senior Securities 12
Item 6. Exhibits and Reports on Form 8-K 13
Signature Page 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Note 1)
PMC INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
September 30, December 31,
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 209,697 $ 139,918
Receivables
Receivable from customers 47,271 4,196
Investment management fees 22,752 71,818
Other receivables 117,803 81,210
TOTAL 397,523 297,142
SECURED DEMAND NOTE 225,000 225,000
FURNITURE AND EQUIPMENT, at cost,
net of accumulated depreciation of
$285,664 and $206,664 (Note 2) 733,180 340,669
PREPAID EXPENSES AND OTHER ASSETS 277,995 230,114
GOODWILL (net of amortization of 46,678
and $29,173) 303,322 320,827
LONG TERM NOTE RECEIVABLE 944,073 1,166,181
TOTAL ASSETS $2,881,093 $2,579,933
See notes to unaudited condensed consolidated financial statements
<PAGE>
PMC INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
September 30, December 31,
1995 1994
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 732,259 $ 604,092
Accrued expenses 791,326 712,857
Other liabilities 88,355 106,990
Deferred revenue 391,444 374,001
Notes payable to shareholders 23,585 45,000
Liabilities subordinated to claim
of general creditors 225,000 225,000
TOTAL CURRENT LIABILITIES 2,251,969 2,067,940
LONG-TERM DEBT (Note 3) 1,200,000 -0-
TOTAL LIABILITIES 3,451,969 2,067,940
SHAREHOLDERS' EQUITY
Preferred stock, no par value -
authorized 5,000,000 shares;
issued & outstanding, 349,017
shares and 349,017 shares 872,543 872,543
Common stock, $.01 par value -
authorized 50,000,000 shares;
issued and outstanding,
5,555,713 shares and 5,540,501
shares 276,564 276,564
Additional paid-in capital 3,637,689 3,637,689
Accumulated deficit (5,357,672) (4,274,803)
TOTAL SHAREHOLDERS' EQUITY (570,876) 511,993
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,881,093 $ 2,579,933
See notes to unaudited condensed consolidated financial statements.
<PAGE>
PMC INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
REVENUE: 1995 1994 1995 1994
Investment management fees $2,243,937 $2,097,370 $6,427,790 $6,338,002
Trading income 25,041 19,035 77,518 270,793
Other income 81,640 94,835 261,812 265,308
Total revenue 2,350,618 2,211,240 6,767,120 6,874,103
EXPENSES:
Investment manager and
other fees 1,342,520 1,281,867 3,693,525 3,734,664
Salaries and benefits 593,269 576,099 1,677,282 1,715,915
Clearing charges and user
fees 188,198 197,481 575,063 655,209
Advertising and promotion 164,783 154,355 442,404 423,458
General and administrative 139,939 217,968 346,107 552,099
Office supplies expense 42,024 30,892 128,000 105,947
Occupancy and equipment costs 163,903 122,390 440,573 280,692
Professional fees 351,148 357,064 547,035 563,551
Total expenses 2,985,784 2,938,116 7,849,989 8,031,535
NET LOSS BEFORE
INCOME TAXES $(635,166) $(726,876) $(1,082,869) $(1,157,432)
DEFERRED INCOME
TAX BENEFIT - - - 11,594
NET LOSS $(635,166) $(726,876) $(1,082,869) $(1,145,838)
NET LOSS
PER COMMON SHARE $ (0.12) $ (0.13) $ (0.21) $ (0.21)
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 5,549,595 5,538,637 5,543,902 5,537,654
See notes to unaudited condensed consolidated financial statements.
<PAGE>
PMC INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $(1,082,869) $(1,145,838)
Adjustments to reconcile net income/(loss)
to net cash provided by (used in)
operating activities:
Deferred income tax benefit (11,594)
Accretion of discount on notes receivable (63,968) (56,777)
Loss on sale of marketable securities 2,201
Depreciation and amortization 96,505 74,505
Changes in operating assets and liabilities
Receivable from customers (43,075) 20,767
Investment management fees receivable 49,066 156,091
Other receivables (36,593) (29,136)
Prepaid expenses and other assets (47,881) (35,350)
Accounts payable 128,167 411,836
Accrued expenses 78,469 133,344
Other liabilities (18,635) (5,904)
Deferred revenues 17,44 111,133
Net cash provided by (used in)
operating activities (923,371) (374,722)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment (471,511) (201,898)
Reduction of long-term note receivable 286,076 234,881
Proceeds from sale of marketable securities 50,262
Net cash provided by (used in) investing
activities (185,435) 83,245
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable to shareholders (21,415)
Issuance of convertible debt 1,200,000
Increase to additional paid-in capital 15,053
Net cash provided by financing activities 1,178,585 15,053
NET INCREASE (DECREASE) IN CASH 69,779 (276,424)
CASH, at beginning of period 139,918 407,444
CASH, at end of period 209,697 131,020
See notes to unaudited condensed consolidated financial statements
<PAGE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Nine Months Ended
September 30,
1995 1994
Cash paid for interest $44,310 $20,014
See notes to Unaudited Condensed Consolidated Financial Statements
<PAGE>
PMC INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB
and Regulation S-B. In the opinion of management, all adjustments
(consisting of normal accruals and elimination of intercompany accounts
and transactions) considered necessary for a fair presentation have been
included. The unaudited condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-KSB
for the year ended December 31, 1994.
Note 2 FURNITURE AND EQUIPMENT
The Company has invested approximately $320,000 during 1995 in hardware and
capitalizable software development related to the Allocation Manager product
which is more fully described in the "Management Discussion" section herein.
Certain outside services which the Company has utilized in the past are
being replaced by internal systems which have required additional capital
expenditures of approximately $100,000. The Company provides for
depreciation of fixed assets on the straight line and declining balance
methods based on estimated useful lives of three to seven years.
Note 3 LONG TERM DEBT
Effective July 26, 1995, the Company borrowed $1.2 million from Bedford
Capital Financial Corporation ("Bedford"). The loan bears interest at the rate
of 8.5% per annum and payments of interest only commence in August 1996. The
loan is due and payable on July 26, 2000. The loan is secured by all of the
Company's assets. In connection with the loan, Bedford received a warrant to
purchase 1.2 million shares of the Company's common stock at an exercise price
of $1.00 per share at any time prior to July 26, 2000, subject to certain
conditions. The warrant can be exercised by Bedford by applying the out-
standing balancing of the loan to the exercise price of the warrant.
Bedford also obtained an option to lend an additional $1.8 million to the
Company under substantially the same terms as the original loan, until
July 1, 1996 or until 30 days after a settlement is reached regarding the
pending Securities and Exchange Commission investigation of the Company,
whichever occurs first. See the Company's Form 8-K Report filed August 11,
1995 for additional information on the transaction.
Note 4 SUBSEQUENT EVENTS
On November 1, 1995, David L. Andrus joined the Company as Executive Vice
President of PMC International, Inc. ("PMCI") and President of Portfolio
Technology Services, Inc. ("PTS"), the Company's wholly-owned subsidiary.
Mr. Andrus has been a member of the Company's Board of Directors since
July of this year.
Mr. Porter Bibb, Managing Director in the Corporate Finance Department of
Ladenburg, Thalmann and Co., Inc. was elected to fill the fifth seat on
the PMCI Board of Directors in late September and has become actively
involved in that capacity in the fourth quarter.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Financial Analysis
PMC International, Inc.'s ("PMCI" or "the Company") consolidated
revenues are currently generated through its subsidiaries Portfolio Management
Consultants, Inc. ("PMC") and Portfolio Brokerage Services, Inc. ("PBS")
although investments into its newest subsidiary Portfolio Technology
Services, Inc. ("PTS") are expected to begin generating revenues for the
Company during late 1995 or early 1996. Currently, the Company's revenues
are primarily derived from fees charged to clients for certain investment
advisory, broker-dealer, portfolio administration and reporting services
("Investment Management Fees") which generally are collected in advance on
a quarterly basis from each of its clients. PMCI's Investment Management
Fees, which are collected as a percentage of client assets, are determined
by the net assets under management. Fees are impacted by the extent to which
the Company attracts new, or loses existing Clients, the appreciation or
depreciation of the U.S. and International equity and fixed income markets,
and the type and size of accounts and the corresponding differences in fee
schedules.
During the first nine months of 1995 the U.S. equity markets, as measured
by the Standard & Poors 500 Stock Index, increased in value by 29.8% and the
U.S. bond markets, as measured by Lehman Brothers Government and Corporate
Bond Index, increased by 13.9%. PMCI's net assets under management at
September 30, 1995 were comprised of approximately 65% in the equity markets
and 35% in the fixed income markets. PMCI's Investment Management Fees
for the nine months ending September 30, 1995 were $6,427,790 vs. $6,338,002
for the same period in 1994.
The Company's total revenues for the first nine months of 1995 were
$6,767,120 vs. $6,874,103 for the same period in 1994, representing a 2%
decrease which is largely the result of discontinuation of principal trading
activities in April of 1994. Revenues generated from principal trading in
the first quarter of 1994 were approximately $200,000. Asset growth through
the net addition of new Clients and favorable market conditions continue to
mitigate the loss of revenues from such trading activities.
PMCI's total expenses for the nine months ended September 30, 1995,
were $7,849,989 as compared to $8,031,535 in total expenses for the
corresponding period in 1994. That portion of the Investment Management
Fees paid to investment advisers who render specific investment advice on a
discretionary basis ("Portfolio Manager"), broker dealer and/or investment
adviser agents who service the client ("Financial Adviser") and custodial
fees for these periods accounted for 47% of total expenses.
Of PMCI's loss of $1,082,869 for the first nine months of 1995, a
substantial portion was attributable to non-recurring expenses:
1. Developmental and start-up marketing costs
for Allocation Manager $ 300,000
2. Capital-raising efforts 255,000
3. SEC investigation 112,000
4. One-time custody expenses 50,000
$ 717,000
The addition of approximately 9,000 square feet of office space to
the Company's already existing 9,000 square feet in July of 1994 accounts
for the Company's increased rent expense for the nine months ended
September 30, 1995 as compared to the comparable period in 1994.
<PAGE>
Management Discussion
PMCI's financial condition continued to be impacted during the third
quarter of 1995 from the effects of an SEC investigation that began in
November, 1993 as well as the legal and offering costs associated with
capital raising activities discussed last quarter and below. Although
management believes it is making progress towards a settlement of the SEC
matter, legal fees, corporate down-sizing and the impact of the investigation
on the Company's business development efforts during 1994 and much of 1995
are still evident.
In spite of these difficulties, a number of positive events occurred at
PMCI during the third quarter which indicate that the Company has improving
prospects for growth and economic stability. First, PMC announced in its
second quarter 1995 Form 10-QSB, in the "Subsequent Events" section, that it
had completed the initial stage of a two-stage funding with Bedford Capital
Financial Corporation ("Bedford"). The funding, which was arranged through
the Company's investment banker Ladenburg, Thalmann and Co. Inc., provided an
initial injection of $1.2 million, structured as subordinated debt. The
debt bears interest at the rate of 8.5% per annum and monthly payments of
interest only commence in August 1996. Principal and accrued interest are
due in full on July 26, 2000. Bedford also received a warrant to purchase
one share of PMCI common stock at $1.00 per share for each dollar of
debt. The warrant can be exercised by Bedford by applying PMCI's
outstanding debt to the exercise price of the warrant. Under the terms of
the funding, Bedford has an option to invest an additional $1.8 million into
PMCI under substantially the same terms as the original funding for a period
of one year from the date of the July transaction or for a period of 30 days
after the settlement of the current SEC matter, whichever occurs first. (For
further information on the Bedford funding, see footnote 3 to the Company's
interim financial statements, above, and the Company's Form 8-K Report filed
August 11, 1995.) If Bedford does not elect to exercise its option to further
fund the Company, PMCI Management believes there are other viable prospects for
future funding.
As was also disclosed in the "Subsequent Events" section of the second
quarter Form 10-QSB, PMCI's President and founder, Kenneth S. Phillips,
was named Chief Executive Officer in addition to his continuing role as
President. Also during the third quarter, the Company's former Chairman,
Director and Chief Executive Officer left the Company, two of the former
Board members stepped down, and three new Board members were appointed.
Specifically, Mr. J.W. Nevil Thomas and Mr. Bill Atkinson of Bedford joined
the PMCI Board as did Mr. David L. Andrus. Also, Mr. Porter Bibb, a
Managing Director in the Corporate Finance Department of Ladenburg, Thalmann
and Co., Inc., the Company's investment banking firm, was elected to fill the
fifth seat on the PMCI Board of Directors in September, 1995.
Although much of Management's time during 1995 was dedicated to
completing a successful funding, the Company made substantial progress in
connection with the completion and release of Allocation Manager - trademark -
("AM"), the Company's PC based mutual fund investment program. Several
additions to PMCI's executive staff were made which substantially added to
PMCI's management, marketing, product development and sales depth. As
disclosed in PMCI's second quarter Form 10-QSB, Ms. Carolyn E. Kling joined
PMC (a wholly-owned subsidiary of PMCI) to lead the Company's new business
development, marketing and sales efforts. Prior to joining PMC, Ms. Kling
was President of Transamerica Fund Management Company. Before joining
Transamerica, Ms. Kling was Senior Vice President of Putnam Investments,
directing their business development and marketing efforts in the western
half of the U.S. Ms. Kling joined PMC as a Senior Vice President and
Managing Director and will spend her time developing new sales channels and
restructuring the Company's wholesale marketing and domestic sales efforts.
<PAGE>
Also during the third quarter, Mr. David L. Andrus joined the Company
as a Director, and effective November 1, 1995, became an Executive Vice
President of PMCI and President of Portfolio Technology Services, Inc.
("PTS"), a wholly-owned subsidiary of the Company. Prior to joining PMCI
and PTS, Mr. Andrus was Chairman of Netwise, Inc., a Boulder, Colorado based,
international software development company specializing in "middle ware"
development for client server and enterprise applications. Mr. Andrus had
been working as a consultant to PMC for the past two years.
Significant progress was made during the third quarter toward sales of
the new AM product which is planned for release during the fourth
quarter of 1995. In a joint project with Fidelity Investment's wholly owned
subsidiary, National Financial Correspondent Services ("NFCS"), Fund
Counselor -trademark-, a customized version of PMC's AM product, was
announced for fourth quarter 1995 release. NFCS is marketing Fund Counselor,
- -trademark- pursuant to a non-exclusive arrangement with PMC, to its more
than 225 bank, insurance and regional broker/dealer clients. In addition,
Management believes that there are several near-term prospects in connection
with the AM product which would be advantageous for the Company. Although
it is premature to predict the extent to which AM will impact PMC's revenues
and earnings during 1996 and forward, preliminary industry response has been
favorable to the product and Management believes its decision to invest in
this product during 1995, despite the Company's cash flow difficulties, will
prove to be beneficial. However, there can be no assurance that the AM
product will prove to be successful or profitable for the Company.
Also in connection with new product development, the Company agreed with
NFCS to provide performance reporting and portfolio accounting to NFCS
brokerage clients wishing to receive performance evaluations and reports in
addition to their traditional monthly account statements. Known by NFCS
clients as the "MAPS Tool Box", the reports will allow clients of NFCS's
correspondents who do not otherwise have a relationship with PMC, to benefit
from PMC's expertise in the production of high quality, full color reporting.
The Company will operate in the nature of a "service bureau" in connection
with this product and charge a fee on a per account, per quarter basis.
The fee charged by PMC will not be an asset based fee and PMC will
not act as an investment advisor or broker/dealer to these customers.
Management believes that the trend in the financial services industry is to
place substantial emphasis on reporting and evaluation services, and this
additional opportunity to work with NFCS both enhances its relationship with
one of the largest financial services company in the world and provides an
excellent business opportunity for PMC.
Professional fees continued to negatively and significantly impact
PMCI's balance sheet during the third quarter. Although legal fees in
connection with the SEC matter (disclosed in PMCI's 1994 Form 10-KSB and
subsequently in each Form 10-QSB), have been decreasing, the legal costs
related to the Bedford funding were substantial due to the complicated nature
of the transaction. Effective September 1, 1995, the Company hired in-house
counsel and Management believes this will help streamline and contain legal
expenses. Management is hopeful that a resolution of the SEC matter will be
reached in the near term, although there can be no assurances that this will
be accomplished, and the restructuring of PMC's Board of Directors and senior
management should allow PMCI to focus on new business and product development
in the near future.
PMCI continues to receive the vast majority of its revenues from its
wholly-owned subsidiary PMC. PMC is primarily an independent provider of
privately managed account and "wrap-fee" services. Targeted towards middle
market investors with between $500,000 and $50 million, PMC distributes its
services through a network of banks, insurance companies and independent
financial planners, both under its own name and pursuant to private label
agreements. Lack of capital has limited PMC's recent expansion although
historically PMC has enjoyed growth in assets under management as a result
of its marketing and distribution agreements. Ms. Carolyn Kling, PMC's
<PAGE>
new Managing Director for business development and sales, is in the process
of structuring a new, wholesale marketing effort. In connection with her
efforts, Mr. Daniel Shore, formerly the South East U.S. Director of Putnam
Investment's marketing group, joined PMC as a Vice President, effective
October 1, 1995. Mr. Shore has more than ten years experience in the
marketing and selling of financial products. Mr. Shore will be responsible
for business development and new sales on the East Coast, where he will be
based. PMC plans to add a West Coast representative in the near future.
Liquidity and Capital Resources
The five year subordinated debt agreement with Bedford Capital
Financial Corporation provided $1,200,000 in cash to PMCI on July 31, 1995.
PMCI used much of this cash to fund further development of its new products,
retire a $300,000 bridge loan which was incurred in March, 1995, fund cash
flow deficiencies and purchase the computer hardware and software necessary
to support the new product commitments outlined above. The Company hopes to
complete the second portion of the Bedford funding in the near future or, if
such funding is not completed, continue capital formation efforts and
strengthen the balance sheet as necessary. The Company continues to
experience a cash flow deficiency which is not expected to be resolved by the
Company's continuing operations over the next 3 to 6 months. There can be
no assurance that internal or external sources of liquidity will be
available to meet the Company's cash flow requirements. In the absence of
such funds, PMCI's marketing and sales efforts will be hampered with an
expected corresponding decrease in revenues, and an adverse impact on the
Company's prospects for profitability. Management believes that the Company's
prospects for additional capital have been improved as a result of the third
quarter activities described above.
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Holders of Preferred Stock are entitled to receive dividends
at a rate of $0.325 per share per annum (equal to 13% of the purchase
price per share attributable to the Preferred Stock). Dividends are payable
semi-annually on January 15 and July 15 in each year commencing July 15, 1991.
Dividends accrue from the date of the Preferred Stock issuance and are
cumulative. Upon liquidation or dissolution of the Company, holders of
Preferred Stock are entitled to a preference over the holders of Common
Stock in an amount per share equal to the original purchase price attributed
to a share of Preferred Stock ($2.50) plus all unpaid cumulative dividends.
The Preferred Stock is non-participating and the holders of Preferred Stock
have no preemptive rights and no voting rights except as may be required
by Colorado law. At the option of the Company, the Preferred Stock may be
redeemed in whole, or in part, at a price of $2.75 per share, plus unpaid
cumulative dividends. Redemption can only occur if certain conditions
regarding the bid prices of the Company's common stock and the Company's
after-tax earnings are met. No preferred dividends have been paid since
July 15, 1991, and as of July 15, 1995, cumulative dividends in arrears
totaled $470,146.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Number Exhibit Page Number
(27) Financial Data Schedule 15
B. An 8-K Report was filed on August 11, 1995 regarding the
completion of the subordinated debt agreement with Bedford
Capital Financial Corporation and the resultant changes in
the management and control of registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
PMC INTERNATIONAL, INC.
REGISTRANT
Date: November 13, 1995 /S/ Kenneth S. Phillips
Kenneth S. Phillips
President, Chief Executive Officer
Date: November 13, 1995 /S/ Vali Nasr
Vali Nasr
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 209,697
<SECURITIES> 0
<RECEIVABLES> 1,356,899
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 581,317
<PP&E> 1,018,844
<DEPRECIATION> (285,664)
<TOTAL-ASSETS> 2,881,093
<CURRENT-LIABILITIES> 3,451,969
<BONDS> 0
<COMMON> 276,564
0
872,543
<OTHER-SE> (1,719,983)
<TOTAL-LIABILITY-AND-EQUITY> 2,881,093
<SALES> 6,767,120
<TOTAL-REVENUES> 6,767,120
<CGS> 3,693,525
<TOTAL-COSTS> 3,693,525
<OTHER-EXPENSES> 4,093,904
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62,560
<INCOME-PRETAX> (1,082,869)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,082,869)
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<EXTRAORDINARY> 0
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<NET-INCOME> (1,082,869)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
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