<PAGE> 1
US SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended ___9-30-99___
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE EXCHANGE ACT
For the transition period from___________to____________
Commission file number ______2-97210-NY_____________
CVD EQUIPMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
11-2621692
(IRS Employer Identification Number)
1881 LAKELAND AVENUE, RONKONKOMA, NY 11779
(Address of principal executive offices)
516-981-7081
(Issuers Telephone Number)
(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 past 12 months (or for
such shorter periods 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes____No____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
2,918,750 SHARES OF COMMON STOCK, $.01 PAR VALUE AS OF 11-15-99
<PAGE> 2
CVD EQUIPMENT CORPORATION
NOTE TO FINANCIAL STATEMENTS
FOR THE QUARTER ENDING
SEPTEMBER 30, 1999
BASIS OF FINANCIAL STATEMENTS
The financial data is subject to year end audit and does not claim to be a
complete presentation since note disclosure under generally accepted
accounting procedures is not included. Note disclosures required under
generally accepted accounting procedures are included in the Company's
audited financial statements filed as part of Form 10-KSB for the year ended
December 31, 1998. Form 10-QSB should be read in conjunction with these
financial statements.
The results of operations for the three months are not necessarily indicative
of those for the full year. In the opinion of management, the accompanying
unaudited financial statements contain all adjustments necessary to fairly
present the financial position and the results of operation for the periods
indicated.
<PAGE> 3
MANAGEMENT'S DISCUSSION
INTRODUCTION
Statements contained in this Report on Form 10-QSB that are not historical
facts are forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, including without limitation,
statements regarding industry trends, strategic business development, pursuit
of new markets, competition, results from operations, and are subject to the
safe harbor provisions created by that statute. A forward-looking statement
may contain words such as "intends", "plans", "anticipates", "believes",
"expect to", or words of similar import. Management cautions that
forward-looking statements are subject to risks and uncertainties that could
cause the Company's actual results to differ materially from those projected.
These risks and uncertainties include, but are not limited to, marketing
success, product development, production, technological difficulties,
manufacturing costs, and changes in economic conditions in the markets the
Company serves. The Company undertakes no obligation to release revisions
to forward-looking statements to reflect subsequent events, changed
circumstances, or the occurrence of unanticipated events.
FORWARD LOOKING STATEMENTS
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations 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 factors which may cause the actual results,
performance, or achievements of the Company to be materially different from
any future results, performance, or achievements expressed or implied by such
forward looking statements. These forward looking statements were based on
various factors and were derived utilizing numerous important assumptions and
other important factors that could cause actual results to differ materially
from those in the forward looking statements. Important assumptions and
other factors that could cause actual results to differ materially from those
in the forward looking statements, include, but are not limited to:
competition in the Company's existing and potential future product lines of
business; the Company's ability to obtain financing on acceptable terms if
and when needed; uncertainty as to the Company's future profitability,
uncertainty as to the future profitability of acquired businesses or product
lines, uncertainty as to any future expansion of the company. Other factors
and assumptions not identified above were also involved in the derivation of
these forward looking statements, and the failure of such assumptions to be
realized as well as other factors may also cause actual results to differ
materially from those projected. The Company assumes no obligation to update
these forward looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward looking
statements.
<PAGE> 4
YEAR 2000
The "Year 2000" issue is a result of computer systems that were programmed in
prior years using a two digit representation for the year. Consequently, in
the Year 2000, date sensitive computer programs may interpret the date "00"
as 1900 rather than 2000. The Company has completed an assessment of its
systems and those of our new Stainless Design Concepts division affected by
the Year 2000 issue and made the following determinations;
1. Readiness;
* Internal custom software - all internal software has been upgraded and is
now Year 2000 compliant.
* Computers (hardware) - all hardware is now Year 2000 compliant.
* External standard software - all external software used is now Year 2000
compliant.
* We have no manufacturing equipment with embedded technology (Non-IT), to
cause a Year 2000 problem.
* Manual back-up systems are easily implemented in all areas in the event of
a Year 2000 problem.
* The Company relies on third party service providers for services such as
telecommunications, Internet service and utilities. Interruption of these
services due to Year 2000 issues could affect the Company's operations.
* A review of our significant component suppliers to determine the extent to
which the Company is Year 2000 vulnerable has determined that sufficient
alternate suppliers are available.
* A review of our customer base does not indicate that a Year 2000 issue
should significantly adversely affect new order levels.
2. The costs to address the company's Year 2000 issues;
* Based upon the company's current evaluation, there should be no significant
additional cost incurred with achieving Year 2000 compliance.
* Costs for software and hardware to achieve Year 2000 compliance at
Stainless Design Concepts division has not been significant. By using the
same internal and external software as the parent company we have been able
to achieve Year 2000 compliance rapidly and at minimum cost.
3. The risks of the company's Year 2000 issues;
* At this point in time, the company believes that it has minimum or no
exposure to Year 2000 problems.
4. The company's contingency plans;
* All systems can be manually backed up and the company can change suppliers
if required for purchases.
The conclusions herein are forward-looking statements and are based on
management's best estimates of future events. Risks of having a Year 2000
problem include the ability to discover and correct potential Year 2000
sensitive problems and the ability of third party service providers to bring
their systems into Year 2000 compliance.
<PAGE> 5
CVD EQUIPMENT CORPORATION
BALANCE SHEETS
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SEPTEMBER 31-Dec
1999 1998
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 143,565 $ 127,489
ACCOUNTS RECEIVABLE 1,011,427 347,126
COST IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS 450,594 1,180,253
SECURITIES AVAILABLE-FOR-SALE 317,250 1,018,340
INVENTORY 467,916 422,280
PREPAID INCOME TAXES 16,932 60,540
OTHER CURRENT ASSETS 53,253 33,212
------------ ------------
TOTAL CURRENT ASSETS 2,460,937 3,189,240
PROPERTY, PLANT AND EQUIPMENT 2,264,234 832,171
DEFERRED TAX ASSET 140,082 140,082
OTHER ASSETS 168,854 151,713
------------ ------------
TOTAL ASSETS $ 5,034,107 $ 4,313,206
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
SHORT-TERM BORROWINGS $ 86,500 $ 300,000
ACCOUNTS PAYABLE 148,378 67,156
ACCRUED EXPENSES 228,159 144,972
BILLINGS IN EXCESS OF COSTS ON UNCOMPLETED CONTRACTS - 46,993
DEFERRED TAX LIABILITY - 5,905
CURRENT MATURITIES OF LONG-TERM DEBT 16,316 4,004
------------ ------------
TOTAL CURRENT LIABILITIES 479,353 569,030
LONG-TERM DEBT 984,173 17,137
------------ ------------
1,463,526 586,167
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
COMMON STOCK - $0.01 PAR - SHARES AUTHORIZED 10,000,000;
ISSUED & OUTSTANDING 2,918,750 29,188 29,188
ADDITIONAL PAID-IN CAPITAL 2,784,060 2,784,060
RETAINED EARNINGS 779,538 901,356
ACCUMULATED OTHER COMPREHENSIVE INCOME (22,205) 12,435
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 3,570,581 3,727,039
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 5,034,107 $ 4,313,206
============ ============
</TABLE>
<PAGE> 6
CVD EQUIPMENT CORPORATION
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1999 1998
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
REVENUES
REVENUE ON COMPLETED CONTRACTS $ 1,419,793 $ 502,268
REVENUE ON UNCOMPLETED CONTRACTS 294,176 196,731
------------ ------------
TOTAL REVENUES 1,713,969 698,999
------------ ------------
COSTS OF REVENUES
COST ON COMPLETED CONTRACTS 873,071 238,696
COST ON UNCOMPLETED CONTRACTS 210,499 214,527
------------ ------------
TOTAL COSTS OF REVENUES 1,083,570 453,223
------------ ------------
GROSS PROFIT 630,399 245,776
------------ ------------
OPERATING EXPENSES
SELLING AND SHIPPING 150,679 33,154
GENERAL AND ADMINISTRATIVE 333,517 196,185
------------ ------------
TOTAL OPERATING EXPENSES 484,196 229,339
------------ ------------
OPERATING INCOME 146,203 16,437
------------ ------------
OTHER INCOME (EXPENSE)
INTEREST INCOME 8,444 19,975
INTEREST EXPENSE (19,008) (346)
GAIN ON SALE OF LAND - -
OTHER INCOME (7,418) (415)
------------ ------------
TOTAL OTHER INCOME(LOSS) (17,982) 19,214
------------ ------------
INCOME BEFORE TAXES 128,221 35,651
INCOME TAX BENEFIT (PROVISION) - (7,907)
------------ ------------
NET INCOME 128,221 27,744
OTHER COMPREHENSIVE INCOME, NET OF TAX
UNREALIZED LOSS ON SECURITIES AVAILABLE FOR SALE (15,845) -
------------ ------------
COMPREHENSIVE INCOME $ 112,376 $ 27,744
============ ============
EARNINGS PER SHARE
BASIC $ 0.04 $ 0.01
DILUTED $ 0.04 $ 0.01
WEIGHTED AVERAGE SHARES
BASIC 2,918,750 2,918,750
DILUTED 2,989,114 2,993,776
</TABLE>
<PAGE> 7
CVD EQUIPMENT CORPORATION
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1999 1998
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
REVENUES
REVENUE ON COMPLETED CONTRACTS $ 3,001,719 $ 855,157
REVENUE ON UNCOMPLETED CONTRACTS 941,452 1,715,049
------------ ------------
TOTAL REVENUES 3,943,171 2,570,206
------------ ------------
COSTS OF REVENUES
COST ON COMPLETED CONTRACTS 2,165,780 625,024
COST ON UNCOMPLETED CONTRACTS 533,178 1,139,450
------------ ------------
TOTAL COSTS OF REVENUES 2,698,958 1,764,474
------------ ------------
GROSS PROFIT 1,244,213 805,732
------------ ------------
OPERATING EXPENSES
SELLING AND SHIPPING 432,038 118,870
GENERAL AND ADMINISTRATIVE 934,988 602,340
------------ ------------
TOTAL OPERATING EXPENSES 1,367,026 721,210
------------ ------------
OPERATING INCOME(LOSS) (122,813) 84,522
------------ ------------
OTHER INCOME (EXPENSE)
INTEREST INCOME 38,279 54,025
INTEREST EXPENSE (35,529) (959)
GAIN ON SALE OF LAND - 164,442
OTHER INCOME (2,312) 1,871
------------ ------------
TOTAL OTHER INCOME 438 219,379
------------ ------------
INCOME(LOSS) BEFORE TAXES (122,375) 303,901
INCOME TAX BENEFIT (PROVISION) 556 (76,013)
------------ ------------
NET INCOME (LOSS) (121,819) 227,888
OTHER COMPREHENSIVE INCOME, NET OF TAX
UNREALIZED LOSS ON SECURITIES AVAILABLE FOR SALE (34,640) -
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (156,459) $ 227,888
============ ============
EARNINGS PER SHARE
BASIC $ (0.04) $ 0.08
DILUTED $ (0.04) $ 0.08
WEIGHTED AVERAGE SHARES
BASIC 2,918,750 2,918,750
DILUTED 2,991,337 2,995,458
</TABLE>
<PAGE> 8
CVD EQUIPMENT CORPORATION
STATEMENT OF CASH FLOWS
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1999 1998
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 128,221 $ 27,744
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH USED IN OPERATING ACTIVITIES:
DEFERRED TAX PROVISION (BENEFIT) - -
DEPRECIATION AND AMORTIZATION 58,208 52,409
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLES (620,429) (187,478)
COST IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS 56,506 231,951
INVENTORY (19,714) (4,257)
PREPAID INCOME TAXES 50,794 64,552
OTHER CURRENT ASSETS (25,365) (44,424)
OTHER ASSETS 465 (70,299)
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE (83,099) (124,917)
ACCRUED EXPENSES 83,584 (36,921)
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (370,829) (91,640)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
PROCEEDS FROM DISPOSITION OF LAND - -
CAPITAL EXPENSE.EQUIPMENT (42,143) (32,138)
CAPITAL EXPENSE... BUILDING (108,000) -
SALE OF SECURITIES 150,000 -
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (143) (32,138)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
PROCEEDS - CURRENT 89,498 69
PROCEEDS (PAYMENT) - LONGTERM 79,468 (1,210)
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 168,966 (1,141)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (202,006) (124,919)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE QUARTER 345,571 962,123
------------ ------------
CASH AND CASH EQUIVALENTS AT THE END OF THE QUARTER $ 143,565 $ 837,204
============ ============
</TABLE>
<PAGE> 9
CVD EQUIPMENT CORPORATION
STATEMENT OF CASH FLOWS
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1999 1998
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) $ (121,819) $ 227,888
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 172,628 109,820
GAIN ON DISPOSITION OF LAND - (164,442)
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLES (664,301) (69,630)
COST IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS 729,659 167,299
INVENTORY (45,636) 51,500
PREPAID INCOME TAXES 43,606 64,552
OTHER CURRENT ASSETS (9,492) 6,791
OTHER ASSETS (40,550) (131,554)
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE 81,222 (30,189)
ACCRUED EXPENSES 83,186 22,887
BILLINGS IN EXCESS OF COSTS ON UNCOMPLETED CONTRACTS (46,993) -
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 181,510 254,922
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
PROCEEDS FROM DISPOSITION OF LAND - 715,381
CAPITAL EXPENSE.EQUIPMENT (73,283) (153,151)
CAPITAL EXPENSE.BUILDING (1,508,000) -
SALE OF SECURITIES 650,000 (750,000)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (931,283) (187,770)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
PAYMENT (PROCEEDS) - CURRENT (201,187) 4,734
PROCEEDS - LONGTERM 967,036 17,954
PROCEEDS FROM OFFICER LOAN RECEIVABLE - 507,888
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 765,849 530,576
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 16,076 597,728
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 127,489 239,476
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 143,565 $ 837,204
============ ============
</TABLE>
<PAGE> 10
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999
REVENUE
An increase in volume resulted in revenue for the third quarter 1999 being
$1,713,969, which was a 145% increase from third quarter 1998 revenues of
$698,999.
COSTS AND EXPENSES
The actual cost of revenue increased to $1,083,570 in the third quarter of
1999 when compared to $453,223 in the third quarter of 1998. Of this
$630,347 increase, $14,000 is attributed to depreciation expenses, $31,000
to utility expenses, $50,000 to salaries, $470,000 to material and $57,000
to capitalized labor.
Selling and shipping expenses increased to $150,679 in the third quarter of
1999 when compared to $33,154 in the third quarter of 1998. Of this $117,525
increase, $84,000 is attributed to salaries and $22,000 to travel expense.
General and Administrative expenses increased to $333,517 in the third
quarter of 1999 when compared to $196,185 in the third quarter of 1998. Of
this $137,332 increase, $22,000 is attributed to bad debt, $7,500 to building
maintenance, $6,500 to equipment maintenance, $ 3,000 to accounting fees,
$74,000 to salaries, and $6,400, to depreciation expenses.
Interest expense increased by $18,662 from 1998 to 1999, since the company's
average outstanding debt increased in 1999.
The significant increase in Costs and Expenses in the third quarter of 1999
over prior periods is associated with the startup of our new Stainless Design
Concepts division located at 1117 Old Kings Highway, Saugerties, NY 12477.
The new division was fully operational during the second quarter of 1999 and
continues to contribute to increase corporate revenues.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position decreased by $202,006 for the third quarter
ending 1999. This decrease in cash is largely attributed to the 158%
increase in accounts receivables.
Third quarter ending 1999 accounts receivable increased to $1,011,427 from
$390,998 from the second quarter ending 1999. The increase in receivables
is associated with the timing of accounts receivable payments and shipments.
<PAGE> 11
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999
REVENUE
An increase in volume resulted in revenue for nine months ending 1999 being
$3,943,171 which was a 53% increase from nine months ending 1998 revenues of
$2,570,206.
COSTS AND EXPENSES
The actual cost of revenue increased to $2,698,958 in the nine months ending
of 1999 when compared to $1,764,474 in the nine months ending of 1998. Of
this $934,484 increase, $43,000 is attributed to depreciation expenses,
$72,000 to utility expenses, $136,000 to salaries, $492,000 to material and
$175,000 to capitalized labor.
Selling and shipping expenses increased to $432,038 in the nine months ending
of 1999 when compared to $118,870 in the nine months ending of 1998. Of this
$313,168 increase, $280,000 is attributed to salaries and $22,000 to travel
expense.
General and Administrative expenses increased to $934,988 in the nine months
ending of 1999 when compared to $602,340 in the nine months ending of 1998.
Of this $332,648 increase, $22,000 is attributed to bad debt, $17,000 to
consulting fees, $19,000 to depreciation expenses, $16,000 to building
maintenance, $11,000 to equipment maintenance, $ 16,000 to accounting fees,
$16,000 to legal fees, and $191,000 to salaries.
Interest expense increased by $34,570 from 1998 to 1999, since the company's
average outstanding debt increased in 1999.
The significant increase in Costs and Expenses for nine months ending of 1999
over prior periods is associated with the startup of our new Stainless Design
Concepts division located at 1117 Old Kings Highway, Saugerties, NY 12477.
The new division was fully operational during the second quarter of 1999 and
continues to contribute to increase corporate revenues.
<PAGE> 12
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, this
15th day of November 1999.
CVD EQUIPMENT CORPORATION
By: /s/ Leonard A. Rosenbaum
Leonard A. Rosenbaum
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/s/ Leonard A. Rosenbaum President, Chief Executive Officer and Director
Leonard A. Rosenbaum
/s/ Mitchell Drucker Chief Financial Officer
Mitchell Drucker
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 143,565
<SECURITIES> 317,250
<RECEIVABLES> 1,462,021
<ALLOWANCES> 0
<INVENTORY> 467,916
<CURRENT-ASSETS> 2,460,937
<PP&E> 3,560,288
<DEPRECIATION> 1,296,054
<TOTAL-ASSETS> 5,034,107
<CURRENT-LIABILITIES> 479,353
<BONDS> 0
0
0
<COMMON> 2,813,248
<OTHER-SE> 757,333
<TOTAL-LIABILITY-AND-EQUITY> 5,034,107
<SALES> 3,001,719
<TOTAL-REVENUES> 3,943,171
<CGS> 2,698,958
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,367,026
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,529
<INCOME-PRETAX> (122,375)
<INCOME-TAX> (556)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (121,819)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
