U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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 No. 1-13048
HEALTHY PLANET PRODUCTS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 92-2601764
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1700 Corporate Circle, Petaluma, California 94954
- ------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 778-2280
________________________________________________________________________________
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 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
---------- ---------
As of May 10, 1999, there were issued and outstanding 3,834,584 shares
of common stock of the registrant (exclusive of 31,335 shares of voting Series D
Preferred Stock convertible into 31,335 shares of common stock).
Transitional Small Business Disclosure Format Yes No X
------ ------
Page 1 of 16
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
INDEX
<CAPTION>
Page
----
<S> <C>
Form 10-QSB Cover Page 1
Index 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at March 31, 1999 3
Statements of Operations for the three-months ended 5
ended March 31, 1999 and 1998
Statements of Cash Flows for the three-months ended 6
ended March 31, 1999 and 1998
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial 13
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
Signature 16
</TABLE>
Page 2 of 16
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET
ASSETS
<CAPTION>
March 31,
1999
----------
(Unaudited)
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $3,655,289
Accounts receivable - net of allowances for doubtful
accounts and returns of $214,206 248,038
Inventories 350,177
Advance on royalties 16,594
Prepaid expenses 131,034
----------
Total current assets 4,401,132
----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization 707,860
----------
OTHER ASSETS
Deferred income taxes 450,700
Security deposits 34,277
Publishing rights - net of accumulated
amortization of $204,533 82,765
Other 96,785
----------
Total other assets 664,527
----------
TOTAL ASSETS $5,773,519
==========
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 3 of 16
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET (continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
March 31,
1999
----------
(Unaudited)
<S> <C>
CURRENT LIABILITIES
Accounts payable $ 237,495
Royalties payable 26,139
Commissions payable 28,173
Series B preferred stock redemption and dividends payable 161,500
Accrued wages, bonuses and payroll taxes 66,913
Accrued liabilities 96,673
Current portion of long-term debt 50,079
----------
Total current liabilities 666,972
OTHER LIABILITIES
Accrued rent payable 132,002
----------
798,974
----------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 12,000,000 shares
authorized, 3,834,584 shares issued and outstanding 38,346
Preferred stock, Series D, $.10 par value, with
aggregate liquidation preferences of $160,100,
371,009 shares authorized, 31,335 issued and outstanding 3,134
Additional paid-in capital 14,615,671
Accumulated deficit (9,682,606)
----------
Total shareholders' equity 4,974,545
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,773,519
==========
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 4 of 16
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended March 31,
----------------------------
1999 1998
---------- ----------
<S> <C> <C>
NET SALES $ 550,483 $ 977,258
COST OF GOODS SOLD 324,933 428,053
---------- ----------
GROSS PROFIT 225,550 549,205
---------- ----------
OPERATING EXPENSES:
Selling, shipping and marketing 199,561 302,528
General and administrative 456,640 448,441
---------- ----------
656,201 750,969
---------- ----------
OPERATING LOSS (430,651) (201,764)
---------- ----------
OTHER INCOME/EXPENSE:
Interest expense (2,635) (3,705)
Interest income 18,808 36,070
Other income 36,962 28,678
---------- ----------
53,135 61,043
---------- ----------
LOSS BEFORE INCOME TAXES (377,516) (140,721)
PROVISION FOR INCOME TAXES 800 --
---------- ----------
NET LOSS $ (378,316) $ (140,721)
========== ==========
LOSS PER COMMON SHARE $ (.14) $ (.06)
========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,799,773 2,237,362
========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
Page 5 of 16
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended March 31,
----------------------------
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Loss ($378,316) ($140,721)
Non-cash items included in net loss
Depreciation and amortization 74,096 73,560
Decrease in allowances for doubtful
accounts and returns (249,292) (154,418)
Decrease in inventory reserves (107,000) --
Changes in:
Accounts receivable 627,987 (7,998)
Inventories 135,864 (211,423)
Advance on royalties (16,594) (318,602)
Prepaid expenses (72,665) (126,982)
Accounts payable 1,207 (95,811)
Royalties payable 15,282 15,719
Commissions payable (52,624) (52,142)
Income taxes payable -- (800)
Accrued wages, bonus & payroll taxes 17,980 10,811
Accrued liabilities 75,045 (14,834)
Accrued rent payable 6,621 9,933
----------- ----------
Net cash provided (used) by operating activities 77,591 (1,013,708)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities 333 249,667
Purchase of equipment & color separations (29,167) (13,052)
Other assets (4,647) 3,147
----------- ----------
Net cash (used) provided by investing activities (33,481) 239,762
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayments on note payable (45,525) (26,095)
Net proceeds from Stock Rights offering 1,494,094 --
----------- ----------
Net cash provided (used) by financing activities 1,448,569 (26,095)
----------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,492,679 (800,041)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,162,610 3,286,062
----------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $3,655,289 $2,486,021
=========== ==========
SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES THE FOLLOWING:
Cash paid during the period for:
Interest $ 2,635 $ 3,705
Income taxes $ 800 $ 1,600
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
Page 6 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
It is believed, however, that the disclosures are adequate to make the
information presented not misleading.
<TABLE>
The financial statements, in the opinion of management, reflect all adjustments
necessary, which are of a normal recurring nature, to fairly state the financial
position and the results of operations. These results are not necessarily to be
considered indicative of the results for the entire year.
<CAPTION>
NOTE 2 - INVENTORIES
Inventories consist of the following:
March 31,
1999
-----------
<S> <C>
Raw materials $ 10,305
Work-in-process 161,707
Finished goods 178,085
-----------
$ 350,177
===========
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
March 31,
1999
-----------
Machinery, equipment and leasehold improvements $ 745,564
Molds 452,384
Color separations 318,236
Furniture and fixtures 72,664
Computer software 38,171
-----------
1,627,019
Less accumulated depreciation and amortization (919,159)
-----------
$ 707,860
===========
</TABLE>
Page 7 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 4 - INCOME TAXES
At March 31, 1999, the Company had available net operating loss carryovers of
approximately $8,341,300 to be applied against future federal taxable income.
Due to a change in ownership during 1988, $2,638,000 of these amounts are
subject to a Section 382 limitation of a maximum of $476,950 per year. If the
Company does not generate sufficient income to use the maximum limitation,
remaining amounts accumulate for use in future periods until the operating loss
expires. The remaining net operating loss carryovers generated after 1988 are
available to be used without yearly limitation. For federal tax purposes, net
operating losses expire as follows:
Year Ending December 31,
------------------------
2002 $2,638,500
2003 1,222,000
2004 1,299,100
2005 383,500
2006 31,700
2012 570,700
2018 1,818,300
2019 377,500
----------
$8,341,300
==========
The Company has available approximately $25,500 of federal Alternative Minimum
Tax credits which can be carried forward indefinitely and offset against future
income taxes.
The Company has available approximately $1,441,800 of California net operating
losses which can be carried forward and offset against future taxable income.
These loss carryforwards expire through 2004.
Management of the Company believes it is more likely than not that a portion of
the federal net operating loss carryforwards will be utilized prior to
expiration. A valuation allowance has been established against remaining net
operating loss carryforwards.
Page 8 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 4. INCOME TAXES (continued)
The Company has substantial net operating loss carryforwards and credits
available to offset future income tax liabilities. The expected tax effect of
these losses and credits are reflected as deferred tax assets on the
accompanying balance sheet. A valuation allowance has been established since the
realization of tax benefits of net operating loss carryforwards is not assured.
The amount of the valuation allowance will be reviewed on a quarterly basis.
Deferred tax assets consist of the following:
Accounts receivable allowances 198,600
Inventory reserve 426,300
Other (35,900)
Valuation allowance (589,000)
-----------
Current deferred tax asset $ --
===========
Depreciation and amortization $ 23,500
Benefits from net operating loss carryforward 2,963,500
Valuation allowance (2,533,500)
Other (2,800)
-----------
Non current deferred tax asset $ 450,700
===========
Page 9 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
<TABLE>
NOTE 5. - EARNINGS PER SHARE
<CAPTION>
Three Months Ended March 31, 1999
---------------------------------
Per-Share
Loss Shares Amount
---------- --------- ---------
<S> <C> <C> <C>
Net loss ($378,316)
==========
Basic loss per share:
Loss available to common shareholders ($378,316) 2,799,773 ($.14)
======
Effect of dilutive securities -- --
---------- ---------
Diluted loss per share:
Loss available to common shareholders
plus assumed conversions ($378,316) 2,799,773 ($.14)
========== ========= ======
</TABLE>
Warrants to purchase 739,144 shares of common stock at a weighted average price
per share of $2.05 and options to purchase 355,000 shares of common stock at a
weighted average price per share of $5.77 were outstanding at March 31, 1999,
but were not included in the computation of diluted earnings per share as the
exercise prices were greater than the average market price of the common shares.
Preferred stock convertible into 31,335 shares of common stock were outstanding
at March 31, 1999, but were not included in the computation of diluted earnings
per share as the effect would be anti-dilutive.
Page 10 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
<TABLE>
NOTE 5. - EARNINGS PER SHARE
<CAPTION>
Three Months Ended March 31, 1998
---------------------------------
Per-Share
Loss Shares Amount
---------- --------- ------
<S> <C> <C> <C>
Net loss ($140,721)
==========
Basic loss per share:
Loss available to common shareholders ($140,721) 2,237,362 ($.06)
Effect of dilutive securities -- --
---------- ---------
Diluted loss per share:
Loss available to common shareholders
Plus assumed conversions ($140,721) 2,237,362 ($.06)
========== ========= ======
</TABLE>
Warrants to purchase 368,117 shares of common stock at a weighted average price
per share of $4.45 and options to purchase 325,000 shares of common stock at a
weighted average price per share of $6.19 were outstanding at March 31, 1998,
but were not included in the computation of diluted earnings per share as the
exercise prices were greater than the average market price of the common shares.
Preferred stock convertible into 31,335 shares of common stock were outstanding
at March 31, 1998, but were not included in the computation of diluted earnings
per share as the effect would be anti-dilutive.
Page 11 of 16
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 6. - SUBSEQUENT EVENT
On May 4, 1999, the Company completed the acquisition of The Evergreen
Group product line from KT Holdings, Inc. The acquisition consisted of the
business, assets, and The Evergreen Group trade name formerly marketed by KT
Holdings, Inc. The Evergreen Group product lines, which include adoption kits,
educational games, activity kits and gift items, are based on pro-active
consumer education about the conservation of endangered animals. These product
lines are associated with, and help to support, various conservation groups such
as Caribbean Conservation Corporation, Earth Island Institute, Hornocker
Wildlife Institute, Institute of Range and the American Mustang, International
Wildlife Coalition, Nature Conservancy, The Raptor Center, Wolf Education and
Research Center and Yellowstone Grizzly Foundation.
The purchase price of the Evergreen Group product line assets consisted of
$250,000 in cash paid at closing and the delivery by the Company of 292,260
callable Common Stock Purchase Warrants, of which 146,130 warrants are
exercisable at $2.00 per share and 146,130 warrants are exercisable at $2.50 per
share. The Warrants are entitled to limited registration rights, including
piggyback rights and a demand registration right commencing April 30, 2000
through April 30, 2004.
Page 12 of 16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements in this Form 10-QSB, including information set forth
under this Item 2 "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 (the "Act").
Healthy Planet Products, Inc. (the "Company") desires to avail itself of certain
"safe harbor" provisions of the Act and is therefore including this special note
to enable the Company to do so. Forward-looking statements included in this From
10-QSB or hereafter included in other publicly available documents filed with
the Securities and Exchange Commission, report to the Company's stockholders and
other publicly available statements issued or released by the Company involve
known and unknown risks, uncertainties, and other factors which could cause the
Company's actual results, performance (financial or operating) or achievements
to differ from the future results, performance (financial or operating)
achievements expressed or implied by such forward looking statements. Such
future results are based upon management's best estimates based upon current
conditions and the most recent results of operations. These include management's
forecasts for sales, the decrease in net sales for the three month period ended
March 31, 1999, purchasing plans and programs of certain large chain buyers
relating to holiday product, recently experienced decline in gross margin as
well as marginal increases in general and administrative expenses, the recent
adverse trend in the general retail environment, general economic conditions,
competition generally and specifically relating to greeting cards having
environmental, nature or wildlife themes and the ability of the Company to
sustain consumer demand for the Company's principal Sierra Club card line. In
addition, the ability of the Company to enhance and expand its product mix and
to successfully introduce new products which will meet with consumer acceptance
may also affect future results.
Sales
For the three months ended March 31, 1999, the Company's net sales amounted
to $550,483 which reflected a decrease of $426,775 versus last year's three
month results of $977,258 or 43.7%. Everyday card sales declined $277,000 or
41.9% and bookmark sales declined $181,000 to account for the total company
shortfall versus a year ago. The loss of Natural Wonders in 1998 accounted for a
substantial portion of the everyday card sales decline with timing differences
on our bookmark business resulting in the overall quarter to quarter decline.
Collectibles sales showed modest growth in the first quarter compared to last
year's first quarter results.
Gross Profit
For the three months ended March 31, 1999, gross profit amounted to
$225,550 or 41% of sales. For the comparable prior year period, gross profit
amounted to $549,205 or 56.2% of sales. Fixed overhead costs on lower sales and
minimum royalties contributed to the decline at gross margin.
Page 13 of 16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Operating Expenses
For the three months ended March 31, 1999, selling, shipping and marketing
expenses amounted to $199,561 reflecting a decrease of $102,967 versus the prior
year's level of $302,528 or 34%. Lower commissions, advertising and catalog
costs accounted for the year to year decline.
General and administrative expenses amounted to $456,640 for the three
months ended March 31, 1999, reflecting an increase of $8,199 or 1.8% versus the
prior year period of $448,441. Increased professional fees accounted for the
year to year increase.
Income
An operating loss of $430,651 or $.15 per share was incurred for the three
months ended March 31, 1999. Interest and other income of $53,135 reduced the
operating loss to result in a net loss before income taxes of $377,516 or $.13
per share. For the prior year period, the net loss before income taxes amounted
to $140,721 or $.06 per share. All per share amounts are based on the weighted
average common shares outstanding for the period.
Net loss for the three months ended March 31, 1999 amounted to $378,316 or
$.14 per share, compared to the prior year's net loss of $140,721 or $.06 per
share. All per share amounts are based on the weighted average common shares
outstanding for the period.
Balance Sheet
Total assets at March 31, 1999 amounted to $5,773,519 which reflected an
increase versus the December 31, 1998 level of $4,639,800 by $1,133,719 or
24.4%. An increase in cash, prepaid expenses, royalties, and fixed assets were
offset in part by decreases in receivables and inventories. Total current
liabilities amounted to $666,972 as of March 31, 1999 versus the December 31,
1998 level of $655,700. The slight increase was a result of increases in trade
payables, royalties and accruals offset in part by the paydown of commissions
and an existing note payable.
Liquidity and Capital Resources
At March 31, 1999, the Company's working capital was $3,734,160 reflecting
an increase of $1,163,060 versus the working capital at December 31, 1998 of
$2,571,100. Net cash provided by operating activities amounted to $77,591 versus
the previous year net use of cash of $1,013,708 for the period for operating
activities. Operating losses required $660,512 in cash offset in part by
$738,103 provided by changes in the net receivables, inventory, other assets and
liabilities. Cash used by investing activities amounted to $33,481 comprised
mostly of the purchase of color separations and computer equipment. Cash
provided from financing activities consisted of $1,494,094 in cash as net
proceeds from the stock rights offering completed in March of 1999, offset by
$45,525 used to repay a note associated with our Collectibles acquisition.
Page 14 of 16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
The Company believes and anticipates that the primary source of its
liquidity and capital resources for its coming fiscal year will primarily be
from cash on hand and from cash internally generated from sales; all of which
the Company believes will be adequate and sufficient for its operations for
1999. Longer term, the Company's source of liquidity and capital resources are
expected to be primarily internally generated cash from sales and the possible
exercise of existing Common Stock Purchase Warrants, which the Company believes
should be adequate for its operations for the foreseeable future. The Company
believes that its cash on hand is sufficient to sustain operations at current
sales levels for at least two years. The Company is hopeful that sales of its
new Collectibles line and the introduction of the newly acquired Evergreen Group
product line will help offset the declines in sales of greeting cards. The
Company will also continue to explore the acquisition of new product lines as a
means for augmenting sales. There is no assurance, however, that sales from the
Collectibles product line or the Evergreen Group product line, or any other new
product line which may be acquired will be sufficient to satisfy the Company's
long term cash requirements. If they do not, the Company would seek equity
and/or debt financing in order to obtain the additional capital that would be
needed.
Effects of Inflation
The Company does not view the effects of inflation as having a material
effect upon its business. Increases in paper and labor costs have been offset by
increases in the price of the Company's cards and through higher print runs,
which have reduced the unit cost of the Company's card product. While the
Company has in the past increased its prices to its customers, it has maintained
its relative competitive price position within the general range of greeting
cards.
Page 15 of 16
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
<TABLE>
During the quarter ended March 31, 1999, the following reports on
Form 8-K were filed by the Registrant.
<CAPTION>
Date of Report Item Reported Description
- -------------- ------------- -----------
<S> <C> <C>
March 25, 1999 Item 5. Other Events Registration Statement on Form S-3 relating
to Rights Offering
</TABLE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTHY PLANET PRODUCTS, INC.
(Registrant)
DATED: May 14, 1999 by: /s/ Bruce A. Wilson
-----------------------------------------
Bruce A. Wilson
President, Chief Executive, Chief Operating
and Chief Financial Officer.
Page 16 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM [Identify
specific financial statements] AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 3,655,289
<SECURITIES> 0
<RECEIVABLES> 462,244
<ALLOWANCES> (214,206)
<INVENTORY> 350,177
<CURRENT-ASSETS> 4,401,132
<PP&E> 1,627,019
<DEPRECIATION> (919,159)
<TOTAL-ASSETS> 5,773,519
<CURRENT-LIABILITIES> 666,972
<BONDS> 0
0
3,134
<COMMON> 38,346
<OTHER-SE> 4,933,065
<TOTAL-LIABILITY-AND-EQUITY> 5,773,519
<SALES> 550,483
<TOTAL-REVENUES> 606,253
<CGS> 324,933
<TOTAL-COSTS> 981,134
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (377,516)
<INTEREST-EXPENSE> (2,635)
<INCOME-PRETAX> (377,516)
<INCOME-TAX> 800
<INCOME-CONTINUING> (378,316)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (378,316)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
