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 June 30, 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 July 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 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
INDEX
Page
----
Form 10-QSB Cover Page 1
Index 2
PART I. FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements
Balance Sheet at June 30, 1999 3
Statements of Operations for the three-months ended 5
and six months ended June 30, 1999 and 1998
Statements of Cash Flows for the three-months ended 6
and six months ended June 30, 1999 and 1998
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial 11
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signature 15
Page 2 of 15
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET
ASSETS
June 30,
1999
-----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $2,774,490
Accounts receivable - net of allowances for doubtful
accounts and returns of $139,514 398,019
Inventories 502,219
Advance on royalties 12,774
Prepaid expenses 138,686
----------
Total current assets 3,826,188
----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization 802,588
----------
OTHER ASSETS
Deferred income taxes 450,700
Security deposits 39,137
Publishing rights - net of accumulated
amortization of $138,892 93,863
Acquisition costs and goodwill 144,373
Other 93,347
----------
Total other assets 821,420
----------
TOTAL ASSETS $5,450,196
==========
The accompanying notes are an integral
part of these financial statements.
Page 3 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET (continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30,
1999
----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 273,541
Royalties payable 65,561
Commissions payable 30,695
Series B preferred stock redemption and dividends payable 161,500
Accrued wages, bonuses and payroll taxes 56,893
Accrued liabilities 137,535
Current portion of long-term debt 23,051
-----------
Total current liabilities 748,776
OTHER LIABILITIES
Accrued rent payable 122,212
-----------
870,988
-----------
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 14,670,526
Accumulated deficit (10,132,798)
------------
Total shareholders' equity 4,579,208
------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,450,196
============
The accompanying notes are an integral
part of these financial statements.
Page 4 of 15
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES $ 784,753 $ 739,740 $1,335,236 $1,716,998
COST OF GOODS SOLD 453,599 934,940 778,532 1,362,993
------------ ----------- ---------- ----------
GROSS PROFIT (LOSS) 331,154 (195,200) 556,704 354,005
----------- ----------- ---------- ----------
OPERATING EXPENSES
Selling, shipping and marketing 260,226 280,399 459,787 582,927
General and administrative 533,859 478,892 990,499 927,333
----------- ----------- ---------- ----------
794,085 759,291 1,450,286 1,510,260
----------- ----------- ---------- ----------
OPERATING LOSS (462,931) (954,491) (893,582) (1,156,255)
----------- ----------- ---------- ----------
OTHER INCOME (EXPENSE)
Interest expense (2,925) (6,441) (5,560) (10,146)
Interest income 31,878 27,993 50,686 64,063
Other income 9,774 37,307 46,736 65,985
----------- ----------- ---------- ----------
38,727 58,859 91,862 119,902
----------- ----------- ---------- ----------
LOSS BEFORE TAXES (424,204) (895,632) (801,720) (1,036,353)
PROVISION FOR INCOME TAXES -- 300,000 800 300,000
----------- ----------- ---------- ----------
NET LOSS ($424,204) ($1,195,632) ($802,520) ($1,336,353)
=========== =========== ========== ==========
BASIC AND DILUTED LOSS PER
COMMON SHARE ($0.11) ($0.52) ($0.24) ($0.59)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,834,584 2,282,368 3,317,179 2,257,367
=========== =========== =========== =============
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 5 of 15
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
1999 1998 1999 1998
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ($ 424,204) ($1,195,632) ($ 802,520) ($1,336,353)
Non-cash items included in net loss
Depreciation and amortization 86,680 74,094 160,776 147,654
Decrease in allowances for
doubtful accounts and returns (74,691) (28,352) (323,983) (182,770)
Change in inventory reserves (63,000) 346,000 (170,000) 346,000
Decrease in deferred income taxes -- 300,000 -- 300,000
Changes in:
Accounts receivables (75,199) 458,851 552,788 450,853
Inventories (89,042) 94,474 46,822 (116,949)
Advances on royalties 3,820 79,189 (12,774) (239,413)
Prepaid expenses (7,652) 32,692 (80,317) (94,290)
Accounts payable 36,046 (19,636) 37,253 (115,447)
Royalties payable 39,422 (5,434) 54,704 10,285
Commissions payable 2,522 (5,462) (50,102) (57,604)
Accrued wages, bonus and payroll taxes (10,019) (14,721) 7,961 (3,910)
Income taxes payable -- -- -- (800)
Accrued liabilities 40,862 19,997 115,907 5,163
Accrued rent payable (9,790) 9,933 (3,169) 19,866
----------- ---------- ---------- ----------
Net cash (used)/provided by operating activities (544,245) 145,993 (466,654) (867,715)
----------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities -- -- 333 249,667
Purchases of equipment and color separations (133,704) (53,539) (162,871) (66,591)
Security deposits (4,860) -- (4,860) --
Acquisition costs (151,050) -- (151,050) --
Other (19,912) (12,348) (24,559) (9,201)
----------- ---------- ---------- ----------
Net cash (used)/provided by investing activities (309,526) (65,887) (343,007) 173,875
----------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on note payable (27,028) (66,559) (72,553) (92,654)
Net proceeds from Stock Rights Offering -- -- 1,494,094 --
----------- ---------- ---------- ----------
Net cash (used)/provided by financing activities (27,028) (66,559) 1,421,541 (92,654)
----------- ---------- ---------- ----------
INCREASE(DECREASE) IN CASH
AND CASH EQUIVALENTS (880,799) 13,547 611,880 (786,494)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 3,655,289 2,486,021 2,162,610 3,286,062
----------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 2,774,490 2,499,568 $2,774,490 $2,499,568
=========== ========== ========== ==========
SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES THE FOLLOWING:
Cash paid during the period for:
Interest $ 2,925 $ 6,441 $ 2,635 $ 3,705
Income taxes $ 0 $ 4,080 $ 0 $ 1,600
Non-cash investing and financing activities
Stock purchase warrants issued in exchange
for fixed assets $ 23,898 $ -- $ 23,898 $ --
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
Page 6 of 15
<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.
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.
NOTE 2 - INVENTORIES
Inventories consist of the following:
June 30,
1999
-----------
Raw materials $ 19,000
Work-in-process 258,115
Finished goods 225,104
-----------
$ 502,219
============
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
June 30,
1999
-----------
Machinery, equipment and leasehold improvements $ 760,369
Molds 454,808
Color separations 329,245
Furniture and fixtures 161,869
Computer software 78,288
-----------
1,784,579
Less accumulated depreciation and amortization (981,991)
============
$ 802,588
Page 7 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 4 - INCOME TAXES
At June 30, 1999, the Company had available net operating loss carryovers of
approximately $8,765,500 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 801,700
----------
$8,765,500
==========
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 $1,623,800 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 15
<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 3,123,200
Valuation allowance (2,693,200)
Other (2,800)
-----------
Non current deferred tax asset $ 450,700
===========
Page 9 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 5. - EARNINGS PER SHARE
Warrants to purchase 1,214,226 shares of common stock at a weighted average
price per share of $2.27 and options to purchase 355,000 shares of common stock
at a weighted average price per share of $5.82 were outstanding at June 30,
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.
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 June 30, 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 June 30, 1999 and 1998, but were not included in the computation of diluted
earnings per share as the effect would be anti-dilutive.
Page 10 of 15
<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
June 30, 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 six months ended June 30, 1999, the Company's net sales amounted to
$1,335,236 which reflected a decrease of $381,762 or 22.2% versus last year's
six month results of $1,716,998. Paper product sales declined 40.1% due
primarily to card and bookmark sales down collectively by 44.4%. This decline
was offset in part by increased Collectibles sales of $38,451 (+ 21.5%) and
sales of $126,947 from the recently acquired Evengreen Group of product lines.
For the three months ended June 30, 1999, the Company's net sales amounted
to $784,753, which reflected an increase of $45,013 (+ 6.2%) versus last year's
three month results of $739,740. An increase of $25,016 (+ 26.0%) in
Collectibles sales and sales of $126,947 from the recently acquired Evergreen
Group of product lines offset the 19.6% decrease in paper product sales.
Gross Profit
For the six months ended June 30, 1999, gross profit amounted to $556,704
or 41.7% of sales. For the comparable prior year period, gross profit amounted
to $354,005 or 20.6% of sales. Included in last year's costs were a close-out
sale and a provision for obsolete inventory totaling $576,000. Increased
Page 11 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Gross Profit (continued)
Collectible and Evergreen sales offset by declining paper product sales
accounted for the adjusted period to period increase.
For the three months ended June 30, 1999, gross profit amounted to $331,154 or
42.2% of sales. For the comparable prior year period, a gross loss of $195,200
was incurred. Included in last year's costs were a close-out sale and a
provision for obsolete inventory totaling $576,000. The period to period
increase was caused by a shortfall in paper product sales offset in part by
increased Collectible and Evergreen sales.
Operating Expenses
For the six months ended June 30, 1999, selling, shipping and marketing
expenses amounted to $459,787 reflecting a decrease of $123,140 or 21.1% versus
the prior year's level of $582,927. Lower commissions, advertising and catalog
costs offset in part by increased sales salaries resulted in the year to year
decline.
For the three months ended June 30, 1999, selling, shipping and marketing
expenses amounted to $260,226 reflecting a decrease of $20,173 or 7.1% versus
the prior year's level of $280,399. Lower commissions, advertising and catalog
costs offset in part by increased sales salaries resulted in the year to year
decline
General and administrative expenses amounted to $990,499 for the six months
ended June 30, 1999, reflecting an increase of $63,166 or 6.8% versus the prior
year period of $927,333. Increased professional fees and the addition of our
recent acquisition of the Evergreen Group accounted for the year to year
increase.
General and administrative expenses amounted to $533,859 for the three
months ended June 30, 1999, reflecting an increase of $54,967 or 11.4% versus
the prior year period $478,892. The year to year increase was a result of the
acquisition and addition of the Evergreen Group.
Income
An operating loss of $893,582 or $.27 per share was incurred for the six
months ended June 30, 1999. Interest and other income of $91,862 reduced the
operating loss to result in a net loss before income taxes of $801,720 or $.24
per share. For the prior year period, the net loss before income taxes amounted
to $1,036,353 or $.46 per share. All per share amounts are based on the weighted
average common shares outstanding for the period. Net loss for the six months
ended June 30, 1999 amounted to $802,520 or $.24 per share, compared to the
prior year's net loss of $1,336,353 or $.59 per share. All per share amounts are
based on the weighted average common shares outstanding for the period.
Page 12 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Balance Sheet
Total assets at June 30, 1999 amounted to $5,450,196 which reflected an
increase versus the December 31, 1998 level of $4,639,800 by $810,396 or 17.5%.
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 $784,776 as of June 30, 1999 versus the December 31, 1998 level of
$655,700. The 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 June 30, 1999, the Company's working capital was $3,077,412 reflecting
an increase of $506,312 versus the working capital at December 31, 1998 of
$2,571,100. Net cash provided by operating activities amounted to $466,654.
Operating losses required $1,135,727 in cash offset in part by $669,073 provided
by changes in the net receivables, inventory, other assets and liabilities. Cash
used by investing activities amounted to $343,007. Approximately $285,000 was
used in the recent acquisition of the Evergreen Group and the balance used to
purchase color separations, publishing rights and computer equipment. Cash
provided by financing activities consisted of $1,494,094 in cash as net proceeds
from a rights offering completed in March of 1999 and $72,553 used to repay a
note associated with our Collectibles acquisition.
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. 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 13 of 15
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders
The Annual Meeting of Shareholders of Healthy Planet Products, Inc.
(the "Company") was held on July 21, 1999, at which the following items of
business were transacted: (i) election of John V. Winfield and Robert W.
Sweitzer, Ph.D., to the Board of Directors of the Company, as Class 3 Directors
for terms expiring at the Annual Meeting in the year 2002; and (ii) adoption of
the 1999 Incentive Compensation Plan pursuant to which, among other items, a
total of 400,000 shares of Common Stock have been reserved for issuance, and a
maximum of 5,000 options to purchase shares of Common Stock of the Company may
be granted to non-employee Directors of the Company through automatic annual
grants of 5,000 options upon each anniversary of service.
Holders of the Company's Common Stock and Series D Preferred Stock
were entitled to attend and vote, as a single class, upon the matters at the
Annual Meeting.
The vote on each item of business was as follows:
A. ELECTION OF CLASS 3 DIRECTORS
-----------------------------
JOHN V. WINFIELD
Votes For Votes Against
--------- -------------
2,521,299 84,869
ROBERT W. SWEITZER, PH.D.
Votes For Votes Against
--------- -------------
2,521,299 84,869
B. 1999 INCENTIVE COMPENSATION PLAN
Votes For Votes Against
--------- -------------
1,595,792 130,428
Page 14 of 15
<PAGE>
PART II. OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
None
b) Reports on Form 8-K
During the quarter ended June 30, 1999, the following reports on
Form 8-K were filed by the Registrant.
Date of Report Item Reported Description
- -------------- ------------- -----------
May 11, 1999 Item 5. Other Events Acquisition of The Evergreen Group
Product Line from KT Holdings, Inc.
July 22, 1999 Item 5. Other Events Election of John V. Winfield and
Robert W. Sweitzer as Directors.
Approval of 1999 Incentive
Compensation Plan.
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: August 13, 1999 by: /s/ Bruce A. Wilson
------------------------------------
Bruce A. Wilson
President, Chief Executive, Chief
Operating and Chief Financial Officer.
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,744,490
<SECURITIES> 0
<RECEIVABLES> 537,533
<ALLOWANCES> (139,514)
<INVENTORY> 502,219
<CURRENT-ASSETS> 3,826,188
<PP&E> 1,784,579
<DEPRECIATION> (981,991)
<TOTAL-ASSETS> 5,450,196
<CURRENT-LIABILITIES> 748,776
<BONDS> 0
0
3,134
<COMMON> 38,346
<OTHER-SE> 4,537,728
<TOTAL-LIABILITY-AND-EQUITY> 5,450,196
<SALES> 784,753
<TOTAL-REVENUES> 826,405
<CGS> 453,599
<TOTAL-COSTS> (1,250,609)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (424,204)
<INTEREST-EXPENSE> 2,925
<INCOME-PRETAX> (424,204)
<INCOME-TAX> 0
<INCOME-CONTINUING> (424,204)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (424,204)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.00)
</TABLE>
