U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
Commission File Number 0-14692
______________________________________________
GLOBAL MAINTECH CORPORATION
f/k/a Mirror Technologies, Incorporated
Minnesota 41-1523657
State of Incorporation I.R.S. Employer Identification No.
9220 James Avenue South, Bloomington, MN 55431
Telephone Number: (612)885-0400
______________________________________________
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
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______
______________________________________________
On October 18, 1995 there were 47,851,806 shares of the Registrant's no par
value common stock outstanding.
Transitional small business issuer format: No
Page 1 of 11
<PAGE>
<TABLE>
- - ------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
- - ------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
GLOBAL MAINTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 116,295 $ 24,309
Accounts receivable, lees allowances
for doubtful accounts and sales
returns 297,203 222,439
Other receivables 9,728 29,090
Inventories 420,630 573,612
Prepaid expenses and other 29,917 19,551
------------- -------------
Total current assets 873,773 869,001
PROPERTY AND EQUIPMENT, NET 66,203 849,932
------------- -------------
$ 939,976 $1,718,933
The accompanying notes are an integral part of these consolidated statements
</TABLE>
Page 2 of 11
<PAGE>
<TABLE>
GLOBAL MAINTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 652,841 $ 857,400
Current portion interest bearing
obligations 624,788 588,304
Mortgage note payable 0 620,000
Accrued liabilities
Compensation and payroll taxes 8,097 19,992
Interest 26,565 24,163
Other 29,948 73,895
Deferred revenue 0 148,000
------------- -------------
Total current liabilities 1,342,239 2,331,754
LONG-TERM OBLIGATIONS
Voting, convertible preferred stock
- Series A, convertible into one
common stock share for each pre-
ferred share, no par value;
4,439,900 shares authorized;
4,439,370 shares issued and out-
standing; total liquidity prefer-
ence of outstanding shares -
$1,665,000 416,400 0
Common stock, no par value;
245,560,100 shares authorized;
47,851,806 shares issued and
outstanding 0 800
Additional paid in capital 250,671 79,200
Accumulated deficit (1,464,084) (1,583,352)
------------- -------------
(797,013) (1,503,352)
------------- -------------
$ 939,976 $ 1,718,933
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
Page 3 of 11
<PAGE>
<TABLE>
GLOBAL MAINTECH CORPORATION
CONSOLIDATED STAEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, December 31, September 30, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 730,754 $ 6,470,919 $ 5,999,012 $18,842,258
Cost of sales 601,468 6,021,181 5,045,940 17,792,633
------------- ------------- ------------- -------------
Gross profit 129,286 499,738 953,072 1,049,625
Operating expenses
Selling, general and administrative 375,230 466,603 1,131,252 1,554,979
-------------- ------------- ------------- -------------
Income (loss) from operations (245,944) (16,865) (178,180) (505,354)
Other income/(expense)
Interest expense (30,395) (88,560) (104,074) (288,955)
Interest income 65 0 5,952 0
Amortization (2,359) 0 (7,077) 0
Other, principally debt reduction 300,000 0 406,947 0
-------------- ------------- ------------- -------------
Total other income/(expense) 267,311 (88,560) 301,748 (288,955)
-------------- ------------- ------------- -------------
Pre-tax Income/(Loss) 21,367 (105,425) 123,568 (794,309)
Provision for income taxes 1,800 0 4,300 0
-------------- ------------- ------------- -------------
NET INCOME/(LOSS) $ 19,567 $ (105,425) $ 119,268 $ (794,309)
Net earnings/(loss) per common and
common equivalent share: $ 0.00 $ 0.00 (1) $ 0.00 $ (0.02) (1)
-------------- ------------- ------------- -------------
Weighted average number of common
and common equivalent shares
outstanding 46,221,371 46,221,371 (1) 42,776,381 42,776,381 (1)
-------------- ------------- ------------- -------------
<FN>
<F1>Net earnings/(loss) per share and weighted average number of common and
common equivalent shares outstanding at September 30, 1994 for the three
and nine month periods assume the merger between Global MAINTECH, Inc.
and Global MAINTECH Corporation had occurred on January 1, 1994 for
presentation purposes.
</FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
Page 4 of 11
<PAGE>
<TABLE>
GLOBAL MAINTECH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30, September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income/(loss) $ 119,268 $ (614,309)
Adjustments to reconcile net income
(loss) to net cash used in operating
activites:
Depreciation and amortization 50,872 88,521
Debt forgiveness (400,000) 0
(Gain) on sale of equipment (8,173) 0
Changes in operating assets and
liabilities:
(Increase)/decrease accounts
receivable (55,403) (120,278)
(Increase)/decrease inventories 152,982 132,375
(Increase)/decrease prepaid
expenses (3,827) 16,331
Increase/(decrease) accounts
payable (205,497) (88,552)
Increase/(decrease) accrued
expenses (23,275) (84,738)
Increase/(decrease) deferred
revenue (148,000) 0
Increase/(decrease) other 33,710 0
------------- -------------
Cash used by operating
activites (487,343) (670,650)
Cash flows from investing activities:
Proceeds/(payment) from sale/
(purchase) of property and
equipment 743,389 (77,793)
Net cash received in merger 637,071 0
------------- -------------
Cash provided/(used)by
investing activites 1,380,460 (77,793)
Cash flows from financing activities:
Proceeds from issuance of Common
stock 150,000 0
Increase/(decrease) in short-term
notes payable (62,641) 373,000
Principal payments on mortgage note
payable (620,000) 0
Increase/(reduction) of long-term
notes payable (268,490) 306,589
Dividend distribution 0 (90,000)
------------- -------------
Cash provided/(used) by
financing activities (801,131) 589,589
------------- -------------
Net increase/(decrease) in cash 91,986 (158,854)
Cash at beginning of period 24,309 149,103
------------- -------------
Cash at end of period $ 116,295 $ (9,751)
The accompanying notes are an intergral part of these consolidated statements.
</TABLE>
Page 5 of 11
<PAGE>
FOOTNOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Merger
Effective January 1, 1995, MAINTECH, a company which brokers and sells parts
for IBM mainframe computers as well as computer systems for monitoring large
data centers, merged into the Company pursuant to the terms of an Agreement and
Plan of Merger (the "Agreement") dated December 6, 1994, as amended. While the
Company is the legal surviving entity, MAINTECH is considered the surviving
entity for accounting and reporting purposes. Under the terms of the
Agreement, each of the 80,000 shares of MAINTECH company issued 28,700,001
shares of common stock in exchange for all the outstanding capital stock of
MAINTECH. The merger has been accounted for as though MAINTECH had issued
16,651,805 shares of its common stock and 4,439,370 of preferred stock to the
Mirror shareholders for all of Mirror's net assets, principally cash.
In addition, in connection with the merger, outstanding options of MAINTECH to
purchase 68,214 shares of MAINTECH's common stock converted into the right to
purchase approximately 24,472,006 shares of the Company's common stock at an
exercise price of $.03 per share. Options covering 24,200,001 shares of the
Company's common stock will vest on June 1, 1999, or earlier, subject to the
Company attaining certain earnings levels.
As a result of this merger, the former shareholders of MAINTECH hold
unregistered stock comprising approximately 58 percent of the common stock and
common stock equivalents of the Company and if the options to purchase common
stock are exercised, these shareholders will hold approximately 70 percent of
the outstanding shares of the Company. Two of the officers of MAINTECH were
elected to the Board of Directors of the Company subsequent to the
consummation of the merger.
Basis of Presentation
As a result of the merger described above, the consolidated financial
statements represent the historical financial information of MAINTECH and
include the accounts of Mirror since the date of the merger.
The interim consolidated financial statements are unaudited, but in the
opinion of management, reflect all adjustments necessary for a fair presentation
of results for such periods. All such adjustments are of a normal recurring
nature
The results of operations for any interim period are not necessarily indicative
of results for the full year. These financial statements should be read in
conjunction with the audited consolidated financial statements and notes
thereto contained in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1994. The audited financial statements of MAINTECH are
presented in Form 8-K/A-1 dated January 4, 1995.
Reclassifications
Certain reclassifications have been made to the fiscal 1994 data to conform
with the fiscal 1995 presentation.
Common Equivalent Shares Outstanding
The preferred stock is, because of its terms and the circumstances under which
it was issued, in substance a common stock equivalent. The preferred
stockholders can convert, at their option, to common stock on a one-for-one
basis and accordingly can expect to participate in the appreciation of the value
of the common stock. Accordingly, the weighted average common and common
equivalent shares outstanding include the 47,851,806 common stock outstanding
and the preferred stock of 4,439,370 outstanding since its issuance on September
13, 1994.
Page 6 of 11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The financial statements that accompany this discussion show the operating
results of the Company for the nine months ended September 30, 1995. These
results include the operations of Global MAINTECH, Inc., a new subsidiary
which is engaged in the mainframe computer business and computer monitoring and
control systems. The Company had previously discontinued its operations,
restructured its balance sheet and proceeded with its plans to merge with an
operating company. As a result, the Company merged with Global MAINTECH, Inc.
on January 1, 1995. Although Mirror is the surviving legal entity, the
operations of MAINTECH are dominant and for accounting and reporting
purposes MAINTECH is the reporting entity. In the second fiscal quarter,
the Company's shareholders approved a name change to Global MAINTECH
Corporation (the "Company") from Mirror Technologies, Incorporated.
Net cash used in operations for the nine month period ended September 30, 1995
was approximately $500,000. Cash was generated from net income for the nine
month period ended September 30, 1995 of approximately $120,000. In addition,
cash was provided from a decline in inventory. Cash was used to reduce accounts
payable and accrued expenses of approximately $230,000, to reduce deferred
revenue of $148,000 and to increase accounts receivable of approximately
$60,000. In addition, debt forgiveness of $400,000 which is included in net
income, is a non-cash event. Cash was provided by an intercompany advance of
$615,000 from the parent company accounts.
Sales for the three months ended September 30, 1995 were approximately
$730,000 compared to sales of $6.5 million of MAINTECH in the same three month
period ended September 30, 1994, and $6.0 million for the nine months ended
September 30, 1995 compared to sales of $ 18.8 million in the same nine month
period ended September 30, 1994 when MAINTECH was not a part of the Company. The
decrease in sales was partially by design. The MAINTECH sales in both periods
were primarily derived from trading in used mainframe computers. The gross
margin on these trading revenues was approximately 8.4% in the first three
quarters ended September 30, 1995 versus approximately 5.5% in the first three
quarters ended September 30, 1994. The Company chose to be more selective with
its computer trading in an effort to increase profitablility. However, total
sales from trading particularly in the second and third quarters ended September
30, 1995 were below expectations. Management attributes this to secular changes
in the brokerage marketplace primarily caused by new pricing strategies of
the market leader, IBM. Also in the first three monthly periods in 1995,
the Company recorded sales of $166,000, $150,000 and $150,000, respectively
from non-trading activities. The $166K is due to the sale of certain data
base maintenance programs and the two $150K transactions represent the first
sales of the new Intelligent Console System. No similar sales were recorded
by MAINTECH in the prior nine month period ended September 30, 1994. The
total gross profit for the third quarter ended September 30, 1995 was
approximately 18% versus 7% in the same three month period ended September 30,
1994 and for the nine months ended September 30, 1995 and 1994 was approximately
16% and 6%, respectively.
Selling and general and administrative costs for the three months ended
September 30, 1995 were approximately $375,000 compared to approximately
$470,000 for the same three month period ended September 30, 1994. For the nine
months ended September 30, 1995 selling and general and administrative costs
were approximately $1.1 million compared to approximately $1.5 million for
the nine months ended September 30, 1994. This $95,000 decline in the second
quarter is almost entirely due to a decline in salaries which is the result of
a reduction in personnel and the second successive reduction reduction of 50%
in executive salaries effective June 1 through July 15, 1995. The $400,000
decline in the nine month period ended September 30, 1995 is substantially
due to salaries, as explained above and partially related to declines in travel
and entertainment, depreciation expense and insurance. The decline in travel and
entertaniment is related to cost controls to some extentbut more particularly to
substantial business development travel in the prior year with the British and
Japanese prospective business relationships developed by MAINTECH. The decline
in depreciation expense is a function of the double declining depreciation
method used by the Company. And the decline in insurance expense is related to
reduced keyman coverage and reduced general insurance expense which varies with
the sales activity. One expense category-legal and professional-has increased
over the prior three month and nine month periods ending September 30, 1995.
This increase is related to legal expenses primarily incurred from the
settlement of a legal suit described elsewhere in this Form 10-Q, the costs of
the annual meeting of the public company. (MAINTECH was privately held in the
prior year) and consulting costs incurred incurred in the development of the ICS
product.
Non-operating expenses in the third quarter ended September 30, 1995 primarily
include debt reduction, and interest expense. Two officers of the Company
agreed to reduce the remaining portion of the subordinated notes payable due to
these officers. Interest expense includes accrued interest on the Company's
Page 7 of 11
<PAGE>
Company's convertible subordinated debentures, notes payable to vendors, a bank,
and individuals. Interest expense declined primarily due to a decline in the
total debt outstanding during the comparable periods.
Cash provided by investing activities of approximately $1,380,000 reflects the
proceeds received from the sale of the building formerly occupied by MAINTECH
and cash received in the merger with Global MAINTECH Corporation (formerly,
Mirror Technologies). Both the merger and the building sale occurred in January
1995. The Company sold the office and warehouse owned by MAINTECH producing net
cash after payment of the mortgage on the property of approximately $125,000.
Cash was used for investing activities in the prior year's nine month period
ended September 30, 1994 due to the acquisition of office equipment.
Cash was used by financing activities primarily due to the sale of MAINTECH's
building in January 1995 a substantial portion of which was used to repay the
mortgage note payable. In addition, cash was used to reduce other notes
payable of the Company. Cash of $150,000 was raised by the sale in late August
1995 of 2.5 million shares at $.06 per share of common stock to a Japanese
company affiliated with the ICS product. In the prior year's nine month period
ended September 30, 1994 MAINTECH raised cash solely through the issuance of
notes payable previously described.
Liquidity and Capital Resources
As of September 30, 1995, the Company had negative working capital of
approximately $470,000. The negative working capital is primarily due to a note
in the amount of $250,000 on which the Company is not making any principal
payments. This note, which is due later in the calendar year is secured by parts
inventory and as a result the Company is currently not making any principal
payments. One other note included in current liabilities in the amount of
approximately $190,000 has smaller monthly principal an cash flow contraints the
Company has been delinquent on the monthly principal and interest payments
since June 1995. The Company intends to renegotiate or convert to equity a
portion of each of these notes.
The Company recognizes its cash flow is currently insufficient to make timely
payment on these notes and has begun discussions to convert a portion of
these notes to equity. These discussions are expected to include a partial
payment of principal on the associated debt. As part of these discussions the
Company has suspended making interest payments on all notes payable except
one payable to a bank. During July a principal payment on this bank note of
nearly $18,000 was paid by an officer of the Company who has guaranteed the note
and the Company subsequently repaid this officer. The Company was also
delinquent in its interest payment of approximately $16,000 due on July 1 on
its convertible subordinated debentures. This $16,000 was paid in August.
Accordingly, the Company is or has been in interest or principal payment default
on notes and debentures with a total principal of approximately $737,000.
During the nine months ended September 30, 1995, the Company used its cash to
reduce current liabilities and in other cases established new payment terms
on certain other liabilities which it is now attempting to renegotiate. Cash was
used primarily to reduce accounts payable and to fund an increase in accounts
receivable. The decrease in deferred revenue was largely funded by an decline
in inventory. In the prior nine month period ended September 30, 1994 MAINTECH
used cash from its financing activities primarily to fund operating losses, to
reduce accounts payable and to fund an increase in accounts receivable not
offset by the decrease in inventories.
In June 1995 the Company settled a lawsuit commenced in 1993 by a competitor of
MAINTECH. While the Company strongly contested the lawsuit and encouraged
scheduling a summary judgment hearing, it agreed to settle at an amount less
than the estimated legal costs associated with the scheduled court procedures.
The Company agreed to pay $45,000 to the counterparty $5,000 of which was
paid in June. The remaining $40,000 is payable in six equal monthly
installments beginning August 1, 1995 and the Company has continued to make
these payments as they become due.
The Company's results from operations, particularly in the three month period
ended September 30, 1995 indicate additional capital will be needed to
sustain future operations. This is substantially due to the decrease in
revenues in the mainframe trading activities and partially due to development
costs of its computer monitoring and control systems activities. For this
reason, the Company will seek to renegotiate and convert to equity additional
portions of its debt. The Company will also seek additional forgive the debt or
that additional sources of new capital will be found. If the Company does not
succeed in one or both of these areas, the affect on the business could be
material and adverse. During the most recent three month quarter ended September
30, 1995 the Company has borrowed from time to time against its accounts
Page 8 of 11
<PAGE>
receivable from its principal bank and may continue to do so in the future.
As of September 30, 1995, the Company had no debt outstanding from its principal
bank. On October 27,1995 the Company borrowed $150,000 from this bank which
is secured on an interchangeable basis by either an assignment of particular
accounts receivable or an individual guarantee by an officer of the Company.
The Company has recently begun to focus its activities in the computer
monitoring and control systems operations and to de-emphasize its computer
mainframe trading operations. In the recent quarter ended September 30, 1995 the
Company completed the requirements to fulfill the delivery and installation
under the initial $300,000 contract described in the June 30, 1995 Form 10-Q.
This customer has recently informed the Company it will need to expand this
initial contract before year-end and orders for another $620,000 were received
after September 30, 1995. In conjunction with the reduced activity in the
mainframe trading operations, the Company laid off its three field engineers
effective July 31, 1995 and will concentrate on the brokerage of used mainframes
without providing engineering services. This action conforms the Company to
the trend prevalent throughout this industry.
The acquisition activities of the Company have been hampered by the minimal
earnings of the Company and the effect these results have on the Company's
ability to meet its installment payments under the notes payable. The Company
has been unable to negotiate a purchase or merge with several other companies
using the Company's unissued Common Stock. The Company will need to adjust
its capital structure to fit the earnings capability of the Company before
it will be able to diversify its business activities.
The liquidity and capital resources of the Company are diminished as a result
of the operating performance in the recent quarter ended September 30, 1995. In
addition, the marketplace has helped shift the source of future earnings from
mainframe trading operations to the new computer monitoring and control systems.
As a result, the capital structure of the Company needs to be re-adjusted to
this new business focus. The Company's ability to renegotiate or convert
portions of its notes payable and to attract modest amounts of additional
capital to facilitate these negotiations is uncertain, as is the timing of the
new sales of the computer monitoring and control systems business. While the
Company believes in the viability of its operating plan and currently
anticipates that its operating plan will be achieved, there can be no assurances
to that effect. To the extent this plan is delayed, the Company will seek the
continued forbearance of its lenders.
Page 9 of 11
<PAGE>
- - --------------------------------------------------------------------------------
PART II. OTHER INFORMATION
- - --------------------------------------------------------------------------------
Item 1. LEGAL PROCEEDINGS
Effective June 1, 1995 the Company settled a lawsuit commenced in 1993 by a
competitor of MAINTECH. The suit alleged the Company misappropriated trade
secrets and tortiously interfered with the employment contracts of certain of
the competitor's employees. The competitor commenced this suit as a debtor in
possession as part of an advisory proceeding connected with bankruptcy
proceedings. In early 1995 the competitor's counsel on behalf of the trustee in
bankruptcy made a formal settlement demand of $326,140. Both the Company and its
insurer rejected the settlement offer and chose to proceed with a summary
judgment motion to dismiss the competitor's claims. Subsequently, the Company's
insurer withdrew further coverage when it learned the competitor had dropped a
claim which required coverage by the Company's insurer. The Company then chose
to delay the summary judment motion and sought to settle the remaining claims.
The final settlement was for $55,000, $10,000 of which was paid by three
individuals, one of whom is an officer of the Company, $5,000 was paid by the
Company and $40,000 is payable in six equal monthly installments beginning
August 1, 1995. At the request of the counterparty, the monthly installment note
was singed by Robert E. Donaldson as an individual and guaranteed by the
Company. The bankruptcy court issued an order dismissing the adversary
proceedings with prejudice.
The Company received a favorable summary judgment in October 1995 regarding
the other lawsuit outstanding stemming from 1988 involving the parent company.
In the matter of FMT, Inc. vs. Mirror Technologies, Inc., the Company
believed the best course of action was to request a summary judgment rather
than attempt to settle out of court. The Company's strategy was affirmed when
it received a favorable decision from the court dismissing the complaint with
prejudice in its entirety. The Company expects no further action will be taken
with regard to this lawsuit.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
A. The Company is or has been more than thirty days in default on interest
payments on the following notes payable due as of September 30, 1995:
<TABLE>
<CAPTION>
Amount of
Type of Security Amount of Debt Type of Default Arrearage
<S> <C> <C> <C>
senior note payable $190,246 non-payment of installment $41,067
senior note payable $250,000 non-payment of interest $ 5,521
convertible subord-
inated debentures $296,750 non-payment of interest $16,321
</TABLE>
Page 10 of 11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GLOBAL MAINTECH CORPORATION
November 9, 1995 By:/s/James Geiser
Chief Financial and
Chief Accounting Officer
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
November 9, 1995 By:/s/David McCaffrey
Chief Executive Officer
Page 11 of 11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000783738
<NAME> GLOBAL MAINTECH CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> $116,295
<SECURITIES> 0
<RECEIVABLES> 297,203
<ALLOWANCES> 0
<INVENTORY> 420,630
<CURRENT-ASSETS> 873,773
<PP&E> 66,203
<DEPRECIATION> 0
<TOTAL-ASSETS> $939,976
<CURRENT-LIABILITIES> $1,342,239
<BONDS> 394,750
<COMMON> 250,671
0
416,400
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> $939,976
<SALES> $5,999,012
<TOTAL-REVENUES> 5,999,012
<CGS> 5,045,940
<TOTAL-COSTS> 1,131,252
<OTHER-EXPENSES> (405,822)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,074
<INCOME-PRETAX> 123,568
<INCOME-TAX> 4,300
<INCOME-CONTINUING> 119,268
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 119,268
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
