UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended: October 31, 1997
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:# 0-14754
ELECTRIC & GAS TECHNOLOGY, INC.
(Exact Name of Registrant as specified in its Charter)
TEXAS 75-2059193
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13636 Neutron Road, Dallas, Texas 75244-4410
(Address of Principal Executive Offices) (Zip Code)
(972) 934-8797
(Registrant's telephone number, including area code)
____________________________________________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities 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
The number of shares outstanding of each of the Issuer's Classes
of Common Stock, as of the close of the period covered by this
report:
Common - $0.01 Par Value - 8,030,624 shares at November 26, 1997.
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
Index to Form 10-Q
For the Quarter Ended October 31, 1997
Page
Part I - Financial Information
1. Condensed Consolidated Financial Statements:
(a)Condensed Consolidated Balance Sheets as
of October 31, 1997 and July 31, 1997 3
(b)Condensed Consolidated Statements of
Operations for the three months
ended October 31, 1997 and 1996 4-5
(c)Condensed Consolidated Statements of
Cash Flows for the three months ended
October 31, 1997 and 1996 6
(d)Notes to Condensed Consolidated
Financial Statements 7-10
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
Part II - Other Information
Item 1 - Legal Proceedings 14
Item 6 - Exhibits and Reports on Form 8-K 14
Signature (pursuant to General Instruction E) 15
All other items called for by the instructions are
omitted as they are either inapplicable, not required,
or the information is included in the Condensed
Financial Statements or Notes thereto.
2
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, 1997 and July 31, 1997
ASSETS
<TABLE>
<S> <C> <C>
October 31, July 31,
1997 1997
CURRENT ASSETS (Unaudited)
Cash and cash equivalents $ 897,181 $14,517,860
Investments 10,600,000 -
Accounts receivable, net 1,801,843 1,798,105
Inventories 3,213,269 3,183,727
Prepaid expenses 80,758 97,498
Total current assets 16,593,051 19,597,190
PROPERTY, PLANT AND EQUIPMENT, net 2,410,864 2,483,050
OTHER ASSETS
Other assets 3,107,759 1,438,440
TOTAL ASSETS $22,111,674 $23,518,680
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 1,508,342 $ 1,585,097
Accounts payable 1,567,423 1,886,813
Accrued liabilities 364,882 1,165,611
Current maturities of long-term obligations 191,098 251,826
Total current liabilities 3,631,745 4,889,347
LONG-TERM OBLIGATIONS
Long-term obligations, less current
maturities 2,266,562 2,505,210
MINORITY INTEREST IN SUBSIDIARY 73,060 83,004
STOCKHOLDERS' EQUITY
Preferred stock, $10 par value, 5,000,000
shares authorized, 90,000 issued and
outstanding 900,000 900,000
Common stock, $.01 par value, 30,000,000
shares authorized and issued 8,250,416 82,504 82,504
Additional paid-in capital 10,099,338 10,099,338
Retained earnings 6,543,875 6,421,117
Pension liability adjustment (329,805) (329,805)
Cumulative translation adjustment (455,844) (432,274)
16,840,068 16,740,880
Less treasury stock, 219,792 shares,
at cost (699,761) (699,761)
Total stockholders' equity 16,140,307 16,041,119
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $22,111,674 $23,518,680
</TABLE>
See accompanying notes.
3
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended October 31, 1997 and 1996
(Unaudited)
<TABLE>
<S> <C> <C>
Three months ended
October 31,
1997 1996
Sales $3,113,676 $3,105,725
Cost of goods sold 2,360,986 2,244,821
Gross profit 752,690 860,904
Selling, general and
administrative expenses 1,194,699 935,149
Operating profit (loss) (442,009) (74,245)
Other income and (expenses)
Interest, net (49,099) (125,291)
Minority interest in subsidiary 9,944 -
Investment gain 867,648 -
Other 59,892 5,064
888,385 (120,227)
Earnings (Loss) from continuing operations
before income taxes 446,376 (194,472)
Provision (credit) for
income taxes - -
Earnings (Loss) from continuing operations 446,376 (194,472)
Discontinued operations:
Earnings (loss) from operations of
discontinued defense segment (323,617) 84,837
Earnings (loss) from operations of
discontinued metal fabrication - 643,168
(323,617) 728,005
NET EARNINGS 122,759 533,533
Dividend on preferred stock 15,879 15,879
Net earnings applicable to common stock $ 106,880 $ 517,654
</TABLE>
See accompanying notes.
4
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
Three Months Ended October 31, 1997 and 1996
(Unaudited)
Three months ended
October 31,
1997 1996
<TABLE>
<S> <C> <C>
Earnings per share:
Primary $ 0.01 $ 0.07
Fully diluted $ 0.01 $ 0.06
Weighted average number of
common shares outstanding 8,193,058 7,795,624
Fully diluted 8,793,058 8,995,624
</TABLE>
See accompanying notes.
5
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended October 31, 1997 and 1996
(Unaudited)Three months ended
<TABLE>
<S> <C> <C>
October 31,
1997 1996
Increase (decrease) in cash:
Cash flows from operating activities:
Net earnings $ 122,759 $ 533,533
Adjustments to reconcile net earnings ( loss)
to net cash provided by operating activities:
Discontinued operations 323,617 (728,005)
Depreciation and amortization 83,592 87,133
Minority interest in subsidiary (9,944) -
Gain on investments (867,648) -
Changes in assets and liabilities:
Accounts receivable (3,738) 112,655
Inventories (29,542) (175,718)
Prepaid expenses 16,740 25,407
Other assets (838,411) (5,001)
Accounts payable (364,085) 124,671
Accrued liabilities (800,729) 4,493
Net cash provided by (used in) operating
activities (2,367,389) (20,832)
Cash flows from investing activities:
Investments (10,600,000) -
Purchase of property, plant and equipment (9,735) (78,373)
Net cash provided by (used in) investing
activities (10,609,735) (78,373)
Cash flows from financing activities:
Increase (decrease) in notes payable and
long-term obligations (355,007) (20,454)
Payment to affiliates (288,548) (204,178)
Net cash provided by (used in) financing
activities (643,555) (224,632)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (13,620,679) (323,837)
Cash and cash equivalents -
beginning of period 14,517,860 457,455
Cash and cash equivalents- end of period $ 897,181 $ 133,618
Supplemental disclosures of cash flow information:
Cash paid during the year for Interest $ 121,836 $ 135,804
</TABLE>
See accompanying notes.
6
<PAGE>
ELECTRIC & GAS TECHNOLOGHY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 31, 1997
(Unaudited)
NOTE A - GENERAL
Electric & Gas Technology, Inc.("the Company"or "ELGT") was
organized under the laws of the State of Texas on March 18, 1985,
to serve as a holding company for operating subsidiary
corporations. The Company presently is the owner of 100% of
Retech, which currently owns 80% of ABI and the Company owns
91.5% of AMT and 100% of Reynolds, Hydel and Fridcorp, and,
through such subsidiaries, operates in four distinct business
segments: (1) production of atmospheric water, filtration and
enhanced water products (AMT); (2) the manufacture and sale of
natural gas measurement, metering and odorization equipment
(Reynolds); (3) the manufacture and sale of electric meter
enclosures and pole-line hardware for the electric utility
industry and the general public (Hydel); and (4) the manufacture
of vacuum-form and injection-mold products (Fridcorp). The
entrance into the Water Industry will be the major focus for the
future development and growth on the Company. Effective October
1, 1997 and July 31, 1997, the Company discontinued the
operations of its defense and metal fabrication segments,
respectively which previously were engaged in the design and
manufacture of defense electronic components (SMI) and the
manufacture and sale of precision metal enclosures for
telecommunication and computer equipment (Logic), respectively.
The Company sold its Canadian heating division and its U.S. meter
socket and Test Switch divisions during fiscal 1996 and 1995.
These operations were part of the electric segment.
The accompanying condensed financial statements have been
prepared in accordance with the regulations of the Securities and
Exchange Commission (SEC) for inclusion in the Company's
Quarterly Report on Form 10-Q. They are subject to year-end
audit adjustments; however, they reflect all adjustments of a
normal recurring nature which are, in the opinion of Management,
necessary for a fair statement of the results of operations for
the interim periods.
The statements were prepared using generally accepted accounting
principles. As permitted by the SEC, the statements depart from
generally accepted accounting disclosure principles in that
certain data is combined, condensed or summarized that would
otherwise be reported separately and certain disclosures of the
type that were made in the Notes to Financial Statements for the
year ended July 31, 1997 have been omitted, even though they are
necessary for a fair presentation of the financial position at
October 31, 1997 and 1996 and the results of operations and cash
flows for the periods then ended.
7
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
October 31, 1997
(Unaudited)
NOTE B - INVENTORIES
Inventories are comprised as follows:
October 31, 1997 July 31, 1997
Raw Materials $1,255,382 $1,256,845
Work in process 294,487 312,226
Finished Goods 1,663,400 1,614,656
$3,213,269 $3,183,727
NOTE C - COMMON AND PREFERRED STOCK AND EARNINGS PER SHARE
Earnings per common share is based on the average weighted shares
outstanding during the periods reported on. Fully diluted shares
assume conversion of the 90,000 of $10 par value preferred stock
into approximately 600,000 shares of common stock using an
approximate market value of $1.50 per share (See the following
paragraph regarding any ultimate conversion).
On December 15, 1995, the Company closed on a Note Purchase
Agreement with Allied Products Corporation ("Allied"), thereby
obtaining Allied's right, title and interest in and to a certain
Promissory Note and all security existing thereunder and
obligations of Cooper Manufacturing Corporation ("Cooper") under
this Note and the Facility Agreement formerly executed by Cooper
and its shareholders in exchange for $100,0000 in cash and newly
issued, 90,000 shares of, Series A, $10.00 par value, 7%
Convertible Preferred stock of the Company. The promissory note
was due on December 31, 1995 and demand for payment was made on
Cooper and its guarantors. The preferred stock is convertible
into common stock of the Company at the ratio of two shares of
common stock for each share of preferred stock. Each holder of
record of the shares of preferred stock is entitled to one vote
per share equal to the voting rights of the common shareholders.
The Company has agreed to make whole any deficiency upon
conversion and subsequent sale after December 31, 1997 of the
Company's common stock for less than $900,000. The Company's
common stock is trading at approximately $1.50 per share which if
sold at that price would require 600,000 shares to be sold to
retire the obligation to Allied. The Company is of the opinion
that the consideration paid for the Allied note will require an
adjustment due to Cooper's bankruptcy filing based on Allied's
lack of disclosure regarding the threat of eminent bankruptcy by
the debtor. Any final conversion to the Company's common stock
is uncertain.
8
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
October 31, 1997
(Unaudited)
NOTE C - COMMON AND PREFERRED STOCK AND EARNINGS PER
SHARE(Continued)
The individuals whose stock was pledged and who personally
guaranteed the Allied Note, petitioned the court on behalf of
Cooper to file for protection under the U.S. Bankruptcy laws in a
Houston, Texas court. Effective July 31, 1997, the Company
reduced its investment in Cooper to $350,000, the amount
anticipated to be recovered under the bankruptcy. On November
21, 1997, the bankruptcy court confirmed the debtor's Plan (Cabec
Energy Corp.) which provides the Company with $700,000 in cash,
notes totaling $220,000, a royalty of 3% of new rigs sold and
1,000,000 shares of Cabec Energy Corp. common stock. Based on
the consideration to be received under the confirmed Plan, the
Company adjusted its investment in Cooper to approximately
$1,200,000.
NOTE D - DISPOSITIONS
The Company sold its defense (SMI) and metal fabrication (Logic
and Precision) segments effective October 1, 1997 and July 31,
1997, respectively and accordingly, the financial statements have
been reclassified to reflect these segments as discontinued
operations. The Company has entered into an agreement to sale SMI
with its current management and will receive cash of $100,000, a
note for $900,000 and a contingent payment based on a future
royalty. Such note and deferred gain are grouped in other assets
at October 31, 1997 and any gain will be recognized as cash is
received. Proceeds from the sale of the metal fabrication
segment amounted to approximately $20,850,000 with a
corresponding gain of approximately $12,650,000 and was recorded
effective July 31, 1997. Sales, cost of goods sold, selling,
general and administrative expense and other for three months
ended October 31, 1997 and 1996 were as follows:
1997 1996
Sales $ 581,790 $6,040,988
Cost of goods sold 516,342 4,066,976
Selling, general and administrative 329,738 1,055,148
Other 59,327 190,859
Discontinued operations $(323,617) $ 728,005
9
NOTE F - INDUSTRY SEGMENT DATA:
<TABLE>
The Company's business is primarily comprised of four industry segments: i. water (AMT);
ii. natural gas measurement and recording devices and odorization (Reynolds); iii.
electrical components and enclosures (Hydel); and v. injection molding and thermoforming
plastic components (Fridcorp) as set forth below. Operating profits represent total sales
less cost of sales and general and administrative expenses.
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended October 31, 1997
General
Water Gas Electric Plastic Corporate Consolidated
Sales $ 52,105 $607,651 $2,117,026 $336,894 $ - $3,113,676
Cost of goods sold 80,591 347,184 1,691,345 241,866 - 2,360,986
Selling, gen. & adm. 72,715 344,032 363,047 78,693 336,212 1,194,699
Operating profit(loss) (101,201) (83,565) 62,634 16,335 (336,212) (442,009)
Interest, net - (20,835) (22,972) (7,902) 2,610 (49,099)
Other income(expense) - 21,113 - - 916,371 937,484
Net earnings(loss) from continuing
operations before income taxes $(101,201) $(83,287) $ 39,662 $ 8,433 $582,769 $ 446,376
Assets:
Receivables $15,790 $342,289 $1,278,620 $165,144 $ - $1,801,843
Inventory $423,090 $818,892 $1,839,976 $131,311 $ - $3,213,269
Total assets $639,633 $1,900,483 $4,756,670 $702,424 $14,112,464 $22,111,674
Depreciation $ - $40,591 $33,778 $ 5,577 $3,646 $83,592
Additions PP&E $9,587 $3,319 $(6,568) $2,019 $1,378 $9,735
</TABLE>
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company, through its subsidiaries, operates within four
separate industries. These are (i) production of atmospheric
water, filtration and enhanced water products; (ii) the
manufacture of natural gas measurement equipment and gas
odorization products; (iii) the manufacture and sale of metal
enclosures and other electrical equipment for use in the electric
utility industry; and (iv) the manufacture of vacuum-form and
injection-mold products.
Results of Operations
Summary. The Company reported net earnings (loss) from
continuing operations and net earnings of $446,376 and $(194,472)
and $122,759 and $533,533 for the three months ended October 31,
1997 and 1996, respectively. Operating income decreased by
$(185,445) to $(105,797) the result of higher general and
administrative expenses and reduced revenues and operating
profits in the gas segment. The first quarter of fiscal 1997 was
benefited by the favorable treatment under the debtor's confirmed
Plan for Cooper Manufacturing Corporation in bankruptcy. Gross
margins declined from 27.72% to 24.17%. Selling, general and
administrative expenses as a relationship to revenues at the
segment level increased from 25.16% to 27.57% of revenues. Net
interest cost decreased due mainly to decreased borrowing and
earnings on short-term investments.
Increases(decreases) for the three months period ended October
31, 1997, as compared with the similar period of 1996, for key
operating data were as follows:
Three Months Ended
October 31,1997
Increase Percent
(Decrease) Change
Operating Revenues $7,951 .26
Operating Income (185,445) (232.83)
Earnings (loss) from continuing operations
before income taxes 307,287 158.01
Net Earnings Per Share (.06) (85.71)
11
<PAGE>
The following table represents the changes [increase/(decrease)]
in operating revenues, operating income and net earnings before
income taxes by the respective industry segments when compared to
the previous period:
Three Months Ended
October 31,1997
Increase
(Decrease) Percent
Operating Revenues:
Water $ 52,105 655.33
Gas (299,553) (3,767.49)
Electric 238,567 3,000.46
Plastics 16,832 211.70
$ 7,951 100.00
Operating Income (Loss):
Water $ (101,201) (54.57)
Gas (146,250) (78.86)
Electric 68,656 37.02
Plastics (6,650) (3.59)
(185,445) 100.00
General Corporate (182,319)
Other Income (Expense) 675,051
Earnings from continuing operations
before Income Taxes $ 307,287
Water revenues amounted to $52,105 which were essentially sales
of a few demonstrators of this segments "Watermaker" product.
Expenses were $153,306, including further development of a
business plan and marketing expenses. While the Company has been
working on this project for sometime, only recently has any
meaningful activity taken place.
Gas revenues decreased by $(299,553) for the three months ended
October 31, 1997. Operating income decreased by $(146,250) for
the three months ended October 31, 1997, resulting in operating
loss of $(83,565). Selling, general and administrative expenses
increased with declining revenues, resulting in the operating
loss. Staffing levels remained high due to an anticipated
development contract for a new meter product.
12
<PAGE>
Electric revenues increased for the three months ended October
31, 1997 by $238,567. Gross margins for the three months
remained relatively unchanged at 20.11%. Operating profits
increased by $ 68,656 due to the lower carrying cost of the
Paris, Texas facility and improved performance in the Canadian
operation. The electric segment now consist of only the Canadian
meter socket and pole line hardware product lines selling almost
entirely in the Canadian markets.
Plastics revenues increased by $16,832 for the three months ended
October 31, 1997. With revenues remaining relatively unchanged,
operating profits decreased by $(6,650). The decreases in
operating profits were due to higher selling, general and
administrative expenses.
With the exception of expense relationships discussed above in
the specific segment discussion, such other relationships remain
consistent. Operating profits decreased by 5.96%, the effect of
reduced margins (3.55)% and increased selling, general and
administrative expense of (2.42)%, discussed above, for the three
months ended October 31, 1997.
Liquidity and Capital Resources
Liquidity. Current assets of the Company totaled $16,593,051 at
October 31, 1997, down from current assets of $19,597,190 at July
31, 1997, or a decrease of $(3,004,139). Current liabilities
decreased by $(1,297,602), resulting in a decrease in working
capital (current assets less current liabilities) to $12,961,306
at October 31, 1997, from $14,707,843 at July 31, 1997. The
Company believes that it has and will generate sufficient cash to
meet its working capital requirements and debt obligations.
Hydel has a working capital line-of-credit with a Canadian bank
in the amount of approximately $1,500,000. The Canadian credit
facility is secured by receivables, inventories and equipment of
Hydel.
The Company continues to borrow under its CIT Group
Credit/Finance, Inc. revolving and term loan facility. Borrowing
under the revolving portion is based on eligible accounts
receivable and inventory. The outstanding revolving loan balance
was $459,955 and the term loan balance was $275,095 at October
31, 1997.
Capital Expenditures
For Fiscal 1997, the Company (and its subsidiaries) does not
anticipate any significant capital expenditures, other than in
the ordinary course of replacing worn-out or obsolete machinery
and equipment utilized by its subsidiaries.
13
<PAGE>
Dividend Policy
No cash dividends have been declared by the Company's Board of
Directors since the Company's inception. The Company does not
contemplate paying cash dividends on its common stock in the
foreseeable future since it intends to utilize it cash flow to
invest in its businesses. Cumulative dividends on the Series A,
7% Convertible Preferred Stock, have not been paid and amounted
to $118,833 as of October 31, 1997.
Other Business Matters
Accounting for Post-Retirement Benefits. The Company
provides no post-retirement benefits; therefore, FASB No. 106
will have no impact on the Company's financial position or result
of operations.
Inflation. The Company does not expect the current effects
of inflation to have any effect on its operations in the
foreseeable future. The largest single impact affecting the
Company's overall operations is the general state of the economy
and principally new home construction.
PART II
ITEM 1. LEGAL PROCEEDINGS
The former manufacturers representative of Logic, Ammon & Rizos
Co, has filed a suit against the Company, the Company's chairman
of the board, Logic, and New Logic Design Metals, Inc. ("New
Logic")(the purchaser of the assets) for unpaid fees, assumed by
New Logic and a previous adjustment in prior fees plus
prospective fee from New Logic's sales. The case is in early
stages of discovery; management believes there will be no
material effect on the Company.
Allied Products Co has sued the Company under the Preferred Stock
issued by the Company in connection with its investment in Cooper
Manufacturing Corporation ("Cooper") and the rights pertaining
thereto. The suit was filed in the Eastern District of Illinois
(Chicago) and currently, all activity is directed at
jurisdictional issues. The Company has filed a counter suit
alleging security violations (10b5) demanding return of its
Preferred Stock. In addition, the Company has been advised by
the Cooper debtor-in-possession that they plan to initiate
litigation claiming preference violations by Allied. The
ultimate resolution of this case will depend in part upon the
outcome of the Cooper bankruptcy case. The bankruptcy court
confirmed the debtor's Plan of Reorganization on November 21,
1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)NONE
(b)Reports on Form 8-K.
NONE
14
<PAGE>
SIGNATURE
Pursuant to the requirements 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.
ELECTRIC & GAS TECHNOLOGY, INC.
/s/ Edmund W. Bailey
Edmund W. Bailey
Vice President and
Chief Financial Officer
Dated: December 1, 1997
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> OCT-31-1997
<CASH> 11,497,181
<SECURITIES> 0
<RECEIVABLES> 1,808,472
<ALLOWANCES> 6,629
<INVENTORY> 3,213,269
<CURRENT-ASSETS> 16,593,051
<PP&E> 5,823,498
<DEPRECIATION> 3,413,634
<TOTAL-ASSETS> 22,111,674
<CURRENT-LIABILITIES> 3,631,745
<BONDS> 0
0
900,000
<COMMON> 82,504
<OTHER-SE> 15,157,803
<TOTAL-LIABILITY-AND-EQUITY> 22,111,674
<SALES> 3,113,676
<TOTAL-REVENUES> 3,113,676
<CGS> 2,360,986
<TOTAL-COSTS> 3,555,655
<OTHER-EXPENSES> (888,385)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 121,836
<INCOME-PRETAX> 446,376
<INCOME-TAX> 0
<INCOME-CONTINUING> 446,376
<DISCONTINUED> (323,617)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 122,759
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
