UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1999
-------------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________________
001-13207
Commission file number 000-22827
DISCAS, INC.
................................................................................
(Exact name of registrant as specified in its charter)
DELAWARE 06-1175400
................................................................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
567-1 South Leonard Street, Waterbury, Connecticut 06708
................................................................................
(Address of principal executive offices) (Zip Code)
203-753-5147
................................................................................
(Registrant's telephone number, including area code)
................................................................................
(Former name, former address and former fiscal year,
if changed since last report)
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 Exchange Act of
l934 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.
|X| Yes |_| No
The number of shares outstanding of the issuer's single class of common
stock as of March 1, 1999 was 3,290,776.
Transitional Small Business Disclosure Format (check one)
|_| Yes |X| No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED BALANCE SHEETS
January 31, April 30,
1999 1998
---------- ----------
(unaudited) (audited)
ASSETS
Current assets:
Cash and equivalents $ 152,754 $ 464,619
Accounts receivable (net) 712,593 909,296
Inventory 1,046,759 976,967
Other current assets 64,976 56,868
---------- ----------
Total current assets 1,977,082 2,407,750
---------- ----------
Property and equipment (net) 2,303,449 2,434,584
Other assets 309,767 260,495
---------- ----------
$4,590,298 $5,102,829
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,047,016 $ 895,978
Accrued expenses 21,001 92,962
Line of credit 1,173,023 1,273,023
Current portion of capital leases 38,950 35,885
Current portion of long-term debt 378,268 425,335
---------- ----------
Total current liabilities 2,658,258 2,723,183
---------- ----------
Capital leases, excluding current portion 42,389 83,854
Long-term debt, excluding current portion 105,772 187,888
Related party loans 112,312 236,156
Stockholders' equity:
Common stock, par value $.0001 per share:
Authorized 20,000,000 shares
Outstanding 3,260,776 and 3,207,200 shares,
respectively 329 321
Additional paid in capital 4,655,116 4,459,305
Accumulated deficit (2,983,878) (2,587,878)
---------- ----------
Total stockholders' equity 1,671,567 1,871,748
---------- ----------
$4,590,298 $5,102,829
========== ==========
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
January 31, January 31,
1999 1998 1999 1998
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Sales $ 719,866 $1,167,937 $3,288,815 $ 4,543,904
Cost of sales 697,739 1,246,223 2,765,808 3,926,209
--------- ---------- ---------- -----------
Gross profit (loss) 22,127 (78,286) 523,007 617,695
Selling, general and administrative expenses 332,937 811,052 981,329 1,874,113
--------- ---------- ---------- -----------
Income (loss) from operations (310,810) (889,338) (458,322) (1,256,418)
Other income (expense):
Amortization of deferred financing costs - - - (145,000)
Interest expense (35,506) (14,868) (104,528) (144,309)
Gain on sale of fixed assets 43,006
--------- ---------- ---------- -----------
- - -
Net other expense (35,506) (14,868) (61,522) (289,309)
Income (loss) before extraordinary items (346,316) (904,206) (519,844) (1,545,727)
Extraordinary items
- forgiveness of debt income - - 123,844 -
- loss on extinguishment of debt (287,463)
--------- ---------- ---------- -----------
- - -
Net income (loss) $(346,316) $(904,206) $(396,000) $(1,833,190)
========== ========== ========== ============
Average number of shares outstanding 3,282,776 3,288,750 3,260,648 2,961,214
========= ========= ========= =========
Net income (loss) per share - basic and diluted
Income (loss) before extraordinary items $(.11) $(.27) $(.16) $(.52)
Extraordinary items
- forgiveness of debt income - - .04 -
- loss on extinguishment of debt - - - (.10)
------ ------ ------ ------
Net income (loss) $(.11) $(.27) $(.12) $(.62)
====== ====== ====== ======
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
January 31,
1999 1998
----------- -----------
Cash flows from operating activities:
<S> <C> <C>
Cash received from customers $ 3,471,144 $ 4,946,123
Cash paid to suppliers and employees (3,408,934) (6,245,685)
Interest paid (104,528) (144,309)
----------- -----------
Net cash provided (used) by operating activities (42,318) (1,443,871)
----------- -----------
Cash flows from investing activities:
Payments on other assets (57,380) -
Purchases of fixed assets (112,320) (729,266)
----------- -----------
Net cash used by investing activities (169,700) (729,266)
----------- -----------
Cash flows from financing activities:
Net proceeds from offering of stock - 3,178,850
Principal payments on long-term debt (129,183) (885,311)
Principal payments on capital leases (38,399) (16,347)
Proceeds from credit line (100,000) 926,000
Proceeds from issuance of common stock and warrants 140,000 -
Other 27,735 -
----------- -----------
Net cash provided by financing activities (99,847) 3,203,192
----------- -----------
Net increase (decrease) in cash (311,865) 1,030,055
Cash and equivalents at beginning of period 464,619 173,100
----------- -----------
Cash and equivalents at end of period $ 152,754 $ 1,203,155
=========== ===========
Reconciliation of net loss to cash provided (used) by
operating activities:
Net loss $ (396,000) $(1,833,190)
----------- -----------
Items which did not (provide) use cash:
Depreciation and amortization 265,098 321,407
Extraordinary item - forgiveness of debt income (123,844) -
Amortization of deferred financing costs - 145,000
Extraordinary item - loss on extinguishment of debt - 287,463
Working capital changes which provided (used) cash:
Accounts receivable 196,703 402,219
Inventory (69,792) (107,260)
Other assets (49,272) (52,667)
Prepaid expenses (8,108) (75,265)
Accounts payable 169,038 (468,569)
Accrued expenses (26,141) (63,009)
----------- -----------
Net cash provided (used) by operating activities $ (42,318) $(1,443,871)
============ ============
Noncash investing and financing activities:
Issuance of common stock in lieu of cash $ 45,819 $ -
============ ===========
Issuance of warrants in lieu of cash $ 10,000 $ -
============ ===========
Exchange of convertible debt for stock $ - $ 1,000,000
============ ===========
Other $ - $ 34,593
============ ===========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
DISCAS, INC.
January 31, 1999
Item 1. Financial Statements - Notes
1. Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and in the opinion
of the Company include all adjustments necessary to present fairly the results
of operations, financial position and changes in cash flow. All adjustments are
of a normal and recurring nature.
The results of operations for the interim periods are not necessarily indicative
of the results expected for the full year.
2. Inventories
Inventories are stated at the lower of cost or market as determined by the
average cost method.
Inventories consist of the following:
January 31, 1999 April 30, 1998
---------------- --------------
Finished goods $ 497,302 $306,707
Raw materials and supplies 549,457 670,260
---------- --------
$1,046,759 $976,967
========== ========
3. Property and equipment
Property and equipment are stated at cost and are depreciated over their useful
lives of 7-10 years. Depreciation is computed by using the straight-line method
for financial reporting purposes and straight-line and accelerated methods for
income tax purposes. Maintenance and repairs are charged to expense as incurred.
Expenditures for major renewals and betterments that extend the useful lives of
the assets are capitalized. The cost and related accumulated depreciation of
property and equipment retired or disposed of are removed from the accounts and
the resulting gains or losses are reflected in income.
<PAGE>
Item 1. Financial Statements - Notes (Cont'd)
Property and equipment consist of the following:
January 31, 1999 April 30, 1998
---------------- --------------
Machinery and equipment $3,381,378 $3,310,406
Leasehold improvements 99,191 86,091
Office equipment 154,672 144,424
Vehicles 64,556 64,556
Furniture and fixtures 29,868 29,868
---------- ----------
Total property and equipment 3,729,665 3,635,345
Less: accumulated depreciation (1,426,216) (1,200,761)
----------- -----------
Net property and equipment $2,303,449 $2,434,584
========== ==========
4. Other assets
Other assets consist of the following:
January 31, 1999 April 30, 1998
---------------- --------------
Goodwill, net $189,932 $201,137
Security deposits 71,545 59,358
Other 48,290 -
-------- --------
$309,767 $260,495
======== ========
5. Economic dependency
In the nine month period ended January 31, 1999, three customers accounted for
approximately 23% of sales (10%, 7% and 6%, respectively); in the nine month
period ended January 31, 1998, two customers accounted for approximately 27% of
sales (15% and 12%, respectively).
6. Stockholders' equity
During the nine months ended January 31, 1999, warrants to acquire 70,000 shares
of the Company's common stock were exercised and 13,576 shares of common stock
were issued to satisfy obligations of the Company.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
7. Extraordinary item
During the nine months ended January 31, 1999, an extraordinary gain of $123,844
resulted from forgiveness of debt to the President of the Company. The debt was
originally incurred by the President of the Company voluntarily deferring a
portion of his salary. In the nine month period ended January 31, 1998, the
extinguishment of debt resulted in an extraordinary loss of $287,463.
General
The Company produces proprietary plastic and rubber compounds and a broad line
of injection molded horticultural containers using a variety of recycled and
prime (virgin) materials. The Company has extensive experience in polymer
technology, and has commercialized proprietary formulations used in the
manufacturing of plastics in the horticulture, packaging, footwear, aeronautic,
military, automotive and consumer products sectors.
Statements included in this report which are not historical in nature, are
intended to be, and are hereby identified as "forward looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended. The Company cautions readers that forward looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs, and income, are subject to certain risks and uncertainties,
certain of which are described herein, that could cause actual results to differ
materially from those indicated in the forward looking statements.
As explained in the October 31, 1998 Form 10-QSB, Discas has been implementing,
over the past several months, a revised business plan to consolidate operations
and significantly reduce fixed overhead with a view towards returning the
Company to profitability as soon as possible. This plan de-emphasizes recycling
of commodity plastics as a core business until the price of prime plastics,
against which our recycled materials compete, returns to normal market levels.
It is estimated that the current prices will continue for another year.
The Company's new business plan emphasizes expansion of Discas' profitable
molded products and specialty compounds businesses through a series of mergers,
acquisitions and new product introductions.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
On February 10, 1999, Discas announced that it had signed a non-binding letter
of intent to merge Beres Industries into Discas. Beres Industries is a Lakewood,
NJ injection molding and mold design company. The intent is to move our Christie
molded products business out of its Kenilworth, NJ leased facility into the
Beres owned facility, saving approximately $200,000 in annual fixed costs for
rent, taxes and building related costs. Concurrent with the Beres negotiations,
Discas is pursuing additional strategic opportunities which will provide Discas
with a strong platform to grow its molded products business.
Consummation of the Beres merger will be subject to satisfactory completion of
due diligence, execution of an Agreement of Merger, shareholder approval and
other matters. The proforma for the combined companies would have Discas sales
increased by at least 40%, fixed overhead as a percent of sales would be
lowered, molded products productivity would be improved, and Discas would be
poised to restructure its debt financing. The three business divisions of the
combined companies would consist of molded products, polymer materials and
technical services (including Beres industry-recognized toolmaking).
Discas is also in continued merger discussions with Newgrange LLC, an
international manufacturer of specialty thermoplastic materials and molded
components primarily for the footwear industry. The companies have proposed a
non-binding agreement to merge, and management from Newgrange and Discas have
been involved in strategic meetings in recent weeks. Newgrange, with operations
in North America, Europe and Asia, currently has sales of approximately $70
million. The potential success of accomplishing either of these business
combinations is not determinable at this time.
During the first nine months, the Company improved its operating effectiveness
and reduced SG&A expenses (in total dollars and as a percent of sales) to better
match the lower sales levels caused by seasonal factors, the pending relocation
of our molded products business, and the decision to reduce sales to marginal
accounts, particularly in the commodity compounds sector.
Although relocating Christie Products will clearly benefit the Company, the
delay in doing so has been disruptive and has negatively impacted Christie's
third quarter results. Sales have slowed and productivity has suffered.
Retention of experienced labor has been difficult; causing Christie to use its
higher cost supervisory labor for extended periods of time. Machines have been
disconnected anticipating an earlier move, then reconnected. These are normal
transition problems and Discas management is on-site to minimize the disruption,
but gross profit has temporarily suffered.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
The Company's recent investment in fifteen molds for competitively priced
thin-wall pots and various traffic safety items and the enthusiastic reception
of our strategic joint venture, Better Christie Containers LLC, at the major
January trade shows makes us optimistic about improved fourth quarter sales.
However, the closing of the Kenilworth, NJ plant by April 30, 1999 may
negatively impact sales because of downtime expected with the relocation of
equipment.
Refinancing activities to replace the Company's current senior lender have not
been completed, and the Company continues to be in default on its forbearance
agreement. Talks continue with our senior lender as well as other lenders
interested in refinancing the Company. A recent asset appraisal indicates that
the nature of the Company assets can likely justify restructuring long term
asset financing to reduce short term loans. In addition, the consolidation of
our molded product business will give the Company surplus equipment which will
be sold to further reduce debt, beginning in the fourth quarter.
Discas management is dedicated to completing the complex task of restructuring
the Company for the benefit of its stockholders. Discas, along with small
manufacturers in the United States in many industries, is fighting against cheap
imports, low oil prices and cut-throat competition. Our best resources to win
this battle are a low cost manufacturing structure, superior plastic material
and processing technology, and diversified profit centers in proprietary molded
products, specialty polymer materials, tool building and custom manufacturing
services.
The Consolidated Financial Statements of the Company as of and for the quarter
ended January 31, 1999 filed as part of this Form 10-QSB have been prepared in
accordance with generally accepted accounting principles applicable to a company
on a "going concern" basis, which except as otherwise noted, contemplates the
realization of assets and the liquidation of liabilities in the ordinary course
of business; however, as a result of operating losses and current economic
conditions, such realization of assets and liquidation of liabilities are
subject to significant uncertainties. The Company's ability to continue as a
going concern is dependent on its ability to achieve profitable operations and
to restructure its bank debt. The Company is currently in default on its
existing bank debt and is in the process of finding another lending source.
However, no assurance can be given that another lending source will be found.
The Company expects to have a Year 2000 compliant computer system fully
operational by mid-1999. The Company does not expect this project to have a
significant effect on operations and further expenditures are anticipated to be
immaterial (approximately $72,000 spent in fiscal 1998).
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Results of Operations
Three Month Periods Ended January 31, 1999 and 1998
Sales decreased by $448,071, or approximately 38.4%, to $719,866 for the three
month period ended January 31, 1999, as compared to $1,167,937 for the three
month period ended January 31, 1998. The reduction in sales is attributable to
the Company's decision to reduce its commodity compounding business as well as
the pending relocation of its molded products business. Also sales for the
period ended January 31, 1998 included revenues from the discontinued
Statesville, NC polypropylene recycling operation.
Cost of goods sold decreased by $548,484, or approximately 44.0%, to $697,739
for the three month period ended January 31, 1999, compared to $1,246,223 for
the three month period ended January 31, 1998. The decrease in cost of goods
sold was attributable to lower raw material costs, improved processing
efficiencies and the reduced sales volume. Cost of goods sold as a percentage of
sales was 96.9% for the three month period ended January 31, 1999 as compared to
106.7% in 1998. The decrease in cost of sales as a percent of sales is primarily
the result of lower material costs, partially offset by the negative impact of
the pending Christie Products relocation discussed above. Also a $100,000 (8.6%
of sales) material inventory write-down to market and the Statesville, NC
facility startup costs were included in the three month period ended January 31,
1998 (none in fiscal 1999).
Gross profit increased by $100,413 to $22,127 for the three month period ended
January 31, 1999, as compared to a loss of $78,286 for the three month period
ended January 31, 1998. The increase in gross profit is attributable to cost
reductions that more than offset the sales decline.
Selling, general and administrative costs decreased by $478,115, or
approximately 59.0%, to $332,937 for the three month period ended January 31,
1999 as compared to $811,052 for the three month period ended January 31, 1998.
The decrease is attributable to the Company's consolidation moves and
restructuring discussed in the October 31, 1998 Form 10-QSB. In addition, costs
associated with the initial public offering and the Christie acquisition and
provisions for uncollectible accounts were included in the three month period
ended January 31, 1998 (none in fiscal 1999).
Operating loss decreased by $578,528 to $310,810 for the current three month
period ended January 31, 1999 as compared to a loss of $889,338 for the three
month period ended January 31, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Net loss decreased by $557,890 to $346,316 for the three month period ended
January 31, 1999 as compared to a loss of $904,206 for the three month period
ended January 31, 1998. The reduced loss was primarily attributable to
reductions in production, administrative and financing costs that more than
offset sales decreases.
Nine Month Periods Ended January 31, 1999 and 1998
Sales decreased by $1,255,089, or approximately 27.6%, to $3,288,815 for the
nine month period ended January 31, 1999, as compared to $4,543,904 for the nine
month period ended January 31, 1998.
Cost of goods sold decreased by $1,160,401, or approximately 29.6%, to
$2,765,808 for the nine month period ended January 31, 1999, compared to
$3,926,209 for the nine month period ended January 31, 1998. The decrease in
cost of goods sold was attributable to the factors discussed above. Cost of
goods sold as a percentage of sales was 84.1% for the nine month period ended
January 31, 1999, as compared to 86.4% (84.2% excluding write-down) for the nine
month period ended January 31, 1998.
Gross profit decreased by $94,688, or approximately 15.3%, to $523,007 for the
nine month period ended January 31, 1999, as compared to $617,695 for the nine
month period ended January 31, 1998. The decrease was the result of lower sales
volume.
Selling, general and administrative costs decreased by $892,784, or
approximately 47.6%, to $981,329 for the nine month period ended January 31,
1999 as compared to $1,874,113 for the nine month period ended January 31, 1998.
The decrease is attributable to the factors mentioned above.
Operating loss decreased by $798,096 to a loss of $458,322 for the current nine
month period ended January 31, 1999 as compared to a loss of $1,256,418 for the
nine month period ended January 31, 1998.
Deferred financing charges of $145,000 were amortized in the nine month period
ended January 31, 1998 (none in fiscal 1999) and this noncash charge is included
in other income (expense). In addition, the related debt was extinguished in the
nine month period ended January 31, 1998 and the remaining unamortized deferred
financing charges ($287,463) were expensed.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Net loss decreased by $1,437,190 to $396,000 for the nine month period ended
January 31, 1999 as compared to $1,833,190 for the nine month period ended
January 31, 1998. The decrease was primarily attributable to reductions in
production, administrative and financing costs that more than offset sales
decreases. Also gains on the sale of fixed assets ($43,006) and on the
President's forgiveness of deferred compensation ($123,844) occurred during the
nine month period ending January 31, 1999 versus the charges mentioned above for
the nine month period ended January 31, 1998.
Liquidity and Capital Resources
Financial Condition
The Company's operations for the year ended April 30, 1998 produced severely
depressed results because of a persistent negative supply/demand relationship in
the polypropylene industry which was caused, in part, by over capacity, the
economic conditions in Asia and reduced prices for crude oil. As a result of
these conditions, the operations of the Company resulted in the Company being in
violation of certain financial covenants under its debt agreement with a
commercial bank and the Company's working capital position eroded to a
significant degree. The Company's primary lender entered into a forbearance
agreement with the Company which requires the Company to replace that senior
lender. This has not been completed and the Company continues to be in default
on its forbearance agreement. Talks continue with our senior lender as well as
with other lenders interested in refinancing the Company. The Company believes
that consummation of the business combination(s) discussed above will position
it to restructure its debt financing. However, if a satisfactory refinancing
arrangement is not reached, this situation raises substantial doubt about the
Company's ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Cash and cash equivalents at January 31, 1999 amount to $152,754. If the
business combination(s) are consummated and a new lender is found, management
believes the Company can continue as a going concern because it has
significantly restructured its operations and made significant reductions in its
work force. As noted above, the results of operations for the quarter ended
January 31, 1999 are significantly improved over the quarter ended January 31,
1998. The Company believes it is positioned to show continuing improvements from
its operations although it cannot predict with certainty when, if ever,
sustained profitable operations will be achieved.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
On February 9, 1999, Discas securities were moved from the NASDAQ SmallCap
Market to the OTC Bulletin Board. We believe that upon consummation of the
business combination(s) discussed above, the Company would meet NASDAQ's listing
criteria. Consequently, on February 24, 1999, the Company submitted a request
for review of the Qualifications Hearing Panel decision. The Company is awaiting
the Review Panel's response. If the Company's securities are not reinstated for
NASDAQ listing, it could adversely impact the Company's ability to raise
additional equity capital.
<PAGE>
PART II - OTHER INFORMATION
DISCAS, INC.
January 31, 1999
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Item Number
27 Financial Data Schedule (EDGAR filing only).
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
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:
DISCAS, INC.
Registrant
Date: March 15, 1999 By /s/ Patrick A. DePaolo, Sr.
------------------------------------
Patrick A. DePaolo, Sr.
Chairman, President and CEO
By /s/ Ray G. Paulin
------------------------------------
Ray G. Paulin
Controller, Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JAN-31-1999
<EXCHANGE-RATE> 1
<CASH> 152,754
<SECURITIES> 0
<RECEIVABLES> 745,565
<ALLOWANCES> 32,972
<INVENTORY> 1,046,759
<CURRENT-ASSETS> 1,977,082
<PP&E> 3,729,665
<DEPRECIATION> 1,426,216
<TOTAL-ASSETS> 4,590,298
<CURRENT-LIABILITIES> 2,658,258
<BONDS> 0
0
0
<COMMON> 329
<OTHER-SE> 1,671,238
<TOTAL-LIABILITY-AND-EQUITY> 4,590,298
<SALES> 3,288,815
<TOTAL-REVENUES> 3,288,815
<CGS> 2,765,808
<TOTAL-COSTS> 3,747,137
<OTHER-EXPENSES> (43,006)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,528
<INCOME-PRETAX> (519,844)
<INCOME-TAX> 0
<INCOME-CONTINUING> (519,844)
<DISCONTINUED> 0
<EXTRAORDINARY> 123,844
<CHANGES> 0
<NET-INCOME> (396,000)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
