<PAGE> 1
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 December 31, 1997
Commission file number 0-15148
---------
SCIENTIFIC NRG, INCORPORATED
(Exact name of registrant as specified in its charter)
Minnesota
(State or Other Jurisdiction of Incorporation or Organization)
2246 Lindsay Way
Glendora, California 91740
(Address of Principal Executive Offices)
41-1457271
(I.R.S. Employer Identification No.)
Registrant's telephone number, including area code: (909) 305-0322
------------
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
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. At January 31, 1998 the
registrant had 4,203,423 shares of common stock, no par value, issued and
outstanding.
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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PART I
ITEM 1. FINANCIAL STATEMENTS. 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. 3
PART II
ITEM 1. LEGAL PROCEEDINGS. 5
ITEM 2. CHANGES IN SECURITIES. 5
ITEM 3. DEFAULT UPON SENIOR SECURITIES. 5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS. 5
ITEM 5. OTHER INFORMATION. 5
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 5
</TABLE>
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS.
The Company's unaudited condensed balance sheet as of the end of the
Company's most recent quarter, December 31, 1997 and unaudited condensed
statements of operations for the three and six month period and statements of
cash flow for the six month period up to the date of the balance sheet and the
comparable period of the preceding fiscal year are attached hereto as pages F-1
through F-6 and are incorporated herein by this reference.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction with
the Company's audited financial statements and management's Discussion and
Analysis of Financial Condition and results of Operations included in the
Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange
Commission on October 15, 1997.
The following discussion includes "forward looking statements" ( "FLS" )
that represent management's assessment of future performance and its goals.
There are no assurances that the forward looking statements will be achieved.
RESULTS OF OPERATIONS
The three and six month period ended December 31, 1997 compared to the
three and six month period ended December 31, 1996.
The Company realized a net loss of $8,801, or $.01 per share for the
three month period ended December 31, 1997, compared to a net loss of $21,206,
or $.01 per share for the corresponding period of the prior fiscal year. The
Company realized a net loss of $50,006, or $.01 per share for the six month
period ended December 31, 1997, compared to a net loss of $111,974, or $.04 per
share for the corresponding period of the prior fiscal year. Management
attributes these decreased losses to the Company's reduced overhead and reduced
interest expense.
Net sales of the Company during the three months ended December 31, 1997
increased $14,041 or 9.5% from the corresponding period of the prior fiscal
year. Net sales of the Company during the six months ended December 31, 1997
increased $20,521 or 8.7% from the corresponding period of the prior fiscal
year. Management believes it has made substantial progress with relationships
with sales reps. Management plans for continued sales increases from reps and
the affiliated company Parke Industries (FLS), ( See " Other Information" ).
Gross profit from operations during the three months ended December 31,
1997 increased $39,958 or 152.3% from the gross profit from the corresponding
period of the prior fiscal year. Gross profit from operations during the six
months ended December 31, 1997 increased $27,958 or 42.3% from the gross profit
from the corresponding period of the prior fiscal year. Management attributes
this increase to the Company's improvement of inventory management.
<PAGE> 4
General, administrative and selling costs for the three months ended
December 31, 1997 decreased by $10,553, and decreased as a percentage of sales
from 57.0% of sales to 45.6% of sales in comparison to the corresponding period
of the prior fiscal year. General, administrative and selling costs for the six
months ended December 31, 1997 decreased by $55,864, and decreased as a
percentage of sales from 84.4% of sales to 55.8% of sales in comparison to the
corresponding period of the prior fiscal year. The reduction in overhead for the
three and six months ended December 31, 1997 indicates management's continuing
efforts to reduce overhead. However, management is contemplating plans that
would significantly increase sales (see "Other Information). This would also
create a need to substantially increase the expenditures for administrative
costs. Although management believes this is the appropriate course of action,
such plans most likely will increase the percentage of administration costs to
sales in the short term, until sales volume actually increases under the plan.
Management plans to budget for a six month lag time from the events of hiring
additional administration to the realization of a significant improvement in
sales volume (FLS).
Other income for the three and six months ended December 31, 1996
related to the increase of prior year discounts negotiated with vendors, less a
loss from the disposal of the Company's outdated computer equipment. No such
items were reportable for the three and six months ended December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The six month period ended December 31, 1997 compared to the six month
period ended December 31, 1996.
The Company had a negative cash flow from operating activities for the
six month period ended December 31, 1997 of $705 compared to a negative cash
flow of $92,953 for the six month period ended December 31, 1996. The 1997
improvement of cash flow from operating activities compared to the previous
period can be attributed to a reduction in overhead and the payments to vendors
on past due accounts during the three months ended December 31, 1996.
At December 31, 1997, the Company had net working capital of $ 78,341,
compared to net working capital of $96,934 at June 30, 1997, a decrease of
$18,593, which is the result of the net loss of $50,066 and partially offset by
the non-cash compensation expense which was prepaid at June 30, 1997 via the
issuance of common stock.
Management believes its plans will be sufficient to support operations
during the year ending June 30, 1998 (FLS). Part of management's operational
strategy include plans to secure additional equity to support anticipated
operations. However, there are no assurances that such efforts to improve
operating results and secure financing will be successful. The Company may be
unable to continue operations and there can be no assurances regarding the
recoverability of assets or their values upon liquidation.
<PAGE> 5
PART II
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
None. However, the next annual Meeting of Shareholders of the Company
will be held on February 21, 1997. The only scheduled vote will be to elect the
Directors of the Company.
ITEM 5. OTHER INFORMATION.
Since becoming an affiliate in 1996, Parke Industries, Inc. ("Parke")
has accounted for approximately one-third of the Company's revenue. At December
31, 1997, Parke owned eleven percent of the outstanding common stock of the
Company and held an option to acquire an additional five percent.
Subsequently, on January 31, 1998, Parke was acquired by SRS, a wholly
owned subsidiary of Carolina Power and Light. Under the purchase agreement, SRS
hired the Parke management team and bought Parke's stock in the Company and the
related stock option. Accordingly, as of January 31,1998, SRS became an
affiliate of the Company. SRS and Parke announced a strategic plan to
significantly expand SRS's presence in the energy efficient retrofit market.
Management of the Company believes that its strong ties with Parke and the plans
of its new affiliate, SRS, may lead to a substantial increase in demand for the
Company's products in the future (FLS).
In addition, the Company has been approached by persons who have
expressed a desire to see the Company play a role in the consolidation of the
energy efficient lighting products industry, particularly compact flourescent
lighting products and other products used by ESCOs on large retrofit projects.
Management of the Company plans to pursue opportunities that will enhance
shareholder value and allow the Company to compete in selected areas of the
energy efficient lighting market.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 27 - Financial Data Schedule
The following exhibits are incorporated herein by reference from the
Company's initial Form 10 filing on or about November 12, 1986 or in other
reports filed pursuant to the Securities Exchange Act of 1934, as amended.
3.1 Articles of Incorporation as in effect on the date hereof
(including Amendment thereto effective December 28, 1988).
<PAGE> 6
3.2 Articles of Incorporation as in effect on the date hereof
(including Amendment thereto effective November 20, 1996).
3.3 Bylaws.
4.1 Specimen of Issued and Outstanding Restricted Share Certificate
and reverse side thereof (see also Exhibits 3.1 and 3.3).
4.6 Incentive Stock Option Plan.
10.7 Agreement (assigning patent rights).
10.8 Agreement Between Scientific Component Systems, Inc. and NRG,
Inc., June 29, 1983.
10.9 Agreement, July, 1983 (assigning patent rights, with Exhibit
10.7 as exhibit).
10.10 Assignment of Patent Rights from Scientific Component Systems,
Inc. to NRG, Inc., April 20, 1984.
10.11 Assignment of Patent Rights from Rhett McNair and James Helling
to NRG, Inc., April 20, 1984.
10.12 Assignment of Patent Rights from Rhett McNair, James Helling,
William R. Ingles and Gerald L. Fullerton to NRG, Inc., April
20, 1984.
10.13 Agreement Assigning Patent Rights from Scientific Component
Systems, Inc., to NRG, Inc., April 20, 1984.
10.14 Assignment with Possibility of Reverter of Patent Rights from
Rhett McNair to NRG, Inc., January 21, 1986.
10.20 Form of Warrant Certificate.
10.27 New Lease for Company Headquarters in Tustin, California.
10.28 Royalty Agreement with Rhett McNair.
10.29 Consulting Agreement with MLF & Associates, Inc., April 1, 1990.
10.30 Promissory Note Payable to Oliver Washburn and Extension
Thereto.
10.31 Promissory Note Payable to Malcolm Fickel and Extension Thereto.
10.32 Promissory Note Payable to Malcolm Fickel and Extension Thereto.
10.33 Promissory Note Payable to Malcolm Fickel and Extension Thereto.
10.34 Promissory Note Payable to Malcolm Fickel and Extension Thereto.
10.35 Deferred Compensation Agreement Between the Company and Malcolm
Fickel.
10.36 Line of Credit Agreement with Bank.
<PAGE> 7
10.37 Promissory Note Payable to Peter C. Kreft.
10.38 Stock Purchase Agreement Between the Company and MLF &
Associates, Inc. Retirement Trust, April 30, 1993.
10.39 Stock Purchase Agreement Between the Company and Malcolm L.
Fickel, April 30, 1993.
10.40 Stock Purchase Agreement Between the Company and Oliver K.
Washburn, April 30, 1993.
10.41 Stock Purchase Agreement Between the Company and Peter C. Kreft,
April 30, 1993.
10.42 Stock Purchase Agreement Between the Company and Thomas C.
Moceri, April 30, 1993.
10.43 Financing Agreement Between the Company and Pre-Banc Business
Credit, Inc., May 21, 1993.
10.44 Addendum to Consulting Agreement between the Company and Malcolm
L. Fickel, June 30, 1993.
10.45 Leasing Agreement Between the Company and Auto Car Leasing
Company, September 9, 1993.
10.46 Stock Warrant Agreement Between the Company and Eddie R.
Fischer, September 9, 1993.
10.47 Note and Revolving Loan Agreement Between the Company and
William T. Moceri, IRA, November 15, 1994.
10.48 Promissory Note Payable to Thomas C. Moceri, Trustee, Thomas C.
Moceri Profit Sharing Plan, September 28, 1994.
10.49 Promissory Note Payable to Oliver Washburn, March 7, 1995.
10.50 Promissory Note Payable to Oliver Washburn, March 7, 1995.
10.51 General Release Agreement Between the Company and Peter Kreft,
June 9, 1995.
10.52 Promissory Note Payable to Oliver Washburn, September 14, 1995.
10.53 Promissory Note Payable to Oliver Washburn, November 13, 1995.
10.54 Promissory Note Payable to Oliver Washburn, April 26, 1996.
10.55 Promissory Note Payable to Oliver Washburn, July 18, 1996.
10.56 Workout Agreement dated August 30, 1996.
10.57 Secured Promissory Note to Malcolm L. Fickel, September 11,
1996.
10.58 Secured Promissory Note to Oliver K. Washburn, September 11,
1996.
<PAGE> 8
10.59 Subordinated Cash Flow Promissory Note to Oliver K. Washburn,
September 30, 1996.
28.2 Patent No. 4,520,436 (X-18 Series Downlight).
28.4 Patent No. 4,595,969 (Lamp Mounting Apparatus and Method).
28.5 Patent No. 4,641,228 (Lamp Mounting Apparatus and Method).
28.6 Patent No. 4,700,110 (Lamp Switching).
28.7 Patent No. 4,704,664 (Lamp Apparatus).
28.8 Trademarks Registered (Lightning Bolt Logo, Scientific NRG
Component Systems, SCS, X-18) and Notice of Publication of
Trademark, "Switchit".
28.9 Patent No. 4,922,393 (Lamp Apparatus).
(b) Reports on Form 8-K
No reports were filed during the quarter ended December 31, 1997 on Form
8-K.
<PAGE> 9
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.
Date: February 16, 1998
SCIENTIFIC NRG, INCORPORATED,
a Minnesota Corporation
By: /s/ Daniel W. Parke
-----------------------------------------
Name: Daniel W. Parke
Title: Chairman and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
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Signatures Date
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<S> <C>
By: /s/ Daniel W. Parke February 16, 1998
--------------------------
Name: Daniel W. Parke
Title: Chairman and CEO
By: /s/ Oliver K. Washburn February 16, 1998
--------------------------
Name: Oliver K. Washburn
Title: Treasurer and Principal
Financial Officer
</TABLE>
<PAGE> 10
SCIENTIFIC NRG, INCORPORATED
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1997 1997
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 34,595 $ 35,300
Trade receivables, less allowance for
doubtful accounts at December 31, 1997
and June 30, 1997 of $9,658 101,708 68,323
Inventories 87,344 96,720
Prepaid expenses 700 --
----------- -----------
Total current assets 224,347 200,343
EQUIPMENT AND LEASEHOLD IMPROVEMENTS,
net of accumulated depreciation of $14,771
at December 31, 1997 and $13,397 at
June 30, 1997 3,503 4,877
----------- -----------
$ 227,850 $ 205,220
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current obligations under capital leases $ 14,978 $ 14,978
Accounts payable 42,779 27,018
Accrued compensation 42,067 21,700
Other accrued expenses 46,182 39,713
----------- -----------
Total current liabilities 146,006 103,409
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized
40,000,000 shares; issued and outstanding;
December 31, 1997 4,203,423 shares;
June 30, 1997 4,203,423 shares 3,546,707 3,516,607
Additional paid-in capital 11,970 11,970
Accumulated deficit (3,476,833) (3,426,766)
----------- -----------
Total stockholders' equity 81,844 101,811
----------- -----------
$ 227,850 $ 205,220
=========== ===========
</TABLE>
See accompanying notes to unaudited
condensed financial statements
F-1
<PAGE> 11
SCIENTIFIC NRG, INCORPORATED
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 162,635 $ 148,594 $ 255,783 $ 235,262
Cost of sales 96,442 122,359 161,757 169,194
----------- ----------- ----------- -----------
Gross profit 66,193 26,235 94,026 66,068
Operating expenses:
Selling, general and
administrative expenses 74,189 84,742 142,640 198,504
Research and development 605 1,427 1,052 2,833
----------- ----------- ----------- -----------
Operating loss (8,601) (59,934) (49,666) (135,269)
Other income -- 41,390 -- 41,390
Interest expense -- (2,462) -- (17,695)
----------- ----------- ----------- -----------
Loss before income taxes (8,601) (21,006) (49,666) (111,574)
Income tax provision (200) (200) (400) (400)
----------- ----------- ----------- -----------
Net loss $ (8,801) $ (21,206) $ (50,066) $ (111,974)
=========== =========== =========== ===========
Weighted average number
of shares outstanding 4,203,423 2,995,224 4,203,423 2,659,115
=========== =========== =========== ===========
Net loss per common share $ (0.01) $ (0.01) $ (0.01) $ (0.04)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to unaudited
condensed financial statements
F-2
<PAGE> 12
SCIENTIFIC NRG, INCORPORATED
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended December 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional
------------------------- Paid-In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1997 4,203,423 $ 3,516,607 $ 11,970 $(3,426,766) $ 101,811
Common stock earned in connection
with legal services rendered -- 3,738 -- -- 3,738
Common stock earned by Parke
Industries, an affiliated company,
for services rendered under the
administrative services agreement -- 15,000 -- -- 15,000
Net loss -- -- -- (41,265) (41,265)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1997 4,203,423 3,535,345 11,970 (3,468,031) 79,284
Common stock earned in connection
with legal services rendered -- 1,362 -- -- 1,362
Common stock earned by Parke
Industries, an affiliated company,
for services rendered under the
administrative services
agreement -- 10,000 -- -- 10,000
Net loss -- -- -- (8,802) (8,802)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1997 4,203,423 $ 3,546,707 $ 11,970 $(3,476,833) $ 81,844
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to unaudited
condensed financial statements
F-3
<PAGE> 13
SCIENTIFIC NRG, INCORPORATED
CONDENSED STATEMENTS OF CASH FLOW
Six Months Ended December 31, 1997 and 1996
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Cash received from customers $ 216,941 $ 257,456
Cash paid to suppliers and employees (216,046) (347,663)
Interest paid -- (2,746)
Income taxes paid (1,600) --
--------- ---------
Net cash used in operating
activities (705) (92,953)
--------- ---------
CASH FLOW USED IN INVESTING ACTIVITIES
Purchase of equipment and
leasehold improvements -- (5,000)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Net decrease in line of credit -- (44,220)
Proceeds from advances and notes
from Company's officer and/or
director -- 70,000
Principal payments under capital
lease obligations -- (3,226)
Proceeds from issuance of common
stock -- 83,000
--------- ---------
Net cash provided by (used in)
financing activities -- 105,554
--------- ---------
Net increase (decrease) in cash (705) 7,601
CASH
Beginning of period 35,300 --
--------- ---------
Ending of period $ 34,595 $ 7,601
========= =========
</TABLE>
See accompanying notes to unaudited
condensed financial statements
F-4
<PAGE> 14
SCIENTIFIC NRG, INCORPORATED
CONDENSED STATEMENTS OF CASH FLOW (Continued)
Six Months Ended December 31, 1997 and 1996
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES
Net loss $ (50,066) $(111,974)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 1,374 2,938
Provision for doubtful accounts -- (4,110)
Loss on disposal of fixed assets -- 22,252
Compensation for services rendered,
previously prepaid with issuance of
common stock 30,100 20,000
Change in assets and liabilities:
Trade receivables (33,385) (20,146)
Inventories 9,376 37,438
Prepaid expenses and deposits (700) 7,173
Accounts payable, accrued
compensation and other accrued
expenses 42,596 (49,149)
Accrued interest payable -- 2,625
--------- ---------
Net cash used in operating activities $ (705) $ (92,953)
========= =========
</TABLE>
See accompanying notes to unaudited
condensed financial statements
F-5
<PAGE> 15
SCIENTIFIC NRG, INCORPORATED
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1997
NOTE 1. BASIS OF PRESENTATION
In the opinion of the Company's management, the accompanying unaudited condensed
financial statements include all adjustments (consisting of normal accruals)
necessary for the fair presentation of its financial position at December 31,
1997, results of operations for the three and six months ended December 31, 1997
and 1996 and cashflows for the six months ended December 31, 1997 and 1996.
Although the Company believes that the disclosures in these financial statements
are adequate to make the information presented not misleading, certain
information and disclosures normally included in the financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. These financial statements should be read in conjunction
with the Company's audited financial statements included in the Company's Annual
Report on Form10-KSB filed with the Securities and Exchange Commission on
October 15, 1997. Operating results for the three and six month periods ended
December 31, 1997 are not necessarily indicative of the results that may be
expected for the Company's entire year ending June 30, 1998. The Financial
Accounting Standards Board has issued Statement of Financial Accounting
Standards 128, "Earnings per Share" (SFAS 128), which is effective for financial
statements issued for periods ending after December 15, 1997. The effect of
adopting SFAS 128 has not yet been determined.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost or net realizable value. Cost is
determined under the standard cost method. Costs include materials, direct
labor, and an allocable portion of manufacturing overhead. The Company operates
in an industry in which its products are subject to design changes and are
manufactured based upon customer specifications. Accordingly, should design
requirements change significantly or customer orders be canceled, the ultimate
net realizable value of such products could be less than the carrying value of
such amounts. At December 31, 1997, management believes that inventories are
carried at their net realizable value.
F-6
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<C> <S>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR YEAR ENDED JUN-30-1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FORM 10-KSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 34,595
<SECURITIES> 0
<RECEIVABLES> 101,708
<ALLOWANCES> 9,658
<INVENTORY> 87,344
<CURRENT-ASSETS> 224,347
<PP&E> 18,274
<DEPRECIATION> 14,771
<TOTAL-ASSETS> 227,850
<CURRENT-LIABILITIES> 140,000
<BONDS> 0
0
0
<COMMON> 3,546,707
<OTHER-SE> 3,476,833
<TOTAL-LIABILITY-AND-EQUITY> 227,850
<SALES> 255,783
<TOTAL-REVENUES> 255,783
<CGS> 161,757
<TOTAL-COSTS> 305,449
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (49,669)
<INCOME-TAX> (400)
<INCOME-CONTINUING> (50,066)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,066)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
