SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange act of 1934
For the quarter ended September 30, 1999
Commission File Number 0-14910
MPM TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as specified in its Charter)
Washington 81-0436060
- -------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
222 W. Mission Ave.
Suite 30
Spokane, WA 99201
- -------------------------------- -----------------------------
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: 509-326-3443
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No___
As of November 8, 1999, the registrant had outstanding 2,627,961 shares of
common stock which is the registrant's only class of stock.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Financial Statements follow on the next page.
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
SEPTEMBER DECEMBER
30, 1999 31, 1998
(UNAUDITED)
<S> <C> <C>
--------------- --------------
Current assets:
Cash and cash equilavents $677,660 $2,634,570
Accounts receivable, net of allowance for doubtful accounts
of $90,000 2,182,748 1,630,630
Inventories 351,693 496,964
Costs and estimated earnings in excess of billings 4,108,412 1,571,833
Other current assets 184,165 66,999
--------------- --------------
Total current assets 7,504,678 6,400,996
--------------- --------------
Property, plant and equipment, net 301,327 320,026
Mineral properties held for sale 1,086,346 1,086,346
Goodwill, net of accumulated amortization of $95,066 and $38,027 665,466 722,505
Note receivable 275,000 275,000
Purchased intangible, net of accumulated amortization of $185,625
and $135,000 489,375 540,000
Other assets, net 144,250 123,420
--------------- --------------
$10,466,442 $9,468,293
--------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,162,875 $821,600
Accrued expenses 198,648 386,869
Billings in excess of costs and estimated earnings 1,090,514 3,819,204
Accrued expenses - related party 63,116 63,116
Notes payable - 5,461
Related party debt 220,461 270,000
Current portion of long-term debt 43,034 43,034
Preferred stock deposit - 760,035
--------------- --------------
Total current liabilities 5,778,648 6,169,319
--------------- --------------
Long-term debt, less current portion 961,518 561,518
Negative goodwill, net of accumulated amortization of $236,222
and $165,356 708,667 779,533
--------------- --------------
Total liabilities 7,448,833 7,510,370
--------------- --------------
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value, 100,000,000 shares authorized,
2,627,961 and 2,146,128 shares issued and outstanding 2,628 2,146
Additional paid-in capital 9,817,263 8,844,883
Accumulated deficit (6,802,282) (6,889,106)
--------------- --------------
Total stockholders' equity 3,017,609 1,957,923
--------------- --------------
$10,466,442 $9,468,293
--------------- --------------
</TABLE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
(Restated) (Restated)
<S> <C> <C> <C> <C>
------------- ------------- ------------- ------------
Revenues $6,567,154 $3,691,118 $17,291,243 $7,079,491
Cost of sales 5,470,765 2,732,231 13,931,379 5,382,934
------------- ------------- ------------- ------------
Gross margin 1,096,389 958,887 3,359,864 1,696,557
Selling, general and administrative expenses 1,049,579 898,227 2,948,251 1,871,321
------------- ------------- ------------- ------------
Income (loss) from operations 46,810 60,660 411,613 (174,764)
------------- ------------- ------------- ------------
Other income (expense):
Interest expense (27,912) (29,200) (377,709) (89,893)
Other income, net 8,834 4,390 52,921 33,755
------------- ------------- ------------- ------------
Net other income (expense) (19,078) (24,810) (324,788) (56,138)
------------- ------------- ------------- ------------
Income (loss) from continuing operations 27,732 35,850 86,825 (230,902)
Discontinued operations:
Loss from discontinued mining operations - (7,665) - (22,123)
------------- ------------- ------------- ------------
Net income (loss) $27,732 $28,185 $86,825 ($253,025)
------------- ------------- ------------- ------------
Basic earnings per share:
Income (loss) from continuing operations $0.01 $0.02 $0.04 ($0.12)
(Loss) from discontinued operations - - - ($0.01)
------------- ------------- ------------- ------------
Net income (loss) $0.01 $0.02 $0.04 ($0.13)
------------- ------------- ------------- ------------
Diluted earnings per share:
Income (loss) from continuing operations $0.01 $0.02 $0.03 ($0.12)
(Loss) from discontinued operations - - - ($0.01)
------------- ------------- ------------- ------------
Net income (loss) $0.01 $0.02 $0.03 ($0.13)
------------- ------------- ------------- ------------
Weighted average shares of common stock
outstanding - basic 2,627,961 1,964,185 2,438,953 1,878,641
------------- ------------- ------------- ------------
Weighted average shares of common stock
outstanding - diluted 3,606,575 2,065,185 3,417,567 1,979,641
------------- ------------- ------------- ------------
</TABLE>
<TABLE>
<CAPTION>
MPM TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1999 1998
(Restated)
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $86,825 ($253,025)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization 95,705 25,339
Interest imputed on related party debt 14,071 20,390
Interest imputed on issue of stock 266,666 -
Change in assets and liabilities:
Accounts receivable (552,118) (1,678,011)
Costs and estimated earnings in excess of billings (2,536,579) (474,869)
Inventories 145,271 112,199
Other assets (137,996) (103,933)
Accounts payable and accrued expenses 2,393,019 828,519
Billings in excess of costs and estimated earnings (2,728,690) 424,311
------------- -------------
Net cash used in operating activities (2,953,826) (1,099,080)
------------- -------------
Cash flows from investing activities:
Acquisition of property, plant and equipment (40,209) (201,122)
Cash paid for business acquisition - (234,610)
------------- -------------
Net cash used in investing activities (40,209) (435,732)
------------- -------------
Cash flows from financing activities:
Repayment of related party debt (49,539) -
Repayment of notes payable (5,461) (220,608)
Repurchase and retirement of common stock (7,875) (24,608)
Proceeds from preferred stock deposit - 375,000
Proceeds from stock issue 700,000 -
Proceeds from related party debt 400,000 10,000
------------- -------------
Net cash provided by financing activities 1,037,125 139,784
------------- -------------
Net decrease increase in cash and cash equivalents (1,956,910) (1,395,028)
Cash and cash equivalents, beginning of period 2,634,570 2,010,596
------------- -------------
Cash and cash equivalents, end of period $677,660 $615,568
------------- -------------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $4,036 $ 74,697
Income taxes $ - $ -
Non-cash investing and financing activities:
Issue of shares of common stock for acquisition
of subsidiary $ - $ 300,000
Issue of shares under an agreement with an unrelated entity $ - $ 50,000
Related party debt converted to and property exchanged
for shares of common stock $ - $ 377,665
Business acquisition:
Fair value of assets acquired $ - $ 337,577
Purchase price in excess of net assets acquired - 760,532
Liabilities assumed - (563,499)
Common stock issued - (300,000)
------------- -------------
Cash paid for acquisition $ - $ 234,610
------------- -------------
</TABLE>
MPM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
1. Unaudited Financial Statements
These financial statements should be read in conjunction with the audited
financial statements included in the Annual Report on Form 10-KSB for the year
ended December 31, 1998. Since certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting standards have been omitted pursuant to the instructions to
Form 10-QSB of Regulation S-X as promulgated by the Securities and Exchange
Commission, these financial statements specifically incorporate by reference
the footnotes to the consolidated financial statements of the Company as of
December 31, 1998. In the opinion of management, these unaudited interim
financial statements reflect all adjustments necessary for a fair presentation
of the financial position and results of operations and cash flows of the
Company. Such adjustments consisted only of those of a normal recurring
nature. Results of operations for the period ended September 30, 1999 should
not necessarily be taken as indicative of the results of operations that may be
expected for the entire year 1999.
2. Earnings Per Share
Earnings per share ("EPS") is computed by dividing net income (loss) by the
weighted average number of common shares outstanding in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
The following table reconciles the number of common shares used in the basic
and diluted EPS calculations:
For the Nine Months Ended September 30, 1999
Weighted-
Net Average Per-Share
Income Shares Amount
---------- ----------- ------------
Basic EPS
Income available to common
stockholders $ 86,825 2,438,953 $ 0.04
Effect of Dilutive Securities
Common stock options - 978,614 (0.01)
---------- ----------- ------------
Diluted EPS
Income available to common
stockholders - assumed
conversions $ 86,825 3,417,567 $ 0.03
---------- ----------- ------------
For the Three Months Ended September 30, 1999
Weighted-
Net Average Per-Share
Income Shares Amount
----------- ------------- -------------
Basic EPS
Income available to common
stockholders $ 27,732 2,627,961 $ 0.01
Effect of Dilutive Securities
Common stock options - 978,614 -
----------- ------------- -------------
Diluted EPS
Income available to common
stockholders - assumed
conversions $ 27,732 3,606,575 $ 0.01
----------- ------------- -------------
At September 30, 1998, outstanding options to purchase 101,000 shares of the
Company's common stock were not included in the computation of diluted EPS as
their effect would have been antidilutive. Accordingly, basic and diluted EPS
are the same for the three and nine months ended September 30, 1998.
3. Segment Information
The Company's consolidated financial statements include certain reportable
segment information. These segments include Huntington Environmental Systems,
Inc., a wholly owned subsidiary engaged in designing, engineering, supplying
and servicing air pollution control systems which primarily utilize heat and
chemicals to control air pollution, and AirPol, Inc., a wholly owned subsidiary
engaged in designing, engineering, supplying and servicing air pollution
control systems which utilize wet and dry scrubbers, wet electrostatic
precipitators and venturi absorbers to control air pollution. The Company
evaluates the performance of these segments based upon multiple variables
including revenues and profit or loss.
The segments' profit and loss components and schedule of assets as of September
30, 1999 are as follows:
Air Air
Pollution Pollution
Control Control All
(Heat) (Scrubbers) Others Total
Revenue external $ 7,157,272 $10,133,971 $ - $17,291,243
Revenue internal - - 88,000 88,000
Segment profit (loss) 277,231 480,987 (671,393) 86,825
Segment assets 4,085,415 4,998,893 4,829,241 13,913,549
Reconciliation of segment revenues, net income, and other significant items for
the three and nine months ended September 30, 1999 and 1998 are as follows:
Nine months Three months
ended ended
Revenues September 30, September 30,
1999 1999
--------------- ---------------
Total revenues for reportable segments $ 17,291,243 $ 6,567,154
Other revenues 88,000 22,000
Elimination of intersegment revenues (88,000) (22,000)
--------------- ---------------
Total consolidated revenues $ 17,291,243 $ 6,567,154
--------------- ---------------
Profit or loss
Total profit (loss) for reportable segments $ 758,218 $ 236,286
Other profit or loss (671,393) (208,554)
--------------- ---------------
Total consolidated profit or loss $ 86,825 $ 27,732
--------------- ---------------
Nine months Three months
ended ended
Revenues September 30, September 30,
1998 1998
--------------- ---------------
Total revenues for reportable segments $ 7,079,491 $ 3,691,118
Other revenues 81,000 33,000
Elimination of intersegment revenues (81,000) (33,000)
--------------- ---------------
Total consolidated revenues $ 7,079,491 $ 3,691,118
--------------- ---------------
Profit or loss
Total profit (loss) for reportable segments $ (45,341) $ 54,047
Other profit or loss (207,684) ( 25,862)
--------------- ---------------
Total consolidated profit or loss $ 253,025) $ 28,185
--------------- ---------------
Reconciliation of segment total assets and other significant items at September
30, 1999 are as follows:
Assets
Total assets for reportable segments $ 9,084,308
Other assets 4,829,241
Assets of discontinued operation -
Elimination of intersegment assets (3,447,107)
---------------
Total consolidated assets $ 10,466,442
---------------
4. Financing
In December 1998, MPM filed a registration statement with the Securities and
Exchange Commission, and received funds pending the completion of the
registration statement. Pursuant to an agreement in April 1999, an MPM
director invested $1,100,000 in cash which was used to repay the funds received
and many of the related expenses. MPM then formally withdrew its registration
statement. Under the terms of the agreement, MPM issued 150,000 shares of its
common stock at the market price in exchange for $300,000, and issued
convertible debentures aggregating $400,000 which could be converted to MPM
common stock at a discount. The debentures were converted concurrently with
the stock issue resulting in issuing an additional 333,333 shares of common
stock. The amount of the discount is treated as a current period expense with
the offset being credited to additional paid-in capital. The effect on MPM's
results for the three and nine months ended September 30, 1999 was to decrease
net income by approximately $267,000. The $400,000 balance of the $1,100,000
was a note payable with interest only payments at 8% per annum through March
2004 with the balance due April 2004.
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
MPM Technologies, Inc. ("MPM") acquired certain of the assets and assumed
certain of the liabilities of a part of a division of FLS miljo, Inc. as of
July 1, 1998. MPM formed AirPol, Inc. ("AirPol") to run this air pollution
control business. AirPol designs, engineers, supplies and services air
pollution control systems for Fortune 500 and other industrial and
environmental companies. The technologies of AirPol utilize wet and dry
scrubbers, wet electrostatic precipitators and venturi absorbers to control air
pollution. AirPol brought over 30 years experience to MPM through its
technologies and employees.
As of April 1, 1997, MPM acquired certain of the assets and assumed certain of
the liabilities of a portion of a division of United States Filter Corporation,
and formed Huntington Environmental Systems, Inc. ("HES") to operate this air
pollution control business. HES designs, engineers, supplies and services high
temperature and chemical air pollution control systems for Fortune 500 and
other industrial and environmental companies. HES brought has over 25 years of
experience and over 300 installations across the globe to MPM through its
technologies and employees.
Both HES's and AirPol's engineering staffs are uniquely prepared to address the
full scope of customers' process problems. Their policies of handling clients'
individual concerns include in-depth analysis and evaluation, followed by
complete engineering and design services leading to application-specific
engineered solutions.
MPM holds a 58.21% interest in Nupower Partnership through its wholly-owned
subsidiary, Nupower, Inc. Nupower Partnership is engaged in the development and
commercialization of a waste-to-energy process which has been named "Skygas".
Skygas is an innovative technology for the disposal and gasification of
carbonaceous wastes such as municipal solid waste, municipal sewage sludge,
pulp and paper mill sludge, auto fluff, medical waste and used tires. The
process converts solid and semi-solid wastes into a clean-burning medium BTU
gas that can be used for steam production for electric power generation. The
gas may also be a useful building block for downstream conversion into valuable
chemicals.
MPM controls 32 claims on approximately 1,000 acres in the historical Emery
Mining District in Montana through its wholly-owned subsidiary, MPM Mining,
Inc. In accordance with the Board of Directors' mandates, MPM's management is
actively seeking out mining and other businesses to purchase its mining
properties and equipment.
HES and AirPol are active continuing concerns. The development of the Skygas
process through Nupower Partnership is also ongoing. No other operations were
conducted. Accordingly, the financial statements for the nine months ended
September 30, 1999 include the operations of HES, AirPol, Skygas and MPM, and
for the nine months ended September 30, 1998, include HES, Skygas and MPM, and
AirPol for three months since it was acquired July 1, 1998.
MPM's consolidated net income for the nine months ended September 30, 1999 was
$86,825, or $0.04 per share compared to a loss of $253,025, or $0.13 per share
for the nine months ended September 30, 1998. This was due to the performance
of AirPol for the first nine months of 1999, and improved results for HES for
the same period. MPM's results for the nine months ended September 30, 1999
included one-time charges related to its aborted preferred stock offering and
registration filing, and subsequent funding by a director of the Company.
These charges aggregated to approximately $360,000. Without these charges,
MPM's basic earnings per share for the nine months ended September 30, 1999
would have been approximately $0.19. Management expects that MPM's performance
will continue to improve during upcoming quarters. This is based on its
backlog of work at September 30, 1999 of approximately $7,540,000, more
concentrated sales efforts in the fourth and subsequent quarters from
additional salesmen along with specific cost cuts where warranted.
MPM had previously announced that it had agreed in principal with a consortium
in Europe to furnish four to five Skygas units initially, with an additional 11
to 12 units to follow by 2003. The first of these units was to begin
construction late in the third quarter of 1999 with an anticipated completion
date in mid 2000. Negotiations are actively continuing, but an agreement has
not been finalized to date. This will delay construction of the first unit
until late in the fourth quarter or early in the first quarter 2000.
Management expects revenues from these units will begin to enhance MPM's
financial results in the first quarter 2000. Total funding to be provided by
the consortium for these units is approximately $125,000,000.
Nine and three months ended 9/30/99 compared to nine and three months ended
9/30/98
For the nine months ended 9/30/99, MPM had net income of $86,825, or $0.04 per
share compared to a net loss of $253,025, or $0.13 per share for the nine
months ended 9/30/98. Revenues increased 144.2% to $17,291,491 for the nine
months ended 9/30/99 compared to $7,079,491 for the nine months ended 9/30/98.
This was primarily due to the addition of nine months of AirPol's operations
in 1999 compared to only three months of AirPol's operations in 1998, and
improvements in revenues at HES. Costs of sales increased 158.8% to
$13,931,379 for the nine months ended September 30, 1999 compared to $5,382,934
for the nine months ended September 30, 1998. This was due to the
aforementioned inclusion of AirPol's operations for nine months in 1999
compared to three months in 1998. Operating expenses were up 57.5% to
$2,948,251 for the nine months ended September 30, 1999 compared to $1,871,321
for the nine months ended 9/30/98. This was also due to the inclusion of the
AirPol results for nine months in 1999 and three months in 1998. Working
capital at 9/30/99 was $1,726,030 compared to $171,597 at 9/30/98.
For the three months ended 9/30/99, MPM had net income of $27,732, or $0.01
per share compared to a net income of $28,185, or $0.02 per share for the three
months ended 930/98. Revenues increased 77.9% to $6,567,154 for the three
months ended 9/30/99 compared to $3,691,118 for the three months ended 9/30/98.
This was due improved revenues at both HES and AirPol for the quarter ended
September 30, 1999 compared to 1998. Costs of sales increased 100.2% to
$5,470,765 for the three months ended September 30, 1999 compared to $2,732,231
for the three months ended September 30, 1998. This was due to the increased
revenues at both HES and AirPol along with somewhat smaller profit margins due
to the competitive market conditions. Operating expenses were up 16.9% to
$1,049,579 for the three months ended September 30, 1999 compared to $898,227
for the three months ended 9/30/98. This was primarily due to costs related to
moving the corporate headquarters of AirPol during the 1999 quarter.
Financial Condition and Liquidity
For the nine months ended September 30, 1999, funds for operations were
provided by cash reserves previously generated from the continuing operations
of HES and AirPol. In December 1998, MPM filed a registration statement with
the Securities and Exchange Commission, and received funds pending the
completion of the registration statement. Pursuant to an agreement in April, a
director invested $1,100,000 in cash which was used to repay the funds received
in anticipation of the registration and many of the related expenses. MPM then
formally withdrew its registration statement. Under the terms of the agreement
with the director, MPM issued 150,000 shares of its common stock at the market
price for $300,000, and convertible debentures for the issue of additional
shares of common stock at a discount for $400,000. The debentures were
converted concurrently with the issue of the original shares, and resulted in
an additional 333,333 shares of common stock being issued. The amount of the
discount is treated as a current period expense with the offset being credited
to additional paid in capital. The effect on MPM's results for the nine months
ended September 30, 1999 was to decrease net income by approximately $267,000.
The balance of $400,000 was in the form of an 8% note payable to the director
with interest only payments due monthly through March 2004, and the principal
balance due in April 2004.
Current cash reserves and continuing operations are believed to be adequate to
fund MPM's and its subsidiaries' operations for the foreseeable future. MPM is
considering alternative sources of capital such as private placements, stock
offerings and loans from shareholders and officers to fund its current business
and expand in other related areas through acquisitions.
Impact of Year 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of MPM's computer
programs or hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than 2000. This could
result in a system failure or miscalculations causing disruptions of
operations.
Based on recent and continuing assessments, MPM management has determined that
its basic computer systems are year 2000 compliant, and will properly utilize
dates beyond December 31, 1999. MPM also identified other areas where minor
modifications were required for some of its less critical software to make it
year 2000 compliant, and has completed the steps to make these areas year 2000
compliant. Accordingly, management believes that the Year 2000 Issue will not
have a material impact on its operations.
MPM has also made inquiries of its major suppliers to determine their systems'
compliance with the Year 2000 Issue. Management has determined based on
responses received to date that the majority of its suppliers are in compliance
with the Issue. Accordingly, the effect of a third party's non-compliance is
not expected to have a material impact on the financial condition of MPM.
During the nine months ended September 30, 1999, MPM's expenditures on issues
related to its compliance with the Year 2000 Issue were approximately $4,000.
MPM expects to spend approximately $1,000 in the balance of 1999 to ensure that
its systems are in compliance with the Year 2000 Issue.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company knows of no litigation present, threatened or contemplated or
unsatisfied judgment against the Company, its officers or directors or any
proceedings in which the Company, its officers or directors are a party.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The rights of the holders of the Company's securities have not been modified
nor have the rights evidenced by the securities been limited or qualified by
the issuance or modification of any other class of securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There are no senior securities issued by the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters presented to the shareholders for vote during the third
quarter of 1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MPM Technologies, Inc.
November 12, 1999 /s/ Robert D. Little
--------------------------- ------------------------------
(date) Robert D. Little
Corporate Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 677660
<SECURITIES> 0
<RECEIVABLES> 2272748
<ALLOWANCES> 90000
<INVENTORY> 351693
<CURRENT-ASSETS> 7504678
<PP&E> 396491
<DEPRECIATION> 95164
<TOTAL-ASSETS> 10466442
<CURRENT-LIABILITIES> 5778648
<BONDS> 0
0
0
<COMMON> 2628
<OTHER-SE> 3014981
<TOTAL-LIABILITY-AND-EQUITY> 10466442
<SALES> 17291243
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<CGS> 13931379
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 377709
<INCOME-PRETAX> 86825
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<CHANGES> 0
<NET-INCOME> 86825
<EPS-BASIC> .04
<EPS-DILUTED> .03
</TABLE>
