================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 28, 1997
COMMISSION FILE NUMBER 0-15885
NATIONAL DATACOMPUTER, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 04-2942832
(State or other jurisdiction of (IRS Employer Identification #)
incorporation or organization)
900 MIDDLESEX TURNPIKE, BLDG. 5
BILLERICA, MA. 01821
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (508)663-7677
-------------------------------------------
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Securities and Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the past
ninety (90) days.
Yes___X_____ No_________
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of September 28, 1997.
COMMON STOCK, $0.08 PAR VALUE 1,417,289
(Title of each class) (number of shares)
NATIONAL DATACOMPUTER, INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
Item 1. Financial Statements:
<S> <C>
Balance Sheet as of
September 28, 1997 and December 29, 1996...................................3
Statement of Operations
Three and nine months ended
September 28, 1997 and September 30, 1996..........................4
Statement of Changes in
Stockholders' Equity for the nine
months ended September 28, 1997..........................................5
Statement of Cash Flows
for the nine months ended
September 28, 1997 and September 30, 1996.........................6
Notes to Financial Statements...............................................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS..................................................9
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings..........................................................11
ITEM 2. Changes in Securities......................................................11
ITEM 3. Defaults upon Senior Securities............................................11
ITEM 4. Submissions of Matters to a Vote of Security Holders.......................11
ITEM 5. Other Information..........................................................11
ITEM 6. Exhibits and Reports on Form 8-K...........................................11
SIGNATURES..........................................................................12
</TABLE>
NATIONAL DATACOMPUTER, INC.
BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 28, December 29,
1997 1996
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 89,623 $ 722,285
Accounts receivable, net of allowance for doubtful accounts 1,448,318 621,037
Inventories 1,530,361 1,479,153
Other current assets 75,589 153,741
---------------- ----------------
Total current assets 3,143,891 2,976,216
Property and equipment, net 297,534 234,530
---------------- ----------------
$ 3,441,425 $ 3,210,746
================ ================
Liabilities and stockholders' equity
Current Liabilities:
Current obligations under capital lease $ 39,600 $ 21,424
Accounts payable 320,491 125,454
Accrued payroll and related taxes 135,871 171,104
Accrued professional fees 32,525 48,732
Accrued rent and utilities 29,188 54,429
Accrued expenses - other 178,437 274,423
Accrued interest on preferred stock 106,500 84,000
Deferred revenues, current portion 430,295 678,625
Deferred compensation 45,742 45,742
---------------- ----------------
Total current liabilities 1,318,649 1,503,933
Convertible debt 250,000 -
Obligation under capital lease 81,269 114,828
Deferred revenues 75,143 75,143
---------------- ----------------
1,725,061 1,693,904
---------------- ----------------
Stockholders' equity
Preferred stock, Series B convertible $0.001 par value; 4,200 shares
authorized; 4,200 shares issued and outstanding at September 28, 1997
and December 29, 1996, respectively (liquidating preference of $4,200,000) 3,685,206 3,685,206
Preferred stock, Series C convertible $0.001 par value; 900 shares
authorized; 900 and 0 shares issued and outstanding at September 28, 1997,
and December 29, 1996, respectively (liquidating preference of $900,000) 881,583 -
Preferred stock, Series D convertible $0.001 par value; 350 shares
authorized; 350 and 0 shares issued and outstanding at September 28, 1997,
and December 29, 1996, respectively (liquidating preference of $350,000) 343,000 -
Common stock, $0.08 par value; 5,000,000 shares authorized; 1,417,289 and 1,251,925
shares issued and outstanding at September 28, 1997 and December 29, 1996, respectively 113,382 100,154
Capital in excess of par value 10,032,229 9,755,957
Accumulated deficit (12,886,594) (11,548,437)
Unamortized stock compensation (101,173) (124,769)
Notes receivable - employees (351,269) (351,269)
---------------- ----------------
Total stockholders' equity 1,716,364 1,516,842
---------------- ----------------
$ 3,441,425 $ 3,210,746
================ ================
</TABLE>
The accompanying notes are an integral part
of these financial statements
3
NATIONAL DATACOMPUTER, INC.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Third Fiscal Quarter Nine Months
Ended Ended
-------------------------------------- -------------------------------------
September 28, September 30, September 28, September 30,
1997 1996 1997 1996
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Net product revenue $ 1,249,933 $ 870,124 $ 3,368,967 $ 3,325,301
Service and other revenue 273,931 266,804 880,128 775,769
------------------ ------------------ ------------------ ------------------
1,523,864 1,136,928 4,249,095 4,101,070
Cost of sales and services 885,708 733,582 2,427,500 2,517,434
------------------ ------------------ ------------------ ------------------
638,156 403,346 1,821,595 1,583,636
------------------ ------------------ ------------------ ------------------
Operating expenses:
Research and development 307,949 363,868 1,046,636 926,599
Selling, general and administrative 523,106 723,029 1,801,668 1,907,576
------------------ ------------------ ------------------ ---------------
831,055 1,086,897 2,848,304 2,834,175
------------------ ------------------ ------------------ ------------------
Loss from operations (192,899) (683,551) (1,026,709) (1,250,539)
Other income (expense):
Interest income 6,619 17,009 13,252 22,783
Interest expense (2,661) (2,538) (12,700) (20,651)
------------------ ------------------ ------------------ ------------------
Net loss $ (188,941) $ (669,080) $ (1,026,157) $ (1,248,407)
================== ================== ================== ==================
Net loss per share $ (0.23) $ (0.61) $ (1.05) $ (1.15)
================== ================== ================== ==================
Weighted average shares and dilutive
share equivalents outstanding 1,309,246 1,230,153 1,277,926 1,196,650
================== ================== ================== ==================
</TABLE>
The accompanying notes are an integral part
of these financial statements
4
<TABLE>
<CAPTION>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
Preferred Stock Preferred Stock Preferred Stock Common Stock
Series B Series C Series D
------------------------ -------------------- -------------------- -----------------------------------
Capital in
Net Issuance Net Issuance Net Issuance Par Excess
Shares Price Shares Price Shares Price Shares Value of par value)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 29, 1996 4,200 $ 3,685,206 1,251,925 $100,154 $9,755,957
Net loss
Issuance of preferred stock 900 881,583 350 343,000
Interest on preferred stock
Amortization of stock compensation
-------- ------------ -------- ---------- --------- ---------- ----------- ---------- -------------
Balance at March 30, 1997 4,200 $ 3,685,206 900 $ 881,583 350 $ 343,000 1,251,925 $100,154 $ 9,755,957
======== ============ ======== ========== ========= ========== =========== ========== =============
Net loss
Issuance of common stock
in satisfaction of accrued interest 26,886 2,150 81,850
Interest on preferred stock
Amortization of stock compensation
-------- ------------ -------- ---------- --------- ---------- ----------- ---------- -------------
Balance at June 29, 1997 4,200 $ 3,685,206 900 $ 881,583 350 $ 343,000 1,278,811 $102,304 $ 9,837,807
======== ============ ======== ========== ========= ========== =========== ========== =============
Net loss
Issuance of common stock
in satisfaction of accrued interest 138,286 11,063 194,437
Interest on preferred stock
Adj for fractional shares 192 15 (15)
Amortization of stock compensation
-------- ------------ -------- ---------- --------- ---------- ----------- ---------- -------------
Balance at September 28, 1997 4,200 $ 3,685,206 900 $ 881,583 350 $ 343,000 1,417,289 $113,382 $ 10,032,229
======== ============ ======== ========== ========= ========== =========== ========== =============
</TABLE>
<TABLE>
<CAPTION>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
Notes Unamortized Total
receivable Stock Accumulated stockholders'
employees Compensation deficit equity
<S> <C> <C> <C> <C>
Balance at December 29, 1996 $ (351,269) $ (124,769) ($11,548,437) $1,516,842
Net loss (298,328) ($298,328)
Issuance of preferred stock $1,224,583
Interest on preferred stock (99,000) ($99,000)
Amortization of stock compensation 7,799 $7,799
----------- ------------ ------------- ------------
Balance at March 30, 1997 $ (351,269) $ (116,970) $(11,945,765) $ 2,351,896
=========== ============ ============= ============
Net loss (538,888) ($538,888)
Issuance of common stock
in satisfaction of accrued interest $84,000
Interest on preferred stock (106,500) ($106,500)
Amortization of stock compensation 7,797 $7,797
----------- ------------ ------------- ------------
Balance at June 29, 1997 $ (351,269) $ (109,173) $(12,591,153) $ 1,798,305
=========== ============ ============= ============
Net loss (188,941) ($188,941)
Issuance of common stock
in satisfaction of accrued interest $205,500
Interest on preferred stock (106,500) ($106,500)
Adj for fractional shares $0
Amortization of stock compensation 8,000 $8,000
----------- ------------ ------------- ------------
Balance at September 28, 1997 $ (351,269) $ (101,173) $(12,886,594) $ 1,716,364
=========== ============ ============= ============
</TABLE>
The accompanying notes are an integral part
of these financial statements
<TABLE>
<CAPTION>
NATIONAL DATACOMPUTER, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
- ---------------------------------------------------------------------------------------------------------------------------
For the Nine Months Ended
September 28, 1997 September 30, 1996
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,026,157) $ (1,248,407)
Adjustments to reconcile net loss to net
cash (used for) provided by operating activities:
Depreciation and amortization 90,540 41,631
Amortization of stock compensation 23,596 -
Gain on sale of property and equipment (1,780)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (827,281) 227,641
Increase in inventories (51,208) (97,533)
(Increase) decrease in other current assets 78,152 (25,104)
(Decrease) increase in accounts payable 195,037 (124,088)
(Decrease) increase in debt (7,784)
Decrease accrued expenses
and deferred compensation (172,667) (522,799)
Decrease in deferred revenues (248,330) (38,814)
------------------ -----------------
Net cash used for operating activities (1,938,318) (1,797,037)
------------------ -----------------
Cash flows from investing activities:
Purchases of property and equipment (139,359) (17,741)
Proceeds from sale of property and equipment - 5,650
------------------ -----------------
Net cash used for investing activities (139,359) (12,091)
------------------ -----------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock, net of issuance costs 1,224,583 3,685,206
Repayment of borrowings - (440,278)
Proceeds from issuance of convertible note 250,000 -
Collection of Receivable from stockholder - 50,268
Payments of obligations under capital lease (29,568) -
Proceeds from issuance of common stock,
net of issuance costs 43,617
------------------ -----------------
Net cash provided by financing activities 1,445,015 3,338,813
------------------ -----------------
Net increase (decrease) in cash and cash equivalents (632,662) 1,529,685
Cash and cash equivalents at beginning of period 722,285 470
------------------ -----------------
Cash and cash equivalents at end of period $ 89,623 $ 1,530,155
================== =================
Supplemental Cash Flow Information:
Cash paid for interest $ 12,700 $ 28,350
Non-cash investing and financing activities:
Accrued Interest on preferred stock charged to
Accumulated deficit 312,000 84,000
Purchase of property and equipment under capital lease 14,185 -
Common stock issued in satisfaction of interest on
preferred stock 289,500 -
</TABLE>
The accompanying notes are an integral part
of these financial statements
6
NATIONAL DATACOMPUTER, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
National Datacomputer, Inc. (the "Company") designs, develops,
manufactures, markets, and services a line of hand-held battery powered
microprocessor-based data collection products and computers and associated
peripherals for use in mobile operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited financial statements, which are for interim
periods, do not include all disclosures provided in the annual financial
statements. These unaudited financial statements should be read in
conjunction with the financial statements and the footnotes thereto
contained in the Annual Report on Form 10-KSB for the year ended December
29, 1996 of National Datacomputer, Inc. (the "Company"), as filed with the
Securities and Exchange Commission.
INTERIM PERIODS
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the three and nine months ended September 28,
1997 are not necessarily indicative of the results to be expected for the
full year.
REVENUE RECOGNITION
The Company recognizes revenues for products upon shipment. Estimated
installation, training and warranty costs are accrued at the time of
shipment. Service revenue is recognized ratably over the contractual
periods.
EARNINGS PER SHARE
Per share data was computed by dividing net loss as adjusted by interest
on the preferred stock by the weighted average number of common shares
outstanding during the period; common equivalent shares are not included
as the effect of such would be considered anti-dilutive.
RESEARCH AND DEVELOPMENT AND COMPUTER SOFTWARE DEVELOPMENT COSTS
Statement of Financial Accounting Standards No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise Marketed",
requires the capitalization of certain computer software development costs
incurred after technological feasibility is established. No software
development costs have been capitalized at September 28, 1997 or December
29, 1996.
NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, ("SFAS 128"),
"Earnings per Share", effective for fiscal years ending after December 15,
1997, with retroactive restatement of prior periods presented upon
adoption. Management has determined that there will be no impact of the
adoption of SFAS 128 on the Company's reported results of operations for
the periods presented. The future adoption of SFAS 128 will have no effect
on the Company's financial position or cash flows.
In October 1997, the Accounting Standards Executive Committee issued
Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2").
SOP 97-2 provides guidance on the timing and amounts of revenue
recognition for licensing, selling, leasing, or otherwise marketing
computer software, including software incorporated into other products.
This SOP supersedes SOP 91-1 (also entitled "Software Revenue
Recognition") and is effective for transactions entered into in fiscal
years beginning after December 15, 1997. The Company is currently
reviewing SOP 97-2 to determine the impact, if any, of adopting SOP 97-2
on the Company's financial position and results of operations.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with the
current year presentation.
3. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following: SEPTEMBER 28, DECEMBER 29,
1997 1996
----------------------- ----------------------
<S> <C> <C>
Raw Material $ 364,041 $ 351,860
Work-in-process 613,262 592,741
Finished goods 553,058 534,552
----------------------- ----------------------
Total $1,530,361 $ 1,479,153
======================= ======================
</TABLE>
Inventories are stated at the lower of cost (first-in, first-out) or
market
4. CONVERTIBLE PREFERRED STOCK AND PROMISSORY NOTES
In March 1997, the Company designated and sold 900 and 350 shares of
Series C and Series D Convertible Preferred Stock, respectively, for net
proceeds of $881,583 and $343,000, respectively. The Series C and Series D
Convertible Preferred Stock have voting, dividend preference, liquidating
preference, mandatory conversion and Company redemption terms similar to
those of the Company's existing Series B Convertible Preferred Stock. The
Series C and Series D Convertible Preferred Stock are convertible into
shares of common stock at a price of $3.20 and $2.74 per share,
respectively. Holders of the Series C and Series D Convertible Preferred
Stock are also entitled to receive interest at a rate of 6% per annum on
the stated value of the preferred stock.
At the same time, the Company also issued $250,000 of Convertible
Promissory Notes to the same investors as the Series C and Series D
Convertible Preferred Stockholders. These notes bear interest at the rate
of 6% annum, mature in March 1998 and are convertible into shares of the
Company's common stock at a price of $2.74 per share.
5. SUBSEQUENT EVENT
On November 7, 1997, the Company signed a Sales and Marketing Agreement
with Infos, a European company. The agreement provides that the Company
will sell Infos products in North America (Canada, Mexico and the USA) and
Infos will sell the Company's products in Europe.
This agreement will provide the Company the availability of a broad range
of hand-held computer products and an outlet to expand into other markets
and applications.
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 financial statements and notes thereto appearing elsewhere herein.
RESULTS OF OPERATIONS
THIRD QUARTER ENDED SEPTEMBER 28, 1997 COMPARED WITH THIRD QUARTER
ENDED SEPTEMBER 30, 1996.
Revenues increased 34% to $1,523,864 in the Third Quarter 1997 from
$1,136,928 in the Third Quarter 1996. The increase in revenues was mainly due to
a higher sales volume of the Company's Datacomputers which experienced a growth
of approximately 44%, mainly attributable to two major contracts.
Service and other revenues for the current quarter were $273,931
compared to $266,804 for the previous comparable quarter, an increase of 3%. The
Company expects that service and other revenues will continue to rise as the
Company's installed base of hand-held computers continues to expand.
Cost of sales and services, as a percentage of net revenues, decreased
to 58% during the current quarter from 65% during the prior comparable period,
primarily as a result of spreading certain fixed manufacturing costs over a
higher sales volume, combined with the decline of the Company's field support
cost due to the Company's quality programs instituted in the last year.
Research and development expenses during the Third Quarter 1997 were
$307,949 a decrease of approximately 15% compared to $363,868 during the prior
comparable quarter. The Company has made great stride in improving its products,
and therefore lowering the level of third-party development costs in many areas.
Selling, general and administrative expenses during the Third Quarter
1997 were $523,106 a decrease of approximately 28% compared to $723,029 during
the prior comparable period. The significantly lower level of cost, resulted
from the Company's ongoing evaluation of its operations and organizational
structure.
As a result, the Company incurred a net loss of $188,941 during the
Third Quarter 1997, compared to a net loss of $669,080 during the prior
comparable quarter.
NINE MONTHS ENDED SEPTEMBER 28, 1997 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1996.
Revenues for the first nine months of 1997 increased 4% to $4,249,095
from $4,101,070 for the same period in 1996. The increase in revenues was
primarily due to the growth in service revenues as the Company's installed base
of hand-held computers continues to expand.
Cost of sales and services, as a percentage of net revenues, decreased
to 57% during the first nine months of 1997, from 61% during the prior
comparable period. The decrease is primarily attributable to lower cost of
materials, and lower field support cost due to the Company's quality programs
instituted in the last year.
Research and development expenses increased to $1,046,636 in the first
nine months of 1997, from $926,599 for the same period in 1996, an increase of
approximately 13%. The increase is due to the Company's continued effort to
enhance its current products while developing future products.
Selling, general and administrative expenses decreased to $1,801,668 in
the first nine months of 1997 from $1,907,576 in 1996, a decrease of
approximately 6%. The decrease is primarily due to programs implemented to
streamline personnel costs.
As a result, the Company incurred a net loss of $1,026,157 during the
first nine months of 1997, compared to a net loss of $1,248,407 during the prior
comparable period.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalent totaled $89,623 at September 28, 1997 compared
to $722,285 at December 29, 1996. During the first nine months of 1997, the
Company generated net proceeds of $1,474,583 (Note 4) from the sale of
Convertible Preferred Stock and the issuance of Convertible Promissory Notes.
The proceeds were used to fund the operating loss of $1,026,157 in addition to
an increase in accounts receivable.
The Company's primary requirements for capital will be the cost of
systems sold, strategic acquisitions, marketing and sales costs associated with
the Company's expansion into new target markets.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not presently involved in any material pending
litigation.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - K
(a) Exhibits
(11) Computation of per share earnings
(27) Financial Data Schedule.
(b) There were no Reports on Form 8-K filed during the three
months-ended September 28, 1997
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.
NATIONAL DATACOMPUTER, INC.
November 12, 1997 /s/ Malcolm M. Bibby
--------------------------------
Malcolm M. Bibby
President
November 12, 1997 /s/ Gerald S. Eilberg
--------------------------------
Gerald S. Eilberg
Vice President, Finance and Administration
Chief Financial Officer
EXHIBIT 11
NATIONAL DATACOMPUTER, INC.
STATEMENT RE COMPUTATION OF NET LOSS PER COMMON SHARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Third Fiscal Quarter Nine Months
Ended Ended
---------------------------- ---------------------------
September 28, September 30, September 28, September 30,
1997 1996 1997 1996
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net loss, as reported $ (188,941) $ (669,080) $(1,026,157) $(1,248,407)
Preferred Stock preference items:
Interest on convertible preferred
stock (106,500) (84,000) (312,000) (124,000)
------------ ------------ ------------ ------------
Net loss attributable to common
shareholders $ (295,441) $ (753,080) $(1,338,157) $(1,372,407)
Net loss per share $ (0.23) $ (0.61) $ (1.05) $ (1.15)
============ ============ ============ ============
Weighted average shares and dilutive
shares equivalents outstanding 1,309,246 1,230,153 1,277,926 1,196,650
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Dec-28-1997
<PERIOD-END> Sep-28-1997
<CASH> 89,623
<SECURITIES> 0
<RECEIVABLES> 1,546,492
<ALLOWANCES> (98,178)
<INVENTORY> 1,530,361
<CURRENT-ASSETS> 75,589
<PP&E> 1,545,598
<DEPRECIATION> (1,248,064)
<TOTAL-ASSETS> 3,441,425
<CURRENT-LIABILITIES> 1,318,649
<BONDS> 406,412
0
0
<COMMON> 113,382
<OTHER-SE> 1,602,982
<TOTAL-LIABILITY-AND-EQUITY> 3,441,425
<SALES> 0
<TOTAL-REVENUES> 4,249,095
<CGS> 2,427,500
<TOTAL-COSTS> 2,835,052
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,700
<INCOME-PRETAX> (1,026,157)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,026,157)
<EPS-PRIMARY> (1.05)
<EPS-DILUTED> (1.05)
</TABLE>
