<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________.
Commission file number: 33-14065-D
DRY DAIRY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
UTAH 87-0476117
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10105 AMBERWOOD ROAD, FT. MYERS, FL 33913
(Address of principal executive offices) (Zip Code)
(941) 768-3555
(Registrant's telephone number, including area code)
NOT APPLICABLE
(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
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [X] No [ ] and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of common
stock, was 31,729,738 shares of common stock, par value $0.001, as of June 30,
1996.
<PAGE 2>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of June 30, 1996, and the
related audited balance sheet of the Company as of December 31, 1995, and the
related unaudited statements of operations and cash flows for the three month
and six month periods ended June 30, 1996 and 1995, and the unaudited statement
of stockholders' equity for the period from December 31, 1994 through June 30,
1996, are attached hereto and incorporated herein by this reference.
Operating results for the quarter ended June 30, 1996, are not necessarily
indicative of the results that can be expected for the year ending December 31,
1996.
<PAGE> 3
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION> JUNE 30,
1996 DECEMBER 31,
(Unaudited) 1995
------------ ------------
ASSETS
<S> <C> <C>
Current Assets:
Cash....................................... $ 186,926 $ 14,021
Accounts receivable, net of allowance...... 26,724 17,959
Inventory.................................. 66,682 11,259
Deposits and other current assets.......... 19,329 12,843
---------- ----------
Total current assets.................. 299,661 56,082
---------- ----------
Property and Equipment, Net..................... 70,252 72,101
---------- ----------
Total Assets.......................... $ 369,913 $ 128,183
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable .......................... $ 34,976 $ 41,404
Line of credit (Note 6).................... 163,704 -
Notes payable - current.................... 21,577 21,054
Taxes payable.............................. 3,484 673
Payable - related party (Note 7)........... 18,397 22,356
---------- ----------
Total current liabilities............. 242,138 85,487
---------- ----------
Notes payable - long term.................. 12,958 23,944
---------- ----------
Total Liabilities..................... 255,096 109,431
---------- ----------
Stockholders' Equity:
Stock authorized 50,000,000 shares at
$0.001 par value; 31,729,738 and
27,381,058 shares issued and
outstanding, respectively................. 31,730 27,381
Additional paid-in capital................. 1,494,496 1,334,543
Accumulated deficit........................ (1,411,409) (1,343,172)
---------- ----------
Total Stockholders' Equity............. 114,817 18,752
---------- ----------
Total Liabilities and
Stockholders' Equity.................. $ 369,913 $ 128,183
========== ==========
</TABLE>
<PAGE> 4
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Sales.................................... $ 123,167 $ 47,731 $ 192,277 $ 89,419
Cost of sales............................ 102,758 46,888 148,760 65,289
---------- ---------- --------- ---------
Gross profit........................ 20,409 843 43,517 24,130
Operating Expenses:
Selling, general, and administrative..... 105,891 180,874 192,474 275,582
Depreciation............................. 9,828 14,824 19,051 19,719
---------- ---------- --------- ---------
Total operating expenses............ 115,719 195,698 211,525 295,301
---------- ---------- --------- ---------
Net loss from operations...................... (95,310) (194,855) (168,008)
(271,171)
Other income (expenses):
Interest................................. (4,945) - (7,336)
(770)
Loss on leasehold improvements - (4,191) -
(4,191)
Return of common stock................... 108,000 - 108,000 -
Other expenses........................... (533) - (893) -
---------- ---------- --------- ---------
Total other income (expense)........ 102,522 (4,191) 99,771
(4,961)
---------- ---------- --------- ---------
Net Income (Loss)............................. $ 7,212 $ (199,046) $ (68,237)
$(276,132)
========== ========== ========= =========
Net gain (loss) per share..................... $ 0.00 $ (0.02) $ (0.00) $
(0.03)
========== ========== ========= =========
Weighted average number of shares outstanding. 29,963,618 9,574,721 28,672,505 9,500,406
========== ========== ========== =========
</TABLE>
<PAGE> 5
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION> Additional
Common Stock Paid-in Accumulated
Shares Par Value Capital Deficit
--------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Balance,
December 31, 1994.......... 9,287,215 $ 9,287 $ 805,979 $ (810,258)
Common stock issued for 100%
of the issued and outstand-
ing shares of Lombardo's
Pastaria, Inc.............. 195,122 195 (20,731) -
Common stock issued for cash
in private placement
at $1.00 per share......... 76,384 76 76,308 -
Common stock issued for
services at $1.00
per share.................. 16,000 16 15,984 -
Common stock issued for
services at $0.135
per share.................. 955,000 955 127,970 -
Common stock issued for cash
and warrants at $0.10
per share.................. 1,693,837 1,694 167,690 -
Common stock issued for cash
and warrants at $0.05
per share.................. 1,330,000 1,330 65,170 -
Common stock issued for cash
of $110,000 and the exten-
sion of a line of credit
for up to $250,000........ 13,827,500 13,828 96,173 -
Net loss for the year ended
December 31, 1995.......... - - - (532,914)
---------- --------- ---------- ---------
Balances,
December 31, 1995..........27,381,058 27,381 1,334,543 (1,343,172)
Common stock returned from
former Company President... (800,000) (800) (107,200) -
Common stock issued for cash
at $0.05 per share......... 5,000,000 5,000 245,000 -
Common stock issued for
exercise of warrants at
$0.15 per share............ 148,680 149 22,153 -
Net loss for the six months
ended June 30, 1996 - - - (68,237)
--------- --------- ---------- ----------
Balances
June 30, 1996..............31,729,738 $ 31,730 $1,494,496 $(1,411,409)
========== ========= ========== ===========
</TABLE>
<PAGE> 6
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION> FOR THE FOR THE
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operating Activities:
Net gain (loss)............................... $ 7,212 $ (199,046) $ (68,237) $ (276,132)
Adjustments to reconcile net gain (loss) to
net cash provided by operating activities:
Depreciation................................ 9,828 14,824 19,051 19,719
Return of common stock...................... (108,000) - (108,000) -
(Increase) decrease in accounts receivable.. (8,175) (3,874) (8,765) (14,960)
(Increase) decrease in inventory............ (52,445) (3,331) (55,423) (12,221)
(Increase) decrease in other current assets. (6,560) (8,912) (6,486) (8,912)
Increase (decrease) in accounts payable..... (3,236) 8,681 (6,428) 18,286
Increase (decrease) in accrued taxes........ 2,595 6,506 2,811 9,198
---------- --------- --------- ---------
Net cash used by operating activities.... (158,781) (185,152) (231,477) (265,022)
---------- --------- --------- ---------
Investing Activities:
Purchase of property and equipment........... (7,691) (52,396) (17,202) (61,942)
---------- --------- --------- ---------
Net cash used by investing activities.... (7,691) (52,396) (17,202) (61,942)
---------- --------- --------- ---------
Financing Activities:
Repayment of notes payable................... (7,203) - (14,422) -
Loan from shareholder........................ 73,019 30,914 163,704 36,460
Issuance of common stock for cash............ 272,302 196,787 272,302 289,687
---------- --------- --------- ---------
Net cash provided by financing activities 338,118 227,701 421,584 326,147
---------- --------- --------- ---------
(Decrease) Increase in Cash................... 171,646 (9,847) 172,905 (817)
Cash at beginning of period................... 15,280 26,032 14,021 17,002
---------- --------- --------- ---------
Cash at end of period......................... $ 186,926 $ 16,185 $ 186,926 $ 16,185
========== ========= ========= =========
Supplemental cash flows information:
Cash paid for:
Interest..................................... $ 4,945 $ - $ 7,336 $ -
Taxes........................................ $ - $ - $ - $ -
</TABLE>
<PAGE> 7
DRY DAIRY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
The Company was incorporated under the laws of the state of Utah on March 6,
1987. The Company was incorporated for the purpose of providing a vehicle which
could be used to raise capital and seek business opportunities believed to hold
a potential for profit. Since December 1994, when the Company acquired Dry
Dairy International, Inc., and the subsequent acquisition of Lombardo's
Pastaria, Inc. in February 1995, the Company has focused on dry yogurt and
cocktail mixes and gourmet pasta foods.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method: The Company's financial statements are prepared using the
accrual method of accounting. The Company has a calendar fiscal year end.
Principles of consolidation: The accompanying financial statements include the
accounts of Dry Dairy International, Inc. and its wholly owned subsidiary
Lombardo's Pastaria, Inc. All significant intercompany transactions have been
eliminated.
Cash and cash equivalents: Cash equivalents include short-term, highly liquid
investments with maturities of three months or less at the time of acquisition.
Gain or loss per share: The computations of gain or loss per share of common
stock are based on the weighted average number of shares outstanding at the date
of the financial statements.
Inventories: Inventory are stated at the lower of cost of market.
Property and Equipment: Property and equipment are stated at cost, less
accumulated depreciation. Depreciation is provided on the straight-line basis
over the estimated useful lives of the related assets.
Major improvements and betterments of property are capitalized. Maintenance,
repairs and minor improvements are charged to expense in the period incurred.
Upon the sale or other disposition of property, the cost and related accumulated
depreciation are removed from the accounts and any gain or loss is reflected in
income.
Provision for taxes on income: At June 30, 1996, the Company has net operating
loss carry forwards totaling approximately $1,411,000 that may be offset against
future taxable income through the year 2010. No tax benefit has been reported
in the financial statements, as the Company believes there is a 50% or greater
chance the carry forwards will expire unused. Accordingly, the potential tax
benefits of the loss carry forwards are offset by a valuation account of the
same amount.
<PAGE>
<PAGE> 8
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has little cash and has experienced losses from
inception. On October 20, 1995, the Company announced that it had completed the
sale of a controlling interest in the Company to Phillip Lacerte of Dallas,
Texas. In connection with the sale of control, Mr. Lacerte has extended the
Company a line of credit of up to $250,000, against which, at June 30, 1996, the
Company had drawn $163,704.
NOTE 4 - STOCK TRANSACTIONS
In April 1996, the former President and Chairman of the Board of the Company,
William J. Thome, returned for cancellation, 800,000 shares of common stock of
the Company that were originally issued to him under the Company's 1995 Non-
Qualified Stock Option Plan in August 1995. Because the market value of these
shares was treated as an operating expense to the Company during the third
quarter of 1995, the cancellation of the shares had an income effect of $108,000
on the Company's consolidated statements of operations in the three month period
ended June 30, 1996, and reduced the number of issued and outstanding shares by
800,000.
In May 1996, the Company sold 5,000,000 shares of its restricted common stock
for cash at a purchase price of $0.05 per share for cash proceeds of $250,000.
In June 1996, 148,680 common stock purchase warrants were exercised at a price
of $0.15 per share for cash proceeds of $22,302.
The issuance of the additional 5,000,000 shares of common stock, the exercise of
the 148,680 common stock purchase warrants and the cancellation of the 800,000
shares of common stock resulted in the reduction in Mr. Lacerte's ownership
interest from 50.5% to 43.6% at June 30, 1996. Pursuant to the terms of the
Share Purchase Agreement, Mr. Lacerte has a 30 business day right of first
refusal to purchase from the Company, on the same terms and conditions as the
common stock referred to above, that number of shares of common stock of the
Company that would permit Mr. Lacerte to maintain 50.5% control of the Company's
total issued and outstanding shares of common stock.
<PAGE> 9
NOTE 5 - STOCK OPTION PLANS
The Company has granted stock options pursuant to the various stock options
plans referred to in the table below:
1995 1996
------------------------- -------------------------
Non-Qualified Incentive Non-Qualified Incentive
Stock Option Stock Option Stock Option Stock Option
Plan Plan Plan Plan
------------- ------------ ------------- ------------
Outstanding, December
31, 1994 - - - -
Options Authorized 1,500,000 1,500,000 - -
Options Issued During
Fiscal Year 1995 955,000 - - -
--------- --------- --------- ---------
Unissued at December
31, 1995 545,000 1,500,000 - -
Canceled, April 1996 (800,000) - - -
Options Issued April
1996 1,100,000 - 2,500,000 5,050,000
--------- --------- --------- ---------
Options Outstanding
at June 30, 1996 1,100,000 - 2,500,000 5,050,000
--------- --------- --------- ---------
Unissued at June 30,
1996 245,000 1,500,000 - -
========= ========= ========= =========
NOTE 6 - LINE OF CREDIT
A shareholder of the Company has agreed to provide a line of credit to the
Company of up to $250,000 for the purpose of purchasing raw material inventory
and the direct costs associates related thereto. The line of credit bears
interest at eight percent (8%) per annum on the average monthly balance. The
balance owed on the line of credit, including interest, is $163,704 at June 30,
1996.
NOTE 7 - RELATED PARTY TRANSACTIONS
In addition to the shares issued to acquire Lombardo's Pastaria, Inc., the
Company assumed a payable of the former shareholders of Lombardo's. At June 30,
1996, the amount payable was $18,397.
<PAGE> 10
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Plan of Operation
The Company develops, manufactures, and markets specialty pasta products to
gourmet restaurants and wholesale food service distributors, as well as dry mix
products, such as cocktail mixes and yogurts. Although the Company is producing
product for sale, it does not at this time have substantial assets to support
significant future development, manufacturing, and marketing of these products
without additional working capital. Due to the lack of assets and working
capital, the Company financial statements contain a "going concern" modification
that places into question the Company's ability to continue without substantial
increases in revenue or additional equity capital.
In October 1995, the Company completed the sale of a controlling interest
in the Company to Mr. Phil Lacerte of Dallas, Texas. Mr. Lacerte is a principal
owner and executive vice president of Lacerte Software Corporation, Dallas,
Texas, a manufacturer of computer software for tax professionals. The terms of
the purchase agreement provided that the Company issue to Mr. Lacerte 13,827,500
shares of the Company's restricted common stock, constituting 50.5% of the
Company's total issued and outstanding shares, in exchange for a cash payment of
$110,000 and the extension of a line of credit for up to $250,000, to meet the
Company's current operational needs. Interest on the line of credit is eight
percent (8%) per annum. A total of $163,704, including accrued interest, has
been advanced to the Company against this line of credit as of June 30, 1996.
In February 1996, the Company received formal notification from the United
States Department of Defense that the Company had been granted a contract to
manufacture and deliver 24,000 cases of vanilla flavored yogurt mix with an
expected sales value of $570,000. In May 1996, the Company manufactured and
shipped 2,400 cases of this order with an invoice value of $57,600. The product
is blended, packaged and shipped from an off-site facility under a joint venture
agreement with Custom Blending & Packaging, Inc., Little Rock, Arkansas. The
Company estimates that it nets approximately $2.00 per case. The working
capital required for this contract comes from the Company's line of credit
established with Mr. Lacerte.
In April 1996, the former President and Chairman of the Board, William J.
Thome, returned to the Company for cancellation 800,000 shares of common stock
that were originally issued to him under a 1995 Non-Qualified Stock Option Plan
in August 1995. Because the market value of these shares was treated as an
operating expense to the Company in the third period of 1995, the return of
these shares had an income effect on the consolidated statements of operations
in the second quarter of 1996 of $108,000, and reduced the number of shares of
common stock issued and outstanding by 800,000.
In May 1996, the Company issued an additional 5,000,000 shares of its
restricted common stock for cash at $0.05 per share for net proceeds to the
Company of $250,000. In June 1996, 148,680 outstanding common stock purchase
warrants were exercised at a price of $0.15 per share for net cash proceeds to
the Company of $22,302. The Company believes that with the additional equity
capital, coupled with Mr. Lacerte's line of credit, that it has sufficient
working capital for the balance of the current fiscal year.
<PAGE> 11
The Company is attempting to increase the market base for its pasta
products in the southwestern Florida area, as well as continue its expansion
efforts into the southern and eastern United States. Rogers-American Company,
Inc., a Florida based food service broker with 23 sales professionals, has begun
marketing the Company's specialty pasta products throughout Florida.
Discussions are underway between the Company and other regional and national
food service distributors in an attempt to reach new markets for the Company's
products.
The Company has begun marketing its new 98% Fat Free microwavable pasta
"Ultimate Dinners for Two" through U.S. Marketing, a national sales-marketing
organization with business contacts with major food retail outlets throughout
the United States. The Company's Fat Free "Ultimate Dinners for Two" program
consists of five different dinners, including: Cheese Ravioli, Seafood Ravioli,
Vegetable Ravioli, Seafood Jumbo Shells, and Cheese Jumbo Shells.
Liquidity and Capital Resources
At June 30, 1996, the Company had current assets of $299,661, and current
liabilities of $242,138, resulting in working capital of $57,523. The majority
of the current liabilities is a line of credit of $163,704, including interest,
owed to Mr. Phil Lacerte, the Company's largest shareholder. The increase in
the Company's working capital is due primarily to the sale of shares of common
stock in May 1996 for net cash to the Company of $250,000. In addition, in June
1996, 148,680 outstanding common stock purchase warrants were exercised at a
price of $0.15 per share for net cash proceeds to the Company of $22,302.
Although the Company reported a net income of $7,212 for the three month
period ended June 30, 1996, it incurred a net loss from operations of $95,310.
The net income resulted from the cancellation of 800,000 shares of common stock
originally issued to the former President and Chairman of the Board, William J.
Thome, in August 1995, under the Company's Non-Qualified Stock Option Plan.
Because the market value of these shares was treated as an operating expense to
the Company in the third period of 1995, the return of these shares had an
income effect on the consolidated statements of operations in the second quarter
of 1996 of $108,000. The majority of the operating loss is attributed to
expenses incurred in connection with the development and testing of the
Company's new line of 98% fat free pasta dinners that it anticipates selling to
regional and national retail grocery chains.
During the second quarter of 1996, the Company increased the borrowing
against its line of credit, including interest, by $73,019. At June 30, 1996,
the balance owed on this line of credit was $163,704, including accrued
interest.
Although management anticipates improvement in revenue during the remainder
of the year, the Company will continue to rely on both debt and equity financing
of the Company's operations. The Company is hopeful that the newly raised
equity capital of $250,000 and the extension of the line of credit with Mr.
Lacerte, will allow the Company to increase marketing efforts, thus resulting in
increased sales revenues.
The Company will continue to seek other sources of financing in addition to
its existing arrangements. However, due to the Company's overall financial
condition, the Company does not anticipate substantial, if any, additional debt
financing.
<PAGE> 12
Results of Operations
In the second quarter of 1996, the Company recorded sales of $123,167,
compared to sales of $47,731 for the same prior year period, an increase of
158%. For the six month period ended June 30, 1996, sales were $192,277
compared to $89,419 for the similar prior year period, an increase of 115%.
However, the cost of goods sold as a percent of sales increased due to higher
raw material prices, a reduction of selective product prices to become more
competitive in the marketplace, and the costs associated with the development
and expansion of the Company's product base.
The Company has shown a substantial reduction of its operating expenses
during the second quarter of 1996, 86% of sales compared to 279% of sales for
the similar prior year period. Excluding depreciation expense, operating
expenses were $74,983 less than the similar prior year three month period. The
operating expenses currently being incurred are focused primarily on sales and
marketing efforts and programs in an attempt to attract new buyers for the
Company's food service products and its new 98% Fat Free microwavable "Ultimate
Dinners for Two" program.
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
None.
- --------------------------------------------------------------------------------
ITEM 2. CHANGES IN SECURITIES
- --------------------------------------------------------------------------------
None.
- --------------------------------------------------------------------------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- --------------------------------------------------------------------------------
None.
- --------------------------------------------------------------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------------------------
None.
- --------------------------------------------------------------------------------
ITEM 5. OTHER INFORMATION
- --------------------------------------------------------------------------------
None.
<PAGE> 13
- --------------------------------------------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
(a) EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K.
None.
- --------------------------------------------------------------------------------
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.
DRY DAIRY INTERNATIONAL, INC.
[Registrant]
Dated: July 29, 1996 /S/ GEORGE R. FARQUHAR
---------------------------------------
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED JUNE 30,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S FORM 10-QSB FOR THE PERIOD ENDED JUNE 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 186,926
<SECURITIES> 0
<RECEIVABLES> 27,224
<ALLOWANCES> (500)
<INVENTORY> 66,682
<CURRENT-ASSETS> 299,661
<PP&E> 194,203
<DEPRECIATION> (123,952)
<TOTAL-ASSETS> 369,913
<CURRENT-LIABILITIES> 242,138
<BONDS> 0
0
0
<COMMON> 1,526,226
<OTHER-SE> (1,411,409)
<TOTAL-LIABILITY-AND-EQUITY> 369,913
<SALES> 192,277
<TOTAL-REVENUES> 192,277
<CGS> 148,760
<TOTAL-COSTS> 192,474
<OTHER-EXPENSES> 19,051
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,336
<INCOME-PRETAX> (68,237)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,237)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
