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, 1997
[ ] 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 43,195,688 shares of common stock, par value $0.001, as of June 30,
1997.
<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, 1997, and the
related audited balance sheet of the Company as of December 31, 1996, and the
related unaudited statements of operations, and cash flows for the three month
and the six month periods ended June 30, 1996 and 1997, and the unaudited
statement of stockholders' equity for the period from December 31, 1995
through June 30, 1997, are attached hereto and incorporated herein by this
reference.
Operating results for the six months ended June 30, 1997, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1997.
<PAGE>
3
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1997 1996
(Unaudited) (Audited)
------------ ------------
ASSETS
Current Assets:
Cash $ 21,702 $ 9,605
Accounts receivable, net of allowance (Note 2) 162,494 73,448
Inventory (Note 4) 113,596 88,110
Deposits and other current assets(Note 13) 11,434 8,954
---------- ----------
Total current assets 309,226 180,117
---------- ----------
Property and Equipment, Net (Note 5) 660,845 98,246
---------- ----------
Total Assets $ 970,071 $ 278,363
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 81,781 $ 27,137
Notes payable - current (Note 7) 38,620 16,889
Taxes payable 4,949 4,952
Payable - related party (Note 10) 12,049 15,128
---------- ----------
Total current liabilities 137,399 64,106
---------- ----------
Notes payable - long term 114,138 7,478
Line of credit (Note 9) 107,151 -
---------- ----------
Total Liabilities 358,688 71,584
---------- ----------
Stockholders' Equity:
Stock authorized 50,000,000 shares at
$0.001 par value; 43,195,688 and
35,629,021 shares issued and
outstanding, respectively 43,197 35,296
Additional paid-in capital 2,379,896 1,707,797
Accumulated deficit (1,811,710) (1,536,314)
---------- ----------
Total Stockholders' Equity 611,383 206,779
---------- ----------
Total Liabilities and
Stockholders' Equity $ 970,071 $ 278,363
========== ==========
<PAGE>
4
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Sales $ 436,538 $ 123,167 $ 497,192 $ 192,277
Cost of sales 333,200 102,758 387,334 148,760
--------- ---------- ---------- ----------
Gross profit 103,338 20,409 109,858 43,517
Operating Expenses:
Selling, general,
administrative 268,650 105,891 359,074 192,474
Depreciation 9,164 9,828 19,127 19,051
--------- --------- ---------- ---------
Total operating expenses 277,814 115,719 378,201 211,525
--------- --------- ---------- ---------
Net loss from operations (174,476) ( 95,310) ( 268,343) ( 168,008)
Other income (expenses):
Interest ( 5,719) ( 4,945) ( 8,296) ( 7,336)
Rental Income - - 1,900 -
Return of common stock - 108,000 - 108,000
Other expenses ( 535) ( 533) ( 657) ( 893)
--------- --------- ---------- ---------
Total other income (expense) ( 6,254) 102,522 ( 7,053) 99,771
--------- --------- ---------- ---------
Net Income (Loss) $(180,730) $ 7,212 $( 275,396) $( 68,237)
========= ========= ========== =========
Net gain (loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========= ========= ========== =========
Weighted average number of shares
outstanding 39,079,022 29,963,618 39,245,688 28,672,505
========== ========== ========== ==========
</TABLE>
<PAGE>
5
DRY DIARY 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>
Balances,
December 31, 1995 27,381,058 $27,381 $1,334,543 -
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 -
Common stock issued for
exercise of option at
$0.03 per share 250,000 250 7,250 -
Common stock issued for
exercise of option at
$0.03 per share 300,000 300 8,700 -
Common stock issued for
equipment purchase 125,050 125 9,879 -
Common stock issued for
debt at $0.03 per share 300,000 300 8,700 -
Common stock issued for
debt at $0.07 per share 2,590,900 2,591 178,772 -
Net loss for the year
ended December 31, 1996 - - - (193,142)
---------- ------- ---------- -----------
Balances
December 31, 1996 35,295,688 35,296 1,707,797 (1,536,314)
Common stock issued for cash
at $0.075 per share 333,333 334 24,666 -
Common stock issued for
Equipment at $0.100 per share 2,800,000 2800 277,200 -
Common stock issued for cash
at $0.075 per share 3,466,667 3,467 256,533 -
Common stock issued for cash
at $0.100 per share 1,000,000 1,000 99,000 -
Common stock issued for cash
at $0.050 per share 300,000 300 14,700 -
Net loss for the six month
period ended June 30, 1997 - - - (275,396)
---------- -------- ---------- -----------
Balances June 30, 1997 43,195,688 $ 43,197 $2,379,896 $(1,831,710)
========== ======== ========== ===========
</TABLE>
<PAGE>
6
DRY DAIRY INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating Activities:
Net gain (loss) $ (180,730) $ 7,212 $ (275,396) $ (68,237)
Adjustments to reconcile net gain
(loss) to net cash provided
by operating activities:
Depreciation 9,164 9,828 19,127 19,051
Return of Stock - (108,000) - (108,000)
(Increase) decrease in accounts
receivable (88,833) (8,175) (89,046) (10,525)
(Increase) decrease in inventory (29,056) (52,445) (25,486) (55,423)
(Increase) decrease in other
current assets 66,915 (6,560) (2,480) (4,726)
Increase (decrease) in accounts
payable 105,443 (3,236) 161,565 (6,428)
Increase (decrease) in accrued taxes 275 2,595 (3) 2,811
----------- ----------- ----------- ----------
Net cash used by operating activities (116,822) (158,781) (211,719) (233,312)
----------- ----------- ----------- ----------
Investing Activities:
Purchase of property and equipment (581,725) (7,691) (581,726) (17,202)
----------- ----------- ----------- ----------
Net cash used by investing
activities (581,725) (7,691) (581,726) (17,202)
----------- ----------- ----------- ----------
Financing Activities:
Increase in notes payable 24,334 (7,203) 18,391 (12,587)
Increase (decrease) in Loan from
shareholder 36,883 73,019 107,151 163,704
Issuance of common stock 655,000 272,302 680,000 272,302
----------- ----------- ----------- ----------
Net cash provided by financing
activities 716,217 338,118 805,542 423,419
----------- ----------- ----------- ----------
(Decrease) Increase in Cash 17,670 171,646 12,097 172,905
Cash at beginning of period 4,032 15,280 9,605 14,021
----------- ----------- ----------- ----------
Cash at end of period $ 21,702 $ 186,926 $ 21,702 $ 186,926
=========== =========== =========== ==========
Supplemental cash flows information:
Cash paid for:
Interest $ 5,719 $ 4,945 $ 8,295 $ 7,343
Taxes $ - $ - $ - $ -
/TABLE
<PAGE>
7
DRY DAIRY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997 AND DECEMBER 31, 1996
NOTE 1 - ORGANIZATION
Dry Dairy International, Inc. (The Company) was incorporated under the laws of
the state of Utah on March 6, 1987. The Company was organized 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. The Company has
decided to focus on specialty gourmet 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
subsidiaries Lombardo's Pastaria, Inc., Tulip Bakery, Inc. and NGU
Distribution, 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 or 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.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Provision for taxes on income: At December 31, 1996, the Company had net
operating loss carry forwards totaling approximately $1,500,000 that may be
offset against future taxable income through the year 2011. 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.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
8
Loss from Discontinued Operations: The Company has discontinued all yogurt
operations and is now focusing on the pasta and bakery operations. The loss
from discontinued operations for the year ended December 31, 1996, including
sales of $116,131 as well as costs of $160,136 resulting in a net loss from
discontinued operations of $44,005 for the year ended December 31, 1996.
Accounts Receivable: Accounts receivable are shown net of the allowance for
doubtful accounts of $500 and $500 at June 30, 1997 and December 31, 1996.
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 Philip Lacerte
of Dallas, Texas. The terms of the purchase agreement provided that the
Company issue to Lacerte 13,827,500 shares of the Company's restricted common
stock, which constitute 50.5% of the Company's outstanding shares, in exchange
for cash of $110,000 and the extension of a line of credit for up to $250,000
to meet the Company's current operating needs.
NOTE 4 - INVENTORIES
Inventories are comprised of the following at June 30, 1997 and December 31,
1996 respectively:
Raw materials $ 22,014 $ 16,157
Packaging & other 28,250 41,189
Work in Process 4,965 -
Finished goods 58,366 30,764
-------- --------
$113,595 $ 88,110
======== ========
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at June 30, 1997 and
December 31, 1996 respectively:
Machinery and equipment $748,770 $167,045
Vehicle 27,715 27,715
Furniture and fixtures 27,100 27,100
Leasehold improvements 13,908 13,908
-------- --------
817,493 235,768
(156,649) (137,522)
-------- --------
$660,844 $ 98,246
======== ========
NOTE 6 - LEASES
The Company has a five year lease on the 7,200 square foot facility where it
produces its products, with two one-year options after that period. The lease
requires the Company to maintain normal wear and tear maintenance on the
9
premises. The Company will also pay for its pro-rated share of any and all
increases in real estate taxes and building insurance.
Future minimum lease payments under this lease as of June 30, 1997 and
December 31, 1996 respectively are:
1997 $ 23,346 $ 46,692
1998 48,206 48,206
1999 49,732 49,732
2000 8,331 8,331
-------- --------
$129,615 $152,961
======== ========
NOTE 7 - NOTES PAYABLE
Long-term debt is comprised of the following at June 30, 1997 and December 31,
1996, respectively:
June 30, 1997 December 31, 1996
-------------- -----------------
Installment note payable to a financial
institution, collateralized by
equipment, interest at 11.00%, monthly
payments of $1,500.43 including interest,
final payment due August 1997 $ 3,000 $ 11,505
Installment note payable to a financial
institution, collateralized by vehicle,
interest at 10.75%, monthly payments of
$538 including interest, final payment
due February 1999 $ 9,759 $ 12,862
Installment note payable to a financial
institution, collateralized by bakery
equipment, interest at 10.50%, six month
demand note due September 15, 1997 $30,000 -
------- --------
Total notes payable $42,759 $ 24,367
Less current maturities 35,281 16,889
------- --------
Total Long-term debt $ 7,478 $ 7,478
======= ========
The scheduled maturities of long-term debt at June 30, 1997 and December 31,
1996 are as follows:
1997 $35,281 $16,889
1998 5,992 5,992
1999 1,486 1,486
------- -------
Total long-term debt $42,759 $24,367
======= =======
<PAGE>
10
NOTE 8 - STOCK TRANSACTIONS
On March 15,1997 the Company issued 333,333 shares of stock valued at $0.075
per share for cash.
In April of 1997 the company sold 3,466,667 shares of stock at $.075 per share
to complete a transaction begun in the 1st quarter of 1997. The total amount
of shares sold in the transaction was 3,800,000 shares. The proceeds were
used to fund the costs incurred in the asset purchase of Tulip Bakery
equipment.
In April of 1997 the Company paid 2,800,000 shares of its restricted common
stock to the Owners of Tulip Pita Bread Center II for the purchase of certain
assets of the company (see note 13).
In May of 1997 the company sold 1,000,000 shares of stock for $.10 per share.
The proceeds were used to fund operations.
In May of 1997 the company sold 300,000 shares at $.05 for cash to fund
operations.
NOTE 9 - LINE OF CREDIT - RELATED PARTY
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 related thereto. The line of credit bears interest a 8%
per annum on the average monthly balance. The balance owed on the line of
credit is $107,151 at June 30, 1997 and $-0- at December 31, 1996.
NOTE 10 - RELATED PARTY TRANSACTIONS
In addition to the shares issued to acquire Lombardo's the Company assumed a
payable to the former shareholders of Lombardo's. The payable is unsecured,
and is properly classified as a current liability. At June 30, 1997 and
December 31, 1996 respectively the balance due to the shareholders was $12,049
and $15,128.
<PAGE>
11
NOTE 11 - 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 - -
Options Canceled
April 1996 (800,000) - - -
Options Issued April
1996 net of non
performance
cancellations 560,000 - 2,500,000 5,050,000
Options Exercised
July, August and
September 1996 (250,000) - - -
Options Exercised
October through
December, 1996 (300,000) - - -
--------- --------- --------- ---------
Unissued at June
30, 1997 785,000 1,500,000 - -
========= ========= ========= =========
12
NOTE 12 - DEPOSITS
The company incurred expenses in regard to the purchase of certain assets and
distribution routes of the Florida based Tulip Pita Bread Center. The
purchase will be completed in the second quarter of 1997.
June 30, 1997 December 31, 1996
------------- -----------------
Rent Deposit $ 7,291 $ 7,291
Florida Power & Light Deposit 1,420 1,420
Deposit on purchase of
sealing machine 242 242
------------- -----------------
$ 78,349 $ 8,953
============= =================
12
NOTE 13 - ASSET PURCHASE
In April of 1997, the Company closed an asset purchase transaction with
privately held Tulip Pita Bread Center II to purchase a production line for
the manufacturing of pita bread and sweet bread loaves. The equipment is
located in Ft. Myers, FL. In addition, the Company has purchased the
distribution rights and assumed control of the direct store distribution
system in place for "Tulip" bakery products. The Company has created two new
subsidiaries, Tulip Bakery, Inc. to produce fresh baked goods for distribution
and NGU Distribution, Inc. to manage the distribution of Tulip Bakery
products.
The agreement to purchase the equipment line calls for the Company to pay
$165,000 and 1,600,000 shares of it's restricted common stock to the owners of
the equipment line. In a separate purchase agreement, "Tulip's" distribution
rights and delivery system were purchased for 1,200,000 restricted shares. In
addition, the Company will assume up to $45,000 of existing Tulip debt.
Currently, the Tulip products are distributed via direct store delivery to
approximately 300 supermarkets in Florida with plans to expand into Georgia in
1997.
<PAGE>
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company is in the specialty food manufacturing and distribution
business in the East and Southeast United States. The Company develops,
manufactures and markets a line of specialty frozen pasta items and fresh
baked pita and specialty bread items. In addition, the Company distributes
fresh baked goods in the Southeastern United States.
Although the Company is producing product for sale, it does not at this
time have substantial assets to support future development, manufacturing and
marketing of these products without additional working capital. Due to the
lack of assets and working capital, the Company's 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.
The Company has entered the specialty bread business as a manufacturer
and distributor with its purchase of certain assets and distribution routes of
the Florida based Tulip Pita Bread Center II. (See note 13 to the financial
statements.) The purchase has significantly increased second quarter sales
over prior periods for the Company.
Liquidity and Capital Resources
At June 30, 1997, the Company had current assets of $309,226, and
current liabilities of $137,399, resulting in working capital of $171,827.
During the first second of 1997, the Company increased the borrowing against
its line of credit, including interest, by $36,883. The company also received
$375,000 from the issuance of 4,766,667 shares of its common stock.
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
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.
Results of Operations
During the three months ended June 30, 1997, the Company recorded sales
of $436,538, compared to sales of $123,167 for the same three month period
ended June 30, 1996. For the six months ended June 30, 1997, the Company had
sales of $497,192, compared to $192,277 for the same six month period ended
June 30, 1996. The increases in sales are in large part due to the expansion
of the Company's business into the pita bread and sweet bread bakery business.
Despite the increases in sales during the period, the Company had increased
operating expenses, $277,814 for the three month period and $378,201 for the
the six month period ended June 30, 1997, a majority of which was associated
with the Company's expansion into the bakery products line and expenses
currently being incurred on sales and marketing efforts and programs in an
attempt to attract new buyers for the Company's products.
14
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.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K.
The Company file reports on Form 8-K dated April 7, 1997 and May 9,
1997, reporting sales of equity securities in reliance on Regulation S
promulgated under the Securities Act of 1933, as amended.
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 28, 1997
/S/ Robert L. Matzig
President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000814070
<NAME> DRY DIARY INTERNATIONAL, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 21,702
<SECURITIES> 0
<RECEIVABLES> 162,484
<ALLOWANCES> 0
<INVENTORY> 113,596
<CURRENT-ASSETS> 309,226
<PP&E> 660,845
<DEPRECIATION> 0
<TOTAL-ASSETS> 970,071
<CURRENT-LIABILITIES> 137,399
<BONDS> 0
0
0
<COMMON> 2,423,093
<OTHER-SE> (1,811,710)
<TOTAL-LIABILITY-AND-EQUITY> 970,071
<SALES> 497,192
<TOTAL-REVENUES> 497,192
<CGS> 397,334
<TOTAL-COSTS> 378,201
<OTHER-EXPENSES> 5,153
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,900
<INCOME-PRETAX> (275,396)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (275,396)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
