SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A-2
(X) Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the quarterly period ended October 31, 1996 or
( ) 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: 0 -17072
WINDSWEPT ENVIRONMENTAL GROUP, INC.
(Formerly Comprehensive Environmental Systems, Inc.)
Delaware 11-2844247
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
100 Sweeneydale Avenue, Bay Shore, New York 11706
(Address of principle executive offices) (Zip Code)
(516) 694-7060
(Registrant's telephone number, including area code)
Comprehensive Environmental Systems Inc. 72B Cabot Street West Babylon, NY 11704
(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) and (2) has been subject to such filing
requirements for the past 90 days.
YES __X__ NO _____
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, Par Value $.0001 10,062,349
(Title of Each Class) (Outstanding at August 31, 1997)
Transitional Small Business Disclosure Format (check one) : Yes _____ No __X__
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE FOLLOWING AMENDS IN ITS ENTIRETY FORM 10-QSB FOR THE QUARTER ENDED OCTOBER
31, 1996 AS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
DECEMBER 17, 1996 AND JULY 14, 1997.
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
CONSOLIDATED BALANCE SHEETS (RESTATED)
(Unaudited)
<TABLE>
<CAPTION>
October 31, April 30,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 447,104 $ 282,933
Accounts receivable, net of allowance for doubtful
accounts of $137,000 at October 31,1996 and
$75,000 at April 30, 1996 2,640,597 2,043,740
Current portion of note receivable 32,940 --
Inventories and prepaid supplies 265,065 265,065
Prepaid expenses 185,617 --
Other current assets 190,046 148,557
------------ ------------
Total Current Assets 3,761,369 2,740,295
------------ ------------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 3,262,552 3,143,477
------------ ------------
OTHER ASSETS
Note receivable 292,060 --
Investment in non-marketable securities, net of
valuation allowance of $5,993,841 at April 30, 1996 -- 628,000
Goodwill, net of accumulated amortization 125,604 131,170
Other assets 74,063 62,447
------------ ------------
TOTAL ASSETS $ 7,515,648 $ 6,705,389
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 312,898 $ 260,952
Accounts payable and accrued expenses 1,511,372 1,335,287
Note payable 100,000 --
Deposit -- 150,000
Income taxes payable 34,603 59,080
Other current liabilities -- 228,591
Obligations of unconsolidated subsidiary, net 145,054 --
------------ ------------
Total Current Liabilities 2,103,927 2,033,910
OTHER LIABILITIES
Long-term debt, net of current portion 469,347 382,324
------------ ------------
Total Liabilities 2,573,274 2,416,234
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 10,000,000 shares authorized,
no shares issued or outstanding -- --
Common stock, $.0001 par value, 50,000,000 shares authorized,
9,103,477 issued less 20,000 treasury shares 910 617
Additional paid-in capital 26,632,509 25,159,377
Treasury stock (10,000) (58,000)
Stock subscription receivable -- (46,988)
Accumulated deficit (21,681,045) (20,765,851)
------------ ------------
Total Stockholders' Equity 4,942,374 4,289,155
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,515,648 $ 6,705,389
============ ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
1
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS (RESTATED)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
October 31, October 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 3,178,140 $ 2,601,913 $ 8,251,542 $ 6,371,661
Cost of revenues 2,419,412 1,675,792 5,962,768 3,893,219
----------- ----------- ----------- -----------
Gross profit 758,728 926,121 2,288,774 2,478,442
Selling, general and
administrative expenses 968,172 998,295 2,206,678 2,474,940
Management restructuring costs 1,193,000 -- 1,193,000 --
----------- ----------- ----------- -----------
Income (loss) before other
income(expense) (1,402,444) (72,174) (1,110,904) 3,502
----------- ----------- ----------- -----------
Other income (expense):
Settlement of legal claims, net 296,654 -- 296,654 (17,500)
Losses on investments (195,068) -- (295,071) --
Income from joint venture -- 22,512 -- 22,512
Gain on sale of marketable security -- 63,999 -- 63,999
Gain on sale of assets, net 221,710 -- 221,710 --
Realized gain on sale of building -- -- -- 188,624
Interest expense (13,236) -- (29,131) --
Interest and dividend income 709 39,732 1,548 39,732
----------- ----------- ----------- -----------
Total other income (expense) 310,769 126,243 195,710 297,367
----------- ----------- ----------- -----------
Income (loss) before
income taxes (1,091,675) 54,069 (915,194) 300,869
Income taxes -- -- -- --
----------- ----------- ----------- -----------
Net income (loss) $(1,091,675) $ 54,069 $ (915,194) $ 300,869
=========== =========== =========== ===========
Earnings (loss) per common share $ (.12) $ .01 $ (.11) $ .07
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 9,065,977 5,427,366 8,331,449 4,419,095
=========== =========== =========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (RESTATED)
FOR THE SIX MONTHS ENDED OCTOBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------ Additional Stock
Number of Par Paid-in Treasury Subscription Accumulated
Shares Value Capital Stock Receivable Deficit Total
--------- ----- ----------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at April 30, 1996 6,097,366 $617 $25,159,377 $(58,000) $(46,988) $(20,765,851) $ 4,289,155
Private placements of
common stock 2,600,000 260 1,232,165 1,232,425
Issuance of common
stock for services 261,111 26 205,974 206,000
Issuance of treasury stock
to settle legal obligations 70,000 58,000 58,000
Return of common stock as
part of legal settlement (20,000) (10,000) (10,000)
Collection of stock subscription
receivable 46,988 46,988
Issuance of common stock for
partial payment of management
restructuring charges 75,000 7 34,993 35,000
Net loss (915,194) (915,194)
---------- ---- ----------- -------- -------- ------------ -----------
Balance at October 31, 1996 9,083,477 $910 $26,632,509 $(10,000) $ -- $(21,681,045) $ 4,942,374
========== ==== =========== ======== ======== ============ ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS (RESTATED)
FOR THE SIX MONTHS ENDED
(Unaudited)
October 31, October 31
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) $ (915,194) $ 300,869
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization 321,329 121,033
Gain on sale of building -- (188,624)
Issuance of common stock for services 206,000 442,250
Losses on investments 295,071 --
Transfer of investment as partial consideration
for termination agreement 330,000 --
Income from joint venture -- (22,512)
Management restructuring costs 211,000 --
Gain on sale of assets, net (221,710) --
Settlement of legal claims, net (305,000) --
Changes in operating assets and liabilities:
Accounts receivable (596,857) (540,593)
Inventories and prepaid supplies -- (274,667)
Prepaid expenses (185,617) --
Note receivable -- 50,000
Other current assets (41,489) (214,535)
Other assets (11,616) (48,405)
Accounts payable and accrued expenses 176,085 696,533
Current Income taxes (24,477) 5,636
Other current liabilities (228,591) 33,105
Reserve for contingencies -- (367,309)
Deferred income taxes -- 42,000
----------- -----------
NET CASH FLOWS FROM OPERATING ACTIVITIES (991,066) 34,781
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for investment in subsidiary -- (10,000)
Deposits advanced -- 397,943
Proceeds from the sale of assets 221,710 --
Obligations of unconsolidated subsidiary, net 145,054 --
Acquisition of fixed assets (431,909) (1,528,552)
Deferred acquisition costs, net -- (103,938)
----------- -----------
NET CASH FLOWS FROM INVESTING ACTIVITIES (65,145) (1,244,547)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable 100,000 --
Proceeds from long-term debt 223,000 --
Principal payments of long-term debt (232,031) (99,407)
Payment of note payable -- (75,000)
Proceeds from issuance of common stock, net
of advance deposits 1,082,425 3,137,784
Stock subscription receivable 46,988 (534,920)
----------- -----------
NET CASH FLOWS FROM FINANCING ACTIVITIES 1,220,382 2,428,457
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 164,171 1,218,691
CASH AND EQUIVALENTS-BEGINNING 282,933 648,023
----------- -----------
CASH AND EQUIVALENTS-ENDING $ 447,104 $ 1,866,714
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED OCTOBER 31, 1996
(Unaudited)
(1) Consolidated Financial Statements The consolidated balance sheet at the end
of the preceding fiscal year has been derived from the audited consolidated
balance sheet contained in the Company's Form 10-KSB and is presented for
comparative purposes. All other financial statements are unaudited. All
unaudited amounts are subject to year-end adjustments and audit, but the
Company believes all adjustments, consisting only of normal and recurring
adjustments, necessary to present fairly the financial position, results of
operations and changes in cash flows for all interim periods presented have
been made. The results of operations for interim periods are not
necessarily indicative of the operating results for the full year.
Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
in accordance with the published rules and regulations of the Securities
and Exchange Commission. These consolidated financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-KSB for the most recent fiscal year.
(2) Management Restructuring Costs As part of the management restructuring
during September 1996, the Company entered into separate termination
agreements with the former Chief Executive Officer("CEO"), Chief Operating
Officer("COO") and Special Securities Counsel("SSC") to the Company. These
agreements call for pay-outs of existing compensation arrangements plus
additional benefits in the form of transferring an investment in
non-marketable securities of $330,000, issuing stock options and other
miscellaneous benefits. Included in Management Restructuring Costs on the
Consolidated Statements of Income are the termination costs related to the
former CEO and SSC for $216,000 and $35,000, respectively. At October 31,
1997, approximately $176,000 of the amounts due the former CEO, represented
by a promissory note, are included in Long-term Debt. Also included in
Management Restructuring Costs are amounts actually paid and the value of
the non-marketable securities transferred at closing of the termination
agreement with the former COO totaling $594,000 As a result of the
indictment of the former COO and SCC in October 1996 on charges of stock
fraud and manipulation, the Company has withheld subsequent payments and
has not accrued for the unpaid balance of the termination agreement with
the former COO totaling approximately $636,000. Even if the indictments and
the allegations contained therein are proven not to be true, there was
still a lack of fiduciary responsibility to the Company by both the former
COO and SSC. In light of the facts and circumstances, the Company has
already made formal demands to the COO and SSC for the return of all
consideration paid and assets transferred pursuant to the termination
agreements through the date of the indictment and is vigorously pursuing
this matter. The Company has also formally cancelled all option
certificates previously issued in connection with the termination
agreements. In addition, Management Restructuring Costs include
approximately $348,000 of legal and professional fees incurred in
connection with these agreements and the subsequent matters resulting from
the indictment.
(3) Statements of Cash Flows
<TABLE>
NON-CASH INVESTING AND FINANCING ACTIVITIES
<S> <C> <C>
Issuance of restricted common shares for the investment
in New York Testing Laboratories, Inc. and Subsidiaries $ -- $ 67,500
========= ========
Step-up in basis of property and equipment resulting from the allocated
purchase price in excess of net assets acquired
from New York Testing Laboratories, Inc. and Subsidiaries $ -- $328,681
========= ========
Issuance of common shares in exchanged for services $ 206,000 $442,250
========= ========
Transfer of non-marketable security as partial
consideration for termination agreement $ 528,000 $ --
========= ========
Note receivable and return of common stock accepted
as partial consideration in settlement of a legal claim $ 285,000 $ --
========= ========
Issuance of long-term debt in connection with the partial
settlement of a legal claim and separate consulting agreement $ 155,000 $ --
========= ========
SUPPLEMENTAL INFORMATION
Interest Paid $ 29,131 $ 24,256
========= ========
Taxes Paid $ 346 $ 224
========= ========
</TABLE>
5
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED OCTOBER 31, 1996
(Unaudited)
(4) Restatement of Consolidated Financial Statements The 10-QSB for the period
ended October 31, 1996 is being restated to reflect a current period charge
for $792,000 of previously deferred restructuring costs as well as include
those costs, previously categorized as other expenses, $401,000, as costs
included in determining income from operations. The restatement resulted in
a decrease in net income and accumulated deficit of $792,000, or a loss of
$.09 per share in each respective period. The Company originally reported,
$139,325, or $.02 earnings per share, for the three month period and
$594,806, or $.07 earnings per share, for the six month period. These
numbers were restated to a net loss of $(652,675), or (.07) loss per
share.for the three month period, and $(197,194), or $(.02) loss per share
for the six month period ended.
In connection with the April 30, 1997 year end accounting closing and
subsequent analysis performed, it was determined that errors had been made
with respect to the determination of the carrying value of the deferred
income tax asset as of April 30, 1996 and April 30, 1995. In addition,
$432,000 of compensation paid to a former officer of the Company had been
accounted for as a reduction of additional paid-in capital during the year
ended April 30,1996. The effect of these changes resulted in an increase to
the Company's Accumulated Deficit of $3,016,000, a decrease in the Deferred
income tax asset of $2,584,000, and an increase of $432,000 in additional
paid-in capital as of April 30, 1996. The Company further determined that
the October 31, 1996 10-QSB/A-1 included additional misstatements. The
accompanying consolidated financial statements have been restated to
correct the errors, resulting in the following changes to accumulated
deficit as of October 31, 1996 and the related consolidated statements for
the six month period then ended.
<TABLE>
<CAPTION>
Net Loss Net Loss Loss Loss
Quarter Six months Per Per Share,
Accumulated ended ended Share, Six months
Deficit 10/31/96 10/31/96 Quarter ended
- ------- -------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
As previously reported and restated $(17,947,045) $ (652,675) $(197,194) $(.07) $(.02)
Overstatement of deferred income tax
asset as of April 30, 1995 (1,782,533) -- -- -- --
Overstatement of deferred income tax
asset as of and for the year ended April
30 ,1996 (801,467) -- -- -- --
Overstatement of additional paid-in
capital and understatement of
compensation expense as of and for the
year ended April 30, 1996 (432,000) -- -- -- --
Compensation expense previously
charged to additional paid-in capital (148,000) -- (148,000) -- (.02)
Inventory book to physical adjustments (105,000) (105,000) (105,000) (.01) (.01)
Write-down of investments (100,000) -- (100,000) -- (.01)
Accrual of special charges (198,000) (198,000) (198,000) (.02) (.03)
Provision for doubtful accounts (62,000) (31,000) (62,000) (.005) (.01)
Accrual of other selling, general, and
administrative expenses (80,000) (80,000) (80,000) (.01) (.01)
Other (25,000) (25,000) (25,000) (.005) --
------------ ----------- --------- ------ -----
As adjusted, October 31, 1996 $(21,681,045) $(1,091,675) $(915,194) $(.12) $(.11)
============ =========== ========= ====== =====
</TABLE>
In addition to the above, the Company reclassified certain income statement
and balance sheet amounts to account for an unconsolidated subsidiary in
the process of liquidation, Laboratory Testing Services, Inc., on the
equity basis, which had previously been consolidated.
Reclassifications of $108,000 for each of the quarters ended July 31, 1996
and October 31, 1996, were made decreasing selling and general
administrative expenses and increasing cost of sales to reflect the proper
classification of certain accounts.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of the fiscal quarters ended October 31, 1996 and 1995,
is being updated as of September 29, 1997 and should be read in conjunction with
the Consolidated Financial Statements contained herein.
RESULTS OF OPERATIONS
- ---------------------
Core operations for the six months showed revenues and a net loss of $8,252,000
and $915,000, respectively, versus $6,372,000 and net income of $301,000,
respectively, for the same period last year. This represents an increase of 30%
in revenues from the prior year resulting from the expansion of environmental
service operations. For the quarter ended October 31, 1996, revenues increased
approximately $576,000, or 22%, from the same period last year. The current net
loss is the direct result of Management Restructuring Costs discussed in Note 2
and below.
Gross profit decreased to 28% compared to 39% for the first six months of fiscal
1996. The gross profit also decreased from 36% to 24% when comparing the three
months ended October 31, 1995 to 1996. This decrease results from a change in
the mix of work compared to last year, to environmental services and testing
operations, which is more labor intensive, as well as certain larger contracts
that normally carry a slightly lower gross profit margin.
Selling, general and administrative expenses decreased approximately 268,000
from the first six months of last year compared to the first six months of this
year. As a percentage of revenues, these expenses were approximately 27% and 39%
for the six months ended October 31, 1996 and 1995, respectively. These expenses
also decreased $30,000 when comparing the quarter ended October 31, 1996 to
1995. This is the direct result of management's continued efforts to streamline
overhead and build a more efficient operation.
Management restructuring costs include non-recurring charges for termination
expenses for the COO, CEO and SCC for $594,000, $ 216,000 and 35,000,
respectively as well as legal fees for approximately $348,000. At October 31,
1996, only $176,000 remains as an obligation to the CEO. As such, these
settlements will not have a significant impact on future cash flows, financial
condition or results of operations.
The gain on sale of assets results primarily from the sale of a professional
engineering licence in the name of New York Testing Laboratories, Inc. for
$225,000 during the current quarter for cash.
During the quarter ended October 31, 1996, the Company settled its arbitration
action with Spartan Dismantling Corp. for $300,000 and is included as income in
settlement of legal claims.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital at October 31, 1996 including cash, was $1,657,000 an increase
of $951,000 or 135% from April 30, 1996. Cash and accounts receivable increased
by $164,000 and $597,000, respectively from April 30, 1996. As of October 31,
1996, the current ratio was 1.8:1. This represents a substantial improvement in
liquidity from April 30, 1996 where such ratio was 1.35:1. It is managements
continued goal to maintain low levels of long-term debt financing.
During the six months ended October 31, 1996, the Company raised net proceeds
from the issuance of common stock of approximately $1,082,000. Said funds were
used to purchase various operational fixed assets, provide working capital to
finance accounts receivable and pay monies required at the closing of the
termination agreements in September 1996.
The Company believes that the current levels of working capital and liquidity
will not be sufficient to support the continued increase in its revenue base and
scope of operations. In this regard, management will be seeking new sources of
permanent capital through domestic private placements of equity and convertible
debt as well as establishing a working capital credit facility with a local bank
to finance accounts receivable to enhance cash flow and business growth.
7
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Pending Litigation
- ------------------
In November, 1994, the Company commenced a civil action in New York State
Supreme Court to recover monies advanced to Mohave Shores Development, Inc.
("Mohave") in anticipation of developing land on an Indian reservation in
Arizona. The Company seeks the return of its $250,000 deposit plus legal fees
and punitive damages. Management intends to continue aggressively pursuing this
matter.
In a civil action which was commenced in August 1995 in United States District
Court, the Company, various current and prior officers and directors have been
named in a lawsuit with various shareholders from Seattle, Washington who had
purchased shares through the same broker. The lawsuit contains various
allegations asserting misrepresentations to the broker and non-disclosure in
public filings of various Reg-S and S-8 stock issuances made by the Company from
August through October 1994. The officers and directors named in the civil
action were Messrs. Mangan (Chief Operating Officer), Varsi (President), Lehrer
(Chairman & CEO), Mazzella (Director) and O'Reilly (Director). Management denies
any wrongdoing, asserts that the complaint is without merit and intends to
vigorously defend these claims. The Company settled this lawsuit in May 1997 for
approximately $120,000, net of insurance proceeds, with monthly payments of
$6,250.
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: None
(b) Reports on Form 8-K
Reports filed on Form 8-K dated September 12, 1996 and September
26, 1996 are hereby incorporated by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
Dated: September 29, 1997
WINDSWEPT ENVIRONMENTAL GROUP, INC.
By:/s/ Michael O'Reilly
-------------------------------------
MICHAEL O'REILLY, Chairman and
Chief Executive Officer
By:/s/ Alan W.Schoenbart
-------------------------------------
ALAN W. SCHOENBART, CPA
Chief Financial Officer
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 447,104
<SECURITIES> 0
<RECEIVABLES> 2,777,597
<ALLOWANCES> 137,000
<INVENTORY> 265,065
<CURRENT-ASSETS> 3,761,369
<PP&E> 3,262,552
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,515,648
<CURRENT-LIABILITIES> 2,103,927
<BONDS> 469,347
0
0
<COMMON> 910
<OTHER-SE> 4,941,464
<TOTAL-LIABILITY-AND-EQUITY> 7,515,648
<SALES> 8,251,542
<TOTAL-REVENUES> 8,251,542
<CGS> 5,562,768
<TOTAL-COSTS> 9,362,446
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,131
<INCOME-PRETAX> (915,194)
<INCOME-TAX> 0
<INCOME-CONTINUING> (915,194)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (915,194)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
