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 January 31, 1997 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
JANUARY 31, 1997 AS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON MARCH 21, 1997 AND JULY 14, 1997.
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
CONSOLIDATED BALANCE SHEETS (RESTATED)
(Unaudited )
<TABLE>
<CAPTION>
January 31, April 30,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 673,571 $ 282,933
Accounts receivable, net of allowance for doubtful
accounts of $168,000 at January 31, 1997 and
$75,000 at April 30, 1996 2,320,736 2,043,740
Current portion of note receivable 27,000 --
Inventories and prepaid supplies 265,065 265,065
Prepaid expenses 165,026 --
Other current assets 209,952 148,557
------------ ------------
Total Current Assets 3,661,350 2,740,295
------------ ------------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 3,486,941 3,143,477
------------ ------------
OTHER ASSETS
Note receivable 288,000 --
Investment in non-marketable securities, net of
valuation allowance of $5,993,841 at April 30, 1996 -- 628,000
Goodwill, net of accumulated amortization 122,821 131,170
Other assets 39,795 62,447
------------ ------------
TOTAL ASSETS $ 7,598,907 $ 6,705,389
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 373,052 $ 260,952
Accounts payable and accrued expenses 1,919,771 1,335,287
Note payable 100,000 --
Deposit -- 150,000
Income taxes payable 34,603 59,080
Other current liabilities 40,157 228,591
Obligations of unconsolidated subsidiary, net 145,055 --
------------ ------------
Total Current Liabilities 2,612,638 2,033,910
OTHER LIABILITIES
Long-term debt, net of current portion 558,981 382,324
------------ ------------
Total Liabilities 3,171,619 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,
9,151,488 issued less 20,000 treasury shares 915 617
Additional paid-in capital 26,667,449 25,159,377
Treasury stock (10,000) (58,000)
Stock subscription receivable -- (46,988)
Accumulated deficit (22,231,076) (20,765,851)
------------ ------------
Total Stockholders' Equity 4,427,288 4,289,155
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,598,907 $ 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 Nine Months Ended
------------------ -----------------
January 31, January 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 4,016,481 $ 1,621,411 $ 12,268,023 $ 7,993,072
Cost of revenues 3,420,747 1,019,425 9,383,515 4,912,644
------------ ------------ ------------ ------------
Gross profit 595,734 601,986 2,884,508 3,080,428
Selling, general and administrative expenses 974,627 1,145,485 3,181,305 3,226,675
Management restructuring costs 150,000 -- 1,343,000 --
------------ ------------ ------------ ------------
Income (loss) from operations before
other income (expense) (528,893) (543,499) (1,639,797) (146,247)
------------ ------------ ------------ ------------
Other income (expense):
Settlement of legal claims, net -- -- 296,654 (17,500)
Losses on investments -- -- (295,071) --
Income from join venture -- -- -- 22,512
Gain on sale of marketable security -- -- -- 63,999
Gain on sale of assets, net -- -- 221,710 --
Realized gain on sale of building -- -- -- 188,624
Interest expense (21,568) -- (50,699) --
Interest and dividend income 430 36,876 1,978 76,608
------------ ------------ ------------ ------------
Total other income (expense) (21,138) 36,876 174,572 334,243
------------ ------------ ------------ ------------
Income (loss) before income taxes (550,031) (506,623) (1,465,225) 187,996
Provision (credit) for income taxes -- (112,200) -- 39,600
------------ ------------ ------------ ------------
Net income (loss) $ (550,031) $ (394,423) $ (1,465,225) $ 148,396
============ ============ ============ ============
Earnings per common share $ (.06) $ (.05) $ (.16) $ .02
============ ============ ============ ============
Weighted average number of
common shares outstanding 9,727,371 8,723,971 9,125,444 7,537,387
============ ============ ============ ============
</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 NINE MONTHS ENDED JANUARY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
Number of Par Paid-in Treasury
Shares Value Capital Stock
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
Balance at April 30, 1996 6,097,366 $ 617 $ 25,159,377 $ (58,000)
Private placements of
common stock 2,600,000 260 1,232,165
Issuance of common
stock for services 309,122 31 240,914
Issuance of treasury stock
to settle legal obligations 70,000 58,000
Return of common stock as
part of legal settlement (20,000) (10,000)
Collection of stock subscription
receivable
Issuance of common stock for
partial payment of management
restructuring costs 75,000 7 34,993
Net loss
------------ ------------ ------------ ------------
Balance at January 31, 1997 9,131,488 $ 915 $ 26,667,449 $ (10,000)
============ ============ ============ ============
<CAPTION>
Stock
Subscription Accumulated
Receivable Deficit Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance at April 30, 1996 $ (46,988) $(20,765,851) $ 4,289,155
Private placements of
common stock 1,232,425
Issuance of common
stock for services 240,945
Issuance of treasury stock
to settle legal obligations 58,000
Return of common stock as
part of legal settlement (10,000)
Collection of stock subscription
receivable 46,988 46,988
Issuance of common stock for
partial payment of management
restructuring costs (1,465,225) (1,465,225)
Net loss ------------ ------------ ------------
Balance at January 31, 1997 $ -- $(22,231,076) $ 4,427,288
============ ============ ============
</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 NINE MONTHS ENDED
(Unaudited)
<TABLE>
<CAPTION>
January 31, January 31,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(1,465,225) $ 148,396
Adjustments to reconcile net income to net cash
flows from operating activities:
Deferred income taxes -- 39,600
Depreciation and amortization 529,125 230,838
Gain on sale of building -- (188,624)
Issuance of common stock for services 240,945 108,500
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 251,000 --
Gain on sale of assets, net (221,710) --
Settlement of legal claims, net (305,000) --
Changes in operating assets and liabilities:
Accounts receivable (276,996) (751,117)
Inventories and prepaid supplies -- (250,000)
Prepaid expenses (165,026) --
Other current assets (61,395) (51,845)
Other assets 22,652 (44,928)
Accounts payable and accrued expenses 584,484 174,108
Current Income taxes (24,477) --
Other current liabilities (188,434) 16,078
----------- -----------
NET CASH FLOWS FROM OPERATING ACTIVITIES (454,986) (591,497)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for investment in subsidiary -- (10,000)
Reserve for contingencies -- (367,309)
Investment in joint venture -- 57,815
Deposits advanced -- 397,943
Equity in unconsolidated subsidiary 145,055 --
Note receivable, net of current receipts (265,000) 50,000
Proceeds from the sale of assets 221,710 --
Acquisition of fixed assets (774,311) (2,237,169)
Deferred acquisition costs, net -- (102,025)
Investment in non-marketable security -- (88,000)
----------- -----------
NET CASH FLOWS FROM INVESTING ACTIVITIES (672,546) (2,298,745)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable 100,000 --
Proceeds from long-term debt 566,419 --
Principal payments of long-term debt (277,662) (100,016)
Payment of note payable -- (75,000)
Proceeds from issuance of common stock, net
of advance deposits 1,082,425 3,024,905
Stock subscription receivable 46,988 --
----------- -----------
NET CASH FLOWS FROM FINANCING ACTIVITIES 1,518,170 2,849,889
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 390,638 (40,353)
CASH AND EQUIVALENTS-BEGINNING 282,933 648,023
----------- -----------
CASH AND EQUIVALENTS-ENDING $ 673,571 $ 607,670
=========== ===========
</TABLE>
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 JANUARY 31, 1997
(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) Statement of Cash Flows
NON-CASH INVESTING AND FINANCING ACTIVITIES
<TABLE>
<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 261,111 and 297,333 common shares,
respectively, in exchange for services rendered $240,945 $108,500
======== ========
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 $ 30,000 $ --
======== ========
SUPPLEMENTAL INFORMATION
Interest Paid $ 50,699 $ 31,878
======== ========
Taxes Paid $ 346 $ 224
======== ========
</TABLE>
(3) Restatement of Consolidated Financial Statements The 10-QSB for the period
ended January 31, 1997 is being restated to reflect a charge for $792,000
of previously deferred restructuring costs in the second fiscal quarter
ended October 31, 1996 as well as include those costs, previously
categorized as other expenses, $551,000, 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.
The Company originally reported, $625,775, or $.07 earnings per share, for
the nine month period ended January 31, 1997. These numbers were restated
to a net loss of $(166,225), or (.02) loss per share.for the nine month
period then ended
5
<PAGE>
WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
(Formerly Comprehensive Environmental Systems, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED JANUARY 31, 1997
(Unaudited)
(3) Restatement of Consolidated Financial Statements (cont'd) 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 January 31, 1997 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 January 31, 1997 and the related consolidated statements for
the nine month period then ended.
<TABLE>
<CAPTION>
Net Loss, Net Loss, Loss Loss
Quarter Nine months Per Per Share,
Accumulated ended ended share, Nine months
Deficit 1/31/97 1/31/97 Quarter ended
------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
As previously reported and restated $(17,916,076) $ 30,969 $ (166,225) $ .00 $(.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 (205,000) (100,000) (205,000) (.01) (.02)
Provision for doubtful accounts (93,000) (31,000) (93,000) (.005) (.01)
Accrual of other selling, general, and
administrative expenses (110,000) (30,000) (110,000) -- (.01)
Write-down of investments (100,000) -- (100,000) -- (.01)
Accrual of special charges (198,000) -- (198,000) -- (.03)
Reversal of revenue recognized (120,000) (120,000) (120,000) (.01) (.01)
Depreciation of fixed assets (100,000) (100,000) (100,000) (.01) (.01)
Accrual of insurance expenses and
losses on contracts (200,000) (200,000) (200,000) (.02) (.02)
Other (25,000) -- (25,000) (.005) --
------------ ------------ ------------ ----- -----
As adjusted, January 31, 1997 $(22,231,076) $ (550,031) $ (1,465,225) $(.06) $(.16)
============ ============ ============ ===== =====
</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 the each of the quarters ended July 31, 1996, October 31,
1996, and January 31, 1997, were made decreasing selling and general
administrative expenses and increasing cost of sales to reflect the proper
classification of certain accounts.
(4) Subsequent Event On February 24, 1997, the Company acquired North Atlantic
Laboratories, Inc. ("NAL") in a merger transaction for restricted
convertible preferred stock and cash totaling approximately $1,300,000 and
$200,000, respectively. The transaction will be accounted for as a purchase
and, as such, will include the financial condition and results of
operations of NAL in the Company's consolidated financial statements from
the date of acquisition. NAL provides certified environmental training,
laboratory testing and consulting services to its customer base throughout
the New York Metropolitan area.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of the fiscal quarters ended January 31, 1997 and 1996,
is being updated as of September 29, 1997 and should be read in conjunction with
the Consolidated Financial Statements contained herein.
RESULTS OF OPERATIONS
Results from operations for the nine months showed revenues and net loss of
$12,268,000 and $(1,465,000) versus revenues of $7,993,000 and net income of
$148,000 for the same period last year. The results for the three months ended
January 31, 1997 showed revenues of $4,016,000 and a net loss of $(550,000)
versus revenues of $1,621,000 and a net loss of $(394,000) for the comparable
period in fiscal 1996. Revenues for the nine and three months ended January
31,1996 increased by $4,275,000, or 53%, and $2,395,000, or 148%, respectively,
when compared to the same periods in fiscal 1996. The growth in revenues is a
direct result of the Company's continued expansion of environmental services as
well as the customer base to which it provides such services. The nine month
loss results from non-recurring charges for management restructuring costs of
$1,343,000. The three month loss results from the non-recurring charges for
management restructuring costs of $150,000 as well as depressed margins on
certain large projects, specifically the 60 Broad Street Asbestos project in New
York City.
Gross profit decreased to 24% compared to 39% for the first nine months of
fiscal 1996. Gross profit decreased from 37% to 15% when comparing the quarter
ended last year to this year. The decrease in gross profit percentage results
from a change in the mix of work compared to last year as well as certain larger
contracts that normally carry a slightly lower gross profit margin.
Selling, general and administrative expenses decreased slightly by $45,000 from
the first nine months of last year compared to the first nine months of this
year. As a percentage of revenues, these expenses were approximately 26% and 40%
for the nine months ended January 31, 1997 and 1996, respectively. For the
quarter ended January 31, 1997, selling, general and administrative expenses
decreased $171,000 compared to the same period last year. These expenses were
approximately 24% and 71% of revenues for the three months ended January 31,
1997 and 1996, respectively. This decrease is the direct result of management's
continuing efforts to streamline overhead and build a more efficient and
profitable operation.
Management restructuring costs for the nine months ended January 31, 1997
includes non-recurring charges for the termination agreements of the former
Chief Operating Officer ("COO), Chief Executive Officer ("CEO") and Special
Securities Counsel to the Company ("SCC") for $594,000, $216,000 and $35,000,
respectively. In addition, non-recurring legal and professional fees of
approximately $498,000 have resulted from matters related to NASDAQ, the SEC and
federal government issues subsequent to the indictment of the former COO and
SSC. Management believes these costs should become significantly less in the
future.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at January 31, 1997 including cash, was $1,049,000 an increase
of $343,000 or 49% from April 30, 1996. Cash and accounts receivable increased
by $391,000 and $277,000, respectively from April 30, 1996. As of January 31,
1997, the current ratio was 1.4:1. This represents an improvement in liquidity
from April 30, 1996 where such ratio was 1.35:1. However, management is actively
seeking a working capital credit facility to finance accounts receivable that
will enhance cash flow and business growth.
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 an action in New York State Supreme
Court to recover $250,000 previously advanced to Mohave Shores Development, Inc.
("Mohave"). 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:
27 - Financial Data Schedule
(b) Reports on Form 8-K: None
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> 9-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 675,571
<SECURITIES> 0
<RECEIVABLES> 2,488,736
<ALLOWANCES> 168,000
<INVENTORY> 165,028
<CURRENT-ASSETS> 3,661,350
<PP&E> 3,486,941
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,598,907
<CURRENT-LIABILITIES> 2,612,638
<BONDS> 558,981
0
0
<COMMON> 915
<OTHER-SE> 4,426,373
<TOTAL-LIABILITY-AND-EQUITY> 7,598,907
<SALES> 12,268,023
<TOTAL-REVENUES> 12,268,023
<CGS> 9,383,515
<TOTAL-COSTS> 13,907,820
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,721
<INCOME-PRETAX> (1,465,225)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,465,225)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,465,225)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
