<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
-------------------------
COMMISSION FILE NUMBER O-17580
-------------------------
FIRETECTOR INC.
(Exact name of small business issuer as specified in its charter)
Delaware 11-2941299
(State or jurisdiction of (IRS Employer identification
incorporation or organization) Number)
262 Duffy Avenue, Hicksville, New York 11801
(Address of principal executive offices Zip Code)
(516) 433-4700
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of May 11, 1998, 4,713,287
shares of Registrant's Common Stock were issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE>
Part I - FINANCIAL INFORMATION
Firetector Inc. and Subsidiaries
Consolidated Balance Sheet
Unaudited
March 31, 1998
----------------
ASSETS
Current assets:
Cash and cash equivalents $ 440,032
Accounts receivable, principally
trade, less allowance for
doubtful accounts of $171,412 3,801,565
Accounts receivable from affiliated companies 514,950
Inventories 1,884,151
Deferred taxes 168,000
Prepaid expenses and other current assets 171,773
-------------
Total current assets 6,980,471
-------------
Property, Plant and Equipment at cost, less
accumulated depreciation and
amortization of $729,495 394,447
Software Development Costs, net 3,469
Other Assets 285,069
Deferred Taxes 206,000
-------------
Total assets $7,869,456
=============
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
Firetector Inc. and Subsidiaries
Consolidated Balance Sheet (continued)
Unaudited
March 31,1998
------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank $1,538,510
Other notes payable 208,614
Accounts payable and accrued expenses 1,207,803
Unearned service revenue 278,692
Current portion of capital lease obligations 20,268
---------------
Total current liabilities 3,253,887
Note payable to bank, less current
portion 178,573 Other notes payable,
less current portion 226,511 Capital lease
obligations, less current portion 24,533
Notes payable to Mirtronics 845,000
--------------
Total liabilities 4,528,504
--------------
Stockholders' equity:
Convertible preferred stock, 2,000,000
shares authorized - none issued and outstanding
Common stock, 25,000,000 shares authorized,
$.001 par value; issued and outstanding
4,713,287 shares 4,713
Capital in excess of par 5,155,482
Deficit (1,819,243)
-----------
Total stockholders' equity 3,340,952
-----------
Total liabilities and stockholders' equity $7,869,456
===========
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
Firetector Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
For The Three Months Ended
March 31,
1998 1997
---------- ----------
Net sales $2,376,370 $3,077,270
Service revenues 1,053,569 1,129,848
---------- ----------
Total revenues 3,429,939 4,207,118
---------- ----------
Cost of sales 1,475,248 2,096,654
Cost of service 697,716 704,491
Selling, general and administrative 1,052,148 1,074,974
Interest expense 56,225 61,208
Depreciation and amortization expense 52,816 65,257
Other (income) net (10,278) (9,412)
---------- ----------
3,323,875 3,993,172
---------- ----------
Income from operations before
provision for income taxes 106,064 213,946
Provision for income taxes:
Current 6,000 27,000
---------- ----------
Net income $100,064 $ 186,946
========== ==========
Earnings per common share
Basic earnings per share $.02 $.05
Diluted earnings per share $.02 $.03
============ ==========
Weighted average number of common
shares outstanding 4,118,287 3,523,287
Weighted average number of common
sand potential dilutive common
shares outstanding 6,353,819 6,745,736
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
Firetector Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
For the Six Months Ended
March 31,
1998 1997
----------- ----------
Net sales $4,096,182 $6,828,947
Service revenues 2,181,110 2,202,119
----------- ----------
Total revenues 6,277,292 9,031,066
----------- ----------
Cost of sales 2,584,614 4,775,935
Cost of service 1,366,992 1,387,361
Selling, general and administrative 2,013,468 2,132,249
Interest expense 111,464 125,498
Depreciation and amortization expense 104,893 127,115
Other (income) net (20,333) (18,491)
----------- ----------
6,161,098 8,529,667
----------- ----------
Income from operations before
provision for income taxes 116,194 501,399
Provision for income taxes:
Current 10,000 53,000
Deferred 5,000
----------- ----------
10,000 58,000
----------- ----------
----------- ----------
Net income $ 106,194 $ 443,399
=========== ==========
Earnings per common share
Basic earnings per share $.03 $.13
Diluted earnings per share $.02 $.06
============ ==========
Weighted average number of common
shares outstanding 3,820,797 3,535,844
Weighted average number of common
and potential dilutive common
shares outstanding 6,349,632 6,756,847
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
Firetector Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For The Six Months Ended
March 31,
1998 1997
----------- ---------
OPERATING ACTIVITIES
Net income $106,194 $443,399
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 123,285 128,710
Provision for doubtful accounts 36,000 33,000
Changes in operating assets and liabilities:
Accounts receivable (16,403) (622,865)
Inventories, prepaid expenses and other
current assets (72,602) 203,237
Accounts receivable from affiliated
companies (21,819) (32,603)
Other assets (785) (44,553)
Accounts payable and accrued expenses (134,581) 369,114
Unearned service revenue (58,648) (81,977)
Due to affiliated companies 3,547 (30,711)
--------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (35,812) 364,751
INVESTING ACTIVITIES
Purchases of property and equipment (20,213) (95,474)
---------- ---------
NET CASH USED IN INVESTING ACTIVITIES (20,213) (95,474)
FINANCING ACTIVITIES
Principal payments on revolving line of
credit, long term debt, notes payable
and capital lease obligations (84,875) (75,753)
Proceeds from revolving line of credit,
notes payable and capital
lease obligations 3,849 334,850
Due to affiliated company (1,969)
Issuance of common stock in connection with
exercise of option 552,000
Repurchase of common stock (552,000)
Repurchase of common stock with
note payable (327,850)
---------- ----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (82,995) (68,753)
---------- ----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (139,020) 200,524
Cash and cash equivalents at beginning
of period 579,052 497,107
---------- ----------
Cash and cash equivalents at end of period $440,032 $697,631
========== ==========
Supplemental Cash Flow Information
The Company restructured preferred stock and notes payable to Mirtronics by the
issuance of $845,000 of new notes. (See Note 5 - Transactions With Related
Parties.)
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results for the six months ended March 31, 1998 are not necessarily indicative
of the results that may be expected for the fiscal year ending September 30,
1998. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Registrant Company ("the Company") and
Subsidiary's annual report on Form 10-KSB for the year ended September 30, 1997.
2. INVENTORY
Inventories are priced at the lower of cost (first-in, first-out) or market and
consist primarily of raw materials.
3. LONG TERM DEBT
The Company has a credit facility with a New York bank (the "Credit Facility").
The revolving credit portion of the facility is $2,300,000 and expired on March
31, 1998 and has a loan payoff requirement by June 30, 1998. The Company is in
discussions with several banks for a new credit facility and expects to
refinance the credit facility with another bank institution. The Credit Facility
includes an additional $315,000 twenty-nine month term loan (with a monthly
amortization of $5,952 and a balloon payment at September 1, 1999). The Credit
Facility has an annual facility fee of .5% and capital expenditures are limited
to $250,000. At March 31, 1998 a total of $1,717,083 was outstanding under this
facility. The Credit Facility currently provides for interest at prime plus 1.5%
on outstanding balances. Advances under the credit facility are measured against
a borrowing base calculated on eligible receivables and inventory. The credit
facility is secured by all of the assets of the Company and all of its operating
subsidiaries, as well as a $300,000 letter of credit provided by Mirtronics Inc.
The Credit Facility includes certain restrictive covenants, which among other
things, impose limitations on declaring or paying dividends, acquisitions and
capital expenditures. The Company is also required to maintain various financial
ratios. At March 31, 1998, the Company was not in default of any of its
financial covenants.
4. NOTES PAYABLE TO MIRTRONICS
At March 31, 1998, notes payable to Mirtronics include:
$620,000 Convertible note at 10% interest
225,000 Non-convertible note at 10% interest
$845,000
The $620,000 note may be converted into 1,240,000 shares of the Company's common
stock at $.50 per share until December 31, 2002. While the notes are payable on
demand, they are subordinate to and subject to a payment restriction under the
Company's credit facility with its bank and, therefore, are classified as a
non-current liability.
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
SIX MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
5. TRANSACTIONS WITH RELATED PARTIES
In consideration of collateral support for the Company's Credit Facility and
various loans over several years, the Company granted to Mirtronics options to
purchase the Company's Common Stock. Mirtronics had the right to acquire up to
an aggregate of 1,840,000 shares of common stock at an exercise price of $.30
per share, a portion of which are held for the benefit of the Company's
Chairman. These options were to expire on December 31, 1998. The Company had
previously entered into a Debt/Equity agreement that provided for the retirement
of debt and the issuance to Mirtronics of 675,000 shares of Preferred Stock,
which could also be converted into 1,350,000 shares of Common Stock. In
addition, the Company was indebted to Mirtronics for materials, loans and
miscellaneous advances in the aggregate amount of $170,218.
On February 17, 1998, the Company and Mirtronics reached an agreement to
restructure the options, convertible debt and preferred stock held by Mirtronics
so as to reduce the potential dilution of these securities by 1,100,000 shares
of common stock. Under this agreement, Firetector redeemed the $675,000 of
Convertible Preferred Stock and $170,000 of convertible debt for an aggregate
price of $845,000. These securities were convertible into 1,690,000 shares of
common stock. In satisfaction thereof, Firetector issued a $620,000 Convertible
Note, with interest at 10%, payable upon demand and convertible into 1,240,000
shares of common stock at a conversion price of $.50 per share until December
31, 2002 and a $225,000 Note (without a convertible feature), with interest at
10%, payable upon demand. The foregoing notes are subordinate to and subject to
a payment restriction under the terms of the credit facility. Also in connection
with this restructuring, Mirtronics exercised 1,840,000 options for common stock
for an aggregate consideration of $552,000 and Firetector simultaneously
repurchased 650,000 of the newly issued shares for $552,000.
The Company has a receivable from Mirtronics and its subsidiaries in the amount
of $514,950 at March 31, 1998.
The Company is also indebted, on a demand basis, to First Corporate Equity Ltd.,
an affiliate of a director of Mirtronics, for notes payable in the aggregate
amount of $144,560 at March 31, 1998.
In consideration of collateral support for the Company's Credit Facility in
1994, the Company granted Gentera Capital Corporation, an Ontario Corporation,
("GCC" formerly known as First Corporate Capital Inc.) options for 500,000
unregistered shares of the Company's common stock at $.30 per share through
December 31, 1999. In July 1996, GCC exercised 100,000 of these options at $.30
per share. An officer of GCC is also a director of Mirtronics.
Effective January 1, 1997, in accordance with the employment contract of an
officer/director, the registrant repurchased 25,312 shares of common stock at a
price of $12.96 per share by means of a seven year promissory note bearing
interest at a rate of 4% per annum.
<PAGE>
FIRETECTOR INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - Continued
SIX MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
6. EARNINGS PER SHARE
The Financial Accounting Standards Board issued SFAS No. 128 "Earnings Per
Shares" which requires companies to report basic and diluted earnings per share
("EPS") computations effective with the Company's quarter ending December 31,
1997. Basic EPS excludes dilution and is based on the weighted-average common
shares outstanding and diluted EPS gives effect to potential dilution of
securities that could share in the earnings of the Company. Diluted EPS reflects
the assumed issuance of shares with respect to the Company's employee stock
options, non-employee stock options, warrants and convertible notes and
preferred stock. The computation for the three and six months ending March 31,
1997 has been restated to conform to the requirements of SFAS N0. 128. Shown
below is a table that sets forth the respective calculations for basic and
diluted EPS
<TABLE>
<CAPTION>
Three Months ended March 31, Six Months ended March 31,
Basic EPS Computation 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income available
to common
shareholders $100,064 $186,946 $106,194 $443,399
Weighted average
outstanding 4,118,287 3,523,287 3,820,787 3,535,844
Basic $.02 $.05 $.03 $.13
========= ========= ========= =========
Three Months ended March 31, Six Months ended March 31,
Diluted EPS Computation 1998 1997 1998 1997
---- ---- ---- ----
Income available to common
shareholders $100,064 $186,946 $106,194 $443,399
Impact of convertible notes 12,400 2,295 6,200 4,590
Diluted net income $112,464 $189,241 $112,394 $447,989
-------- -------- -------- --------
Weighted-average shares 4,118,287 3,523,287 3,820,787 3,535,844
--------- --------- --------- ---------
Plus Incremental shares from
assumed conversions
Non Employee Stock Options 978,441 1,797,899 1,282,816 1,804,704
Convertible preferred stock 1,350,000 1,350,000
Convertible debt 1,240,000 1,240,000
Employee Stock Options* 12,963 43,994 4,573 42,549
Warrants 4,128 30,556 1,456 23,750
----- ------ ----- ------
Dilutive potential
common shares 2,235,532 3,222,449 2,528,845 3,221,003
--------- --------- --------- ---------
Adjusted weighted-average
shares 6,353,819 6,745,736 6,349,632 6,756,847
--------- --------- ---------- ----------
Diluted EPS $.02 $.03 $.02 $.07
========= ========= ========= =========
</TABLE>
*Warrants and employee stock options convertible into 119,375 shares were
antidilutive in both 1998 periods.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Unaudited)
Liquidity and Capital Resources
The Company has a credit facility with a New York City bank (which was recently
acquired by another New York City bank) (the "Credit Facility"). The credit
facility provides for a $2,300,000 revolving line of credit through March 31,
1998 and a $315,000 twenty-nine month term loan (with a monthly amortization of
$5,952 and a balloon payment at September 1, 1999). At March 31, 1998, the
Company owed $1,717,083 under the terms of the credit facility. The credit
facility currently provides for interest at prime plus 1.5% on outstanding
balances. Advances under the credit facility are measured against a borrowing
base calculated on eligible receivables and inventory. The credit facility is
secured by all of the assets of the Company and all of its operating
subsidiaries, as well as a $300,000 letter of credit provided by the Company's
majority shareholder.
The credit facility includes various covenants, which among other things, impose
limitations on declaring or paying dividends, acquisitions and capital
expenditures. The Company is also required to maintain various financial ratios.
At September 30, 1997, and continuing through March 31, 1998, the Company was
not in default of any of its financial covenants.
The credit facility expired on March 31, 1998 and has a loan payoff requirement
by June 30, 1998. The Company is in discussions with several banks for a new
credit facility and expects to refinance the credit facility with another bank
institution.
Net cash used by operations for the six months ended March 31, 1998 amounted to
$35,812 as compared to cash being provided by operations of $364,751 for the
comparable prior year period. The primary reason for the use of cash in
operations was the decrease in income from operations and a reduction of trade
payables. The Company further anticipates meeting its future cash requirements
through continuation of the negotiation of terms with its customers prior to the
beginning of a project, the monitoring of its terms during a project and
completing projects in timely fashion, resulting in faster final payments. It is
the intention of the Company to continue this program throughout fiscal 1998
Results of Operations
The Company's product revenues during the three and six months ended March 31,
1998 decreased to $2,376,370 and $4,096,182 as compared to $3,077,270 and
$6,828,947, respectively for the comparable prior year periods. Product revenues
during the 1997 quarter and six month period included approximately $950,000 and
$1,750,000, respectively of billing in relation to one transit project, which
involved the sale of approximately $700,000 and $1,365,000, respectively, of
lower margin products purchased from a third party for resale. In addition,
during the 1997 six month period, product sales benefitted from significant
construction projects in both the New York and Dallas market areas. During and
subsequent to the fiscal quarter ended March 31, 1998, the Company received new
product orders of $3.9 million, which will be shipped in future periods.
<PAGE>
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Unaudited)
Service revenues during the same three and six month periods of 1998 decreased
to $1,053,569 and $2,181,110 as compared to $1,129,848 and $2,202,119,
respectively, for the comparable prior year periods. The decrease reflects lower
than normal call-in service during the 1998 quarter and six month periods
compared to the comparable 1997 periods. Competition for new product revenues
and retention of existing service contracts remains high in New York.
Gross profit percentage on product revenues for the three and six month periods
ended March 31, 1998 was 38% and 37%, respectively, as compared with 32% and
30%, respectively, for the comparable 1997 periods. The increased gross profit
percentage on product revenues for the three and six months ended March 31, 1998
relates primarily to an improved product mix compared to the 1997 periods, which
included the transit project noted above that carried a lower than typical
margin on products manufactured by an outside vendor.
Gross profit percentage on service revenues for the three and six month periods
ended March 31, 1998 was 34% and 37%, respectively, as compared with 38% and
37%, respectively, for the comparable 1997 periods. The lower gross profit
percentage on service revenues for the three and six months ended March 31, 1998
is due to the decrease in call-in service that occurred during the current three
month period.
Income from operating activities for the three and six month periods ended March
31, 1998 was $106,064 and $116,194, respectively, as compared to income from
operations of $213,946 and $501,399 for the comparable 1997 periods. This
decrease is primarily attributable to lower product revenues as the prior year
three and six month periods included product sales from a major sports facility
in Texas and commencement of shipments on several delayed projects in New York.
During the three and six month periods of 1997, a transit project involved the
sale of approximately $700,000 and $1,365,000, respectively of lower margin
products manufactured by an outside vendor. While the decline in income from
operations during the 1998 periods was related to lower product shipments and
reduced call-in service revenues, the decline was minimized by an improvement in
product gross margin percentage due to product mix and from lower selling,
general and administrative expenses related to the Company's previous cost
containment program. During the past nine months, the Company has intensified
its marketing efforts and expanded its product territory. While this effort has
offset savings in selling, general and administrative cost, the Company has
experienced an improvement in new order bookings, as noted below.
The Company had a current income tax provision representing state and local
taxes and the alternative minimum tax for federal income purposes. The lower
provision during the 1998 periods reflects the effect of reduced income from
operations.
The Company's order position at March 31, 1998 amounted to $6,200,000 as
compared to $5,100,000 at December 31, 1997 and $6,400,000 at March 31, 1997.
Subsequent to March 31, 1998, the Company has received significant new orders
from an airport hotel, several major subway complexes, a major media company, a
hospital center and a nursing home. These orders have increased the Company's
order position to over $8,800,000 as of April 28, 1998. Management believes its
recent intensified marketing efforts will enable it to maintain a significant
product order position.
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
On February 17, 1998, the Company and Mirtronics reached an
agreement to restructure the options, convertible debt and preferred stock held
by Mirtronics so as to reduce the potential dilution of these securities by
1,100,000 shares of common stock. Under this agreement, Firetector redeemed the
$675,000 of Convertible Preferred Stock and $170,000 of convertible debt for an
aggregate price of $845,000. These securities were convertible into 1,690,000
shares of common stock. In satisfaction thereof, Firetector issued a $620,000
Convertible Note, with interest at 10%, payable upon demand and convertible into
1,240,000 shares of common stock at a conversion price of $.50 per share until
December 31, 2002 and a $225,000 Note (without a convertible feature), with
interest at 10%, payable upon demand. Also in connection with this
restructuring, Mirtronics exercised 1,840,000 options for common stock for an
aggregate consideration of $552,000 and Firetector simultaneously repurchased
650,000 of the newly issued shares for $552,000.
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Registrant's Annual Meeting of Stockholders was held on March 26,
1998. Stockholders considered and voted upon (1) the election of five (5)
Directors to Firetector's Board of Directors; and (2) appointment of Moore
Stephens, P.C. as Firetector's Auditors for the fiscal year ending September 30,
1998.
The five nominees for director were unopposed and were, accordingly
elected by the Stockholders. The following table details the votes cast for,
against and abstained from voting on each matter considered by the Stockholders.
MATTER FOR AGAINST ABSTAINED UNVOTED
Daniel Tamkin 3,253,524 37,304 0 0
John Poserina 3,254,746 36,532 0 0
Henry Schnurbach 3,254,746 36,532 0 0
Joseph Vitale 3,254,746 36,532 0 0
Dennis McConnell 3,252,746 38,532 0 0
Auditors 3,262,891 15,102 12,835 0
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits.
Ex-27 Financial Data Schedule
b. Reports on Form 8-K.
No Reports on Form 8-K were filed during the quarter ended March 31,
1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIRETECTOR, INC.
(Registrant)
Date: May 14, 1998 By: DENNIS P. McCONNELL
------------------------------------
DENNIS P. McCONNELL, SECRETARY
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from this
Consolidated Statement of Financial Condition at March 31, 1998 (Unaudited) and
the Consolidated Statement of Income for the Six Months Ended March 31, 1998
(Unaudited) and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 440,032
<SECURITIES> 0
<RECEIVABLES> 3,972,977
<ALLOWANCES> 171,412
<INVENTORY> 1,884,151
<CURRENT-ASSETS> 6,980,471
<PP&E> 1,123,942
<DEPRECIATION> 729,495
<TOTAL-ASSETS> 7,869,456
<CURRENT-LIABILITIES> 3,253,887
<BONDS> 0
0
0
<COMMON> 4,713
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,869,456
<SALES> 6,277,292
<TOTAL-REVENUES> 6,277,292
<CGS> 3,951,607
<TOTAL-COSTS> 6,161,098
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 111,464
<INCOME-PRETAX> 116,194
<INCOME-TAX> 10,000
<INCOME-CONTINUING> 106,194
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,194
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
