SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------
FORM 10-Q
(Mark one)
|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
OR
|_| TRANSITIONAL REPORT PURSUANT TO SECTION 13 0R 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________
COMMISSION FILE NUMBER 0-17292
ACCUHEALTH, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-3176233
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1575 BRONX RIVER AVENUE
BRONX, NEW YORK 10460
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 518-9511
Indicate by check mark (X) whether the registrant 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.
CLASS OUTSTANDING AT AUGUST 7, 1997
Common stock, par value $.01 per share 1,787,598 Shares
1
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ACCUHEALTH, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
--------
Item 1. Condensed Consolidated Financial Statements.
Condensed Consolidated Balance Sheets at
June 30, 1997 and March 31, 1997 .......................... 3
Condensed Consolidated Statements of Operations
for the three months ended June 30, 1997 and 1996 ......... 4
Condensed Consolidated Statements of Cash Flows
for the three months ended June 30, 1997 and 1996 ......... 5
Notes to Condensed Consolidated Financial
Statements ................................................ 6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............. 11-12
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable............................................. 12
PART II. OTHER INFORMATION ......................................... 13
SIGNATURES ............................................................. 14
2
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS: JUNE 30,1997 MARCH 31, 1997
- ------------ --------------
<S> <C> <C>
Current Assets:
Cash $ 33,638 $ 31,548
Accounts receivable, net 5,421,535 5,279,369
Inventories 630,937 665,335
Prepaid expenses and other current assets 114,167 191,323
---------- ----------
Total Current Assets 6,200,277 6,167,575
Revenue producing equipment, net 490,764 485,305
Fixed assets, net 1,639,903 1,659,056
Other assets 189,705 188,229
---------- ----------
Total Assets $8,520,649 $8,500,165
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current Liabilities:
Notes payable - revolving credit facility $2,436,817 $2,782,677
Notes payable - term loan 500,000 --
Notes payable - other 185,596 224,869
Accounts payable 2,003,507 1,801,120
Accrued expenses and other current liabilities 1,253,516 1,128,828
Current portion of capital lease - Facility 357,500 53,625
Current portion of other capital lease obligations 107,792 113,124
---------- ----------
Total Current Liabilities 6,844,728 6,104,243
Notes payable - term loan -- 500,000
Notes payable - other 121,454 101,031
Capital lease - Facility, less current portion -- 303,875
Other capital lease obligations, less current portion 96,927 69,637
----------- ----------
Total Liabilities 7,063,109 7,078,786
----------- -----------
Stockholders' Equity:
Preferred stock, $.01 par value; authorized 3,650,000
shares; no shares issued and outstanding -- --
6% Redeemable cumulative convertible preferred stock
$.01 par value; $2,713,500 liquidation preference, authorized,
issued and outstanding 1,350,000 shares 13,500 13,500
Common stock, $.01 par value; authorized 15,000,000
shares; issued 1,787,598 and 1,787,598 shares, respectively 17,876 17,876
Additional paid-in capital 6,168,364 6,168,364
Deficit (4,117,880) (4,154,041)
---------- ----------
2,081,860 2,045,699
Less treasury stock (308,004 shares) at cost 624,320 624,320
---------- -----------
Total Stockholders' Equity 1,457,540 1,421,379
---------- -----------
Total Liabilities and Stockholders' Equity $8,520,649 $8,500,165
========== ==========
See notes to condensed consolidated financial statements.
</TABLE>
3
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ACCUHEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED JUNE 30,
---------------------------
1997 1996
---- ----
Net sales $4,284,502 $3,927,372
Cost of goods sold 2,487,324 2,216,484
---------- ----------
Gross profit 1,797,178 1,710,888
Selling, general and administrative expenses 1,586,486 1,545,,400
Operating income 210,692 165,488
Interest expense 134,031 128,395
---------- ----------
Net income $ 76,661 $ 37,093
========== ==========
Net income per common share applicable to common
shareholders
Primary $ .02 $ .--
---------- ----------
Fully diluted $ .02 $ .--
---------- ----------
Weighted number of common shares and equivalents
outstanding
Primary 1,533,317 1,338,356
---------- ----------
Fully diluted 1,822,593 1,338,356
---------- ----------
4
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ACCUHEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
-------------------
1997 1996
---- ----
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 36,161 $ 37,093
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of financing costs 2,778 16,448
Depreciation and amortization 101,620 104,614
CHANGES IN OPERATING ASSETS AND LIABILITIES
Accounts receivable (142,166) 174,585
Inventories 34,398 (4,322)
Prepaid expenses and other assets 77,156 (2,987)
Other assets (4,254) (8,770)
Accounts payable 202,387 63
Accrued expenses and other current liabilities 124,688 (28,597)
----------- ---------
Cash provided by operating activities 432,768 188,127
----------- ---------
INVESTING ACTIVITIES
Purchase of fixed assets (87,926) (2,877)
----------- ---------
Cash (used in) provided by investing activities (87,926) (2,877)
----------- ---------
FINANCING ACTIVITIES
Proceeds from note payable - revolving credit facility 3,915,540 (25,907)
Proceeds from notes payable - other 50,169 (69,006)
Increase in capital lease obligations 73,135 --
Payments on note payable - revolving credit facility (4,261,400) --
Payments on notes payable - other (69,019) --
Principal payments on capital lease - Facility -- (17,875)
Payments on other capital lease obligations (51,177) (116,059)
----------- ---------
Cash used in financing activities (342,752) (177,033)
----------- ---------
Net increase (decrease) in cash 2,090 8,217
Cash at beginning of period 31,548 2,694
----------- ---------
Cash at end of period $ 33,638 $ 10,911
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 128,000 $ 115,000
=========== =========
NONCASH INVESTING AND FINANCING ACTIVITIES
Additions to capital leases $ 73,135 $ 10,820
=========== =========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Accuhealth, Inc. and its subsidiaries, all of which are wholly-owned (the
"Company"). Significant intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and principally with the instructions to Form 10-Q and
Article 10 of Regulation S-X. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the periods reported have been included. Operating results for
the three-month period ended June 30, 1997 may not be indicative of the results
for the full fiscal year.
These financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Form 10-K for the fiscal
year ended March 31, 1997 filed with the Securities and Exchange Commission. The
balance sheet at March 31, 1997 has been derived from the audited financial
statements at that date.
ACCOUNTS RECEIVABLE
Accounts receivable are principally due from third party payors, primarily
governmental agencies (Medicare and Medicaid), managed care organizations and
private insurance companies.
INVENTORIES
Inventories consist of over-the-counter and prescription drugs, infusion
products and supplies, and home health care equipment and supplies and are
priced at the lower of cost or market using the first-in, first-out ("FIFO")
method.
EARNINGS PER SHARE
For the quarters ended June 30, 1997 and 1996, primary income (loss) per share
has been calculated by dividing the net income (loss) applicable to common stock
by the weighted average of common stock and common stock equivalents outstanding
during the period. Dividends attributable to the redeemable preferred stock were
$40,500 and $39,366, respectively, for the three months ended June 30, 1997 and
1996. Net income (loss) applicable to common stockholders for the three months
ended June 30, 1997 and 1996, respectively were $36,161 and $(2,273). On a fully
diluted basis, both net income (loss) and shares outstanding, if applicable, are
adjusted to assume the conversion of convertible preferred stock from the date
of issue and for the incremental option shares for fully diluted purposes. (see
note 4). For the period ended June 30, 1997 the effect of converting the
convertible preferred stock was anti-dilutive and not included in the
calculation. For the three months ended June 30, 1996, both conversion of
preferred stock and incremental option shares were anti-dilutive and not
included in the calculation.
6
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ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
In February 1997 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128"), which is required to be adopted beginning with the quarter ended December
31, 1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options and warrants will be excluded. The Company does
not anticipate the adoption of SFAS 128 to have a significant impact on the
calculation of primary and fully diluted earnings per share.
INCOME TAXES
The Company files consolidated Federal, combined New York State and combined New
York City income tax returns. The Company's method of accounting for income
taxes is the liability method required by FASB Statement No. 109 "Accounting for
Income Taxes."
MAJOR CUSTOMER
The Company's revenues from one customer accounted for 17% and 11% of the
Company's net sales for the three months ended June 30, 1997 and 1996,
respectively. At June 30, 1997, this customer represented approximately 14% of
the Company's gross receivables.
NOTE 2 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
NOTES PAYABLE - OTHER
The Company's notes payable outstanding are as follows:
(A) The Company converted a portion of its accounts payable into a note
payable to a trade creditor in the principal amount aggregating
$46,949. This note is payable in monthly installments of approximately
$4,200 beginning October 11, 1996 which includes interest at 10.9% per
annum. The outstanding principal balance at June 30, 1997 was $20,336.
(B) The Company converted several of its capital leases into notes payable
to a trade creditor in principal amounts aggregating $276,830. These
notes are payable in monthly installments ranging from approximately
$2,000 to $8,000 with interest rates ranging from 10% to 14.5%. The
outstanding balance at June 30, 1997 was $237,875.
(C) In February 1997, the Company reached a settlement with the City of New
York relating to an audit of General Corporation and Commercial Rent
taxes for the years 1990 through 1992. In accordance with this
settlement agreement, the outstanding principal balance at June 30,
1997 of $69,175 is payable in monthly installments of $1,976 which
includes interest at 10% per annum. A final balloon payment of $18,146
is due on March 1, 2000.
7
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
NOTES PAYABLE - REVOLVING CREDIT FACILITY AND TERM LOAN
In April 1994, the Company entered into a Loan and Security Agreement (the
"Agreement") with Rosenthal and Rosenthal ("Rosenthal") to borrow, under certain
conditions and terms, up to $2,500,000 at an interest rate of prime plus 4-7/8%.
Borrowings under the Agreement are collateralized by certain assets of the
Company, including accounts receivables, inventories, equipment and fixtures.
The Company's ability to use this revolving credit facility is dependent upon
the level of its eligible receivables, as defined in the Agreement. In addition,
the Company granted Rosenthal warrants to purchase 70,000 shares of the
Company's common stock.
Effective February 1, 1996, the Company and Rosenthal amended the Loan and
Security Agreement (the "Amendment"). The Amendment extended the Agreement
through April 28, 1997 and allowed the Company to borrow, under certain
conditions and terms up to $3,500,000 (based on eligible accounts receivable, as
defined) at an interest rate of prime plus 3-7/8%. Effective February 1, 1997,
the Company and Rosenthal amended the Loan and Security Agreement ("Amendment
No. 2") to extend the Agreement through April 1, 1998 and reduce the interest
rate to prime (8 1/2% at March 31, 1997) plus 2 7/8%. In addition, the Company
granted Rosenthal warrants to purchase an additional 30,000 shares of the
Company's common stock Commencing April 28, 1996, the Company was required to
pay a facility fee of $35,000 per annum, which Amendment No. 2 has increased to
$40,000 per annum.
Amendment No. 2 also provided a $500,000 term loan to the Company due on April
1, 1998 with interest payable monthly at a rate of prime plus 5%.
The revolving credit facility and term loan bear interest at variable market
rates and as such the carrying value approximates their fair value.
CAPITAL LEASE OBLIGATIONS
The Company leases its principal offices and warehouse facility and certain
equipment, furniture and fixtures, rental equipment and leasehold improvements
under capital lease agreements which extend through April 2000.
CAPITAL LEASE - FACILITY
The Company occupies a pharmacy warehouse and office facility (the "Facility")
which was obtained under a ten-year lease (the "Lease Agreement") with the New
York City Industrial Development Agency (the "Agency") as lessor. The Agency
issued to National Westminster Bank, USA (now "Fleet") $1,072,500 principal
amount of its Industrial Development bonds (the "Bonds") pursuant to an
Indenture of Mortgage and Agreement dated April 1, 1989 (the "Indenture") which
created a lien on the facility. The Company also paid $227,500 in order for the
Agency to purchase
8
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
the warehouse. This amount and other acquisition costs are capitalized as land
and building under capital lease.
At the end of the term of the lease, the Company may purchase the Facility for
one dollar so long as all terms and conditions of the lease have been met. The
Lease Agreement and Guaranty Agreement require the Company and its subsidiaries
to comply with certain covenants, including but not limited to, maximum debt to
worth ratio, maximum allowable losses and debt service coverage ratio. The
Company's non-compliance with such covenants was waived by Fleet through April
1, 1998. Since the Company has not requested nor received from Fleet a waiver of
non-compliance with such covenants occurring after April 1, 1998, the entire
balance outstanding has been classified as current on the accompanying condensed
consolidated balance sheet at June 30, 1997.
In lieu of rent the Company pays principal on the Bonds in quarterly
installments of $17,875, plus interest at the rate of prime (8 1/4% at June 30,
1997) plus 1%. On April 28, 1994, in conjunction with the Rosenthal financing
the Company made an additional principal payment of $143,000. A final balloon
payment of $232,375 plus interest thereon is due on April 1, 1999. Each of the
Company's wholly-owned subsidiaries has guaranteed the Company's obligations
under the lease. The Lease Agreement and Guaranty Agreement also restrict the
payment of cash dividends in any one year to an aggregate amount not to exceed
25% of the Company's net income for the immediately preceding year.
OTHER CAPITAL LEASES
The Company leases durable medical equipment under capital lease agreements
which extend through March 31, 2000.
NOTE 3 - CONTINGENCIES
In June 1995, a former employee commenced an action against the Company and
certain of its former and current officers, directors and shareholders. The
action alleges that the Company breached plaintiff's employment agreement. On
June 18, 1996 the Court granted defendants' motion effectively dismissing the
Complaint as to the Company's current and former officers, directors and
shareholders and leaving plaintiff's claim for breach of contract and violation
of New York's Labor Law solely against the Company. The Company has now served
an Answer and a Document Request. The plaintiff has not proceeded with discovery
and the case is currently dormant. The Company intends to deny the principal
allegations in the Complaint and to defend this action vigorously.
An agency of New York State is conducting a review of the Company's Medicaid
reimbursement for the years 1990 through 1993. The Company has not been advised
as to whether any claim will be made.
Management believes that the above matters will be settled without any material
adverse financial impact to the Company's financial position, results of
operations or cash flows.
9
<PAGE>
ACCUHEALTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
NOTE 4 - 6% REDEEMABLE CUMULATIVE CONVERTIBLE PREFERRED STOCK
On December 14, 1994 and January 30, 1995, the Company completed the sale at
$2.00 per share of 1,325,000 shares of redeemable convertible preferred stock
("Preferred Stock") with a 6% per annum cumulative dividend. During the quarter
ended December 31, 1995, the Company sold at $2.50 per share 25,000 additional
shares of Preferred Stock to certain officers and directors of the Company. The
Preferred Stock is convertible at any time at the option of the holder, subject
to antidilution adjustments, into 1,350,000 shares of common stock. The Company
has reserved 1,350,000 shares of common stock for such conversion. At any time
on or after December 31, 1995, subject to certain conditions, such as the
registration of the underlying common stock under the Securities Act of 1933,
compliance with the terms of the Preferred Stock and any other agreement with
the holders of the Preferred Stock and the payment of all dividends that are
accrued and unpaid on the Preferred Stock as of the Redemption Date, the Company
may redeem all or any portion of the Preferred Stock then outstanding. For each
share that is called for redemption, the Company shall pay $3.00 per share from
December 31, 1995 through December 31, 1997 and $4.00 per share on or after
January 1, 1998. The holders of the Preferred Stock are entitled to voting
rights equivalent to that of the common stock. The Preferred Stock is senior to
the common stock in the event of a liquidation of the Company. The liquidation
preference is $2.00 per share plus accrued and unpaid dividends.
The Company is obligated to pay annual dividends of $.12 per share on its
1,350,000 outstanding shares of Preferred Stock. Such dividends accrue daily,
are payable each June 1 and December 1 and, at the election of the Company, may
be paid in shares of Common Stock valued in accordance with the terms of such
stock. Dividends on the Company's Preferred Stock are payable in preference and
priority to any payment of any dividends on the common stock.
The June 1, 1997 dividend will be paid out in 45,556 shares of common stock on
July 25, 1997. Accrued and unpaid dividends are included in accrued expenses and
other current liabilities at June 30, 1997.
NOTE 5. PROHEALTHCARE INFUSION SERVICES INC. ACQUISITION
Effective July 1, 1997 all of the conditions and requirements of the acquisition
had been satisfied. As a result, Accuhealth, Inc. completed the acquisition of
ProHealthCare Infusion Services, Inc. This represents the consummation of the
transaction that was conditionally agreed to and announced in March 1997.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This Management's Discussion and Analysis should be read in conjunction with the
condensed consolidated financial statements of the Company and related notes
included elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
- ---------------------
Net sales increased approximately $357,000 or 9% from the comparable 1996
quarter to $4.284 million for the three months ended June 30, 1997. The increase
was the result of an increase of approximately $362,000 and $210,000 in the
Company's institutional pharmacy and oral medication businesses, offset by a
decrease in the Company's infusion services revenues of approximately $209,000 .
Gross profit for the three months ended June 30, 1997 and 1996 was approximately
$1.80 and $1.71 million, respectively, representing approximately 42% and 44% of
net sales for the three months ended June 30, 1997 and June 30, 1996,
respectively.
Selling, general and administrative expenses ("SG &A") were approximately $1.58
and $1.55 million or approximately 37.3% and 39.3% of net sales for the three
months ended June 30, 1997 and 1996, respectively. The increase was principally
attributable to payroll and related expenses.
FINANCIAL CONDITION
- -------------------
The Company's cash provided by operating activities during the three months
ended June 30, 1997 was $432,768. As of June 30, 1997, the Company had a working
capital deficiency of $644,451 as compared to working capital of $63,332 at
March 31, 1997. As described in Note 2 of the financial statements, the entire
capital lease obligation for the Company's capital lease facility of $357,500
has been classified as a current liability at June 30, 1997. The Company's
working capital deficiency at June 30, 1997 would be approximately $345,000 if
the capital lease were not classified as a current liability on the June 1997
balance sheet.
Management has formulated certain planned actions to improve its working capital
position and generate sufficient cash to meet its operating needs. The plan
includes, among other matters, obtaining additional financing.
11
<PAGE>
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
- -----------------------------------------------
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward looking statements. Certain information in Items 1 and 2 of Part I
of this Form 10-Q include information that is forward looking, such as the
Company's plans to obtain additional financing. The matters referred to in
forward looking statements could be affected by the risks and uncertainties
involved in the Company's business. These risks and uncertainties include, but
are not limited to, the effect of economic and market conditions, the impact of
the cost containment efforts of third-party payors and the Company's ability to
obtain and maintain required licenses. Subsequent written and oral forward
looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by the cautionary statements in the
paragraph and elsewhere in this Form 10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default 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) Report on Form 8-K
The Company's current report on Form 8-K, date of report
July 2, 1997 and filed on July 16, 1997, reporting on Item
1 Note 5 to condensed consolidated financial statements.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ACCUHEALTH, INC.
Date: August 13, 1997 By: /s/ GLENN C. DAVIS
-----------------
Glenn C. Davis, as
President and Chief Executive Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000840401
<NAME> ACCUHEALTH, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 33,638
<SECURITIES> 0
<RECEIVABLES> 6,259,831
<ALLOWANCES> (838,296)
<INVENTORY> 630,937
<CURRENT-ASSETS> 6,200,277
<PP&E> 4,671,417
<DEPRECIATION> (2,540,750)
<TOTAL-ASSETS> 8,520,649
<CURRENT-LIABILITIES> 6,844,728
<BONDS> 0
0
13,500
<COMMON> 17,876
<OTHER-SE> 6,168,364
<TOTAL-LIABILITY-AND-EQUITY> 8,520,649
<SALES> 4,284,502
<TOTAL-REVENUES> 4,284,502
<CGS> 2,487,324
<TOTAL-COSTS> 2,487,324
<OTHER-EXPENSES> 1,586,486
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 134,031
<INCOME-PRETAX> 76,661
<INCOME-TAX> 0
<INCOME-CONTINUING> 76,661
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,661
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
