U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 33-27610-A
MEDICAL TECHNOLOGY & INNOVATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Florida 65-2954561
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
615 Centerville Road, Lancaster, PA 17601
(Address of principal executive offices) (Zip Code)
(717) 892-6770
(Issuer'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 past 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[ ]
As of December 31, 1998 27,110,279 shares of Common Stock, no par value, of
the registrant were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's annual report filed with the Securities and
Exchange Commission on Form 10-KSB, filed November 6, 1998.
<PAGE>
<TABLE>
MEDICAL TECHNOLOGY & INNOVATIONS, INC.
TABLE OF CONTENTS
<CAPTION>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
December 31, 1998 and June 30, 1998 4
Condensed Consolidated Income Statements
For the Three and Six Months ended
December 31, 1998 and 1997 (Unaudited) 5
Consolidated Statements of Stockholders'
Equity (Unaudited) 6
Condensed Consolidated Statements of Cash Flows
For the Six Months ended December 31, 1998
and 1997 (Unaudited) 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis or Plan of
Operation
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 14
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
<PAGE>
<TABLE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Balance Sheets
December 31 and June 30, 1998
<CAPTION>
Assets
December 31, 1998
(Unaudited) June 30, 1998
---------------- -------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 168,268 $ 38,247
Accounts Receivable, less allowances
of $36,367, respectively 519,046 287,114
Inventory 436,122 393,148
Prepaid Expenses 62,767 30,740
--------- -------
Total Current Assets 1,186,203 749,249
--------- -------
Fixed Assets
Land 182,000 382,000
Equipment, less accumulated
depreciation of $426,183
and $364,567, respectively 741,311 829,537
--------- --------
Fixed Assets, net 923,311 1,211,537
Other Assets
Intangible and Other Assets 2,233,676 2,345,530
---------- ---------
Total Assets $4,343,190 $4,306,316
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $506,195 $505,824
Accrued Liabilities 436,648 370,558
Current Maturities of Long-Term Debt 1,155,211 1,035,872
--------- ---------
Total Current Liabilities 2,098,054 1,912,254
Long-Term Debt,
Net of Current Maturities 511,361 1,117,545
------- ---------
Total Liabilities 2,609,415 3,029,799
--------- ---------
Stockholders' Common Stock, no par value, authorized
Equity 700,000,000 shares, outstanding 27,110,279
and 26,385,279 shares, respectively 10,008,933 9,632,183
Series A Convertible Preferred Stock, $100
par value, authorized 70,000 shares,
outstanding nil -0- -0-
Series B Convertible Preferred Stock,
$100 par value, authorized 1000 shares,
267 shares outstanding 1,602,000 1,602,000
Preferred Stock, authorized 100,000,000
shares $1,000 par value, 12%,
noncumulative, outstanding 22. shares 22,500 22,500
Treasury Stock, at cost (309,742) (309,742)
Accumulated Deficit (9,589,916) (9,670,424)
----------- -----------
Total Stockholders' Equity 1,733,775 1,276,517
------------ -----------
Total Liabilities and Stockholders' Equity $4,343,190 $4,306,316
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed
financial statements.
<PAGE>
<TABLE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Income Statements
For the Three Months and Six Months
Ended December 31, 1998 and 1997 (Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $1,819,628 $1,425,376 $3,172,082 $2,410,000
Cost of Goods Sold 900,654 908,102 1,709,780 1,650,173
---------- --------- --------- -----------
Gross Profit 918,974 517,274 1,462,302 759,827
---------- --------- --------- -----------
Operating Expenses
Advertising 11,095 33,680 16,163 70,746
Selling, General,
and Administrative 716,572 612,175 1,279,324 1,253,870
---------- ------- --------- ----------
Total Operating Expenses 727,667 645,855 1,295,487 1,324,616
---------- -------- --------- ----------
Income (Loss) from Operations 191,307 (128,581) 166,815 (564,789)
Interest expense, net 49,339 75,908 86,307 125,316
---------- -------- --------- ----------
Net Income (Loss) from Operations $141,968 ($204,489) $80,508 ($690,105)
========== ======== ========= ==========
Add: Gain on Restructuring of Series A - 0 - 948,163 - 0 - 948,163
Preferred Stock ---------- -------- --------- ----------
Net Income Attributable to $141,968 $743,674 $80,508 $258,058
Common Stock ========== ======== ========= =========
Net Operating Income
(Loss) per common share $.004(*) ($.011) $.001(*) ($.039)
(basic and diluted) ========== ======== ========= =========
Net Income per common share after $.004 $.042 $.001 $.014
Gain on Restructuring of Series A ========== ======== ========= =========
Preferred Stock
Weighted Average Outstanding Shares 26,435,089 17,843,521 26,435,089 17,843,521
=========== ========== ========== ===========
</TABLE>
(*) Calculated including Series B Preferred Stock accretion of $32,040 for the
three months and $64,080 for the six months ended December 31, 1998
The accompanying notes are an integral part of the condensed
financial statements.
<PAGE>
<TABLE>
Medical Technology & Innovations, Inc.
Consolidated Statements of Stockholders' Equity (Unaudited)
For the Years Ended
<CAPTION>
Series A Series B
Convertible Convertible Total
Common Common Preferred Preferred Preferred Treasury Accumulate Stockholders'
Shares Stock Stock Stock Stock Stock Deficit Equity
-------- ------- --------- --------- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1996 12,147,299 $4,147,140 $56,000 ($250,000) ($4,675,501) ($722,361)
Sale of 70,000 Series A
Convertible Preferred Stock,
Net of issuance costs $6,220,700 6,220,700
Conversions of Preferred Stock
Into Common Stock 3,697,576 1,846,390 (1,812,890) (33,500)
Exercise of Stock Options 194,737 292,105 292,105
Issuance of Common Stock 532,898 270,250 270,250
Stock Issued for Services 215,000 199,375 199,375
Purchase of Treasury Shares (56,781) (59,742) (59,742)
Net Loss (3,507,559) (3,507,559)
---------- ---------- --------- ------- --------- ------------ -----------
Balance at June 30, 1997 16,730,729 $6,755,260 $4,407,810 $22,500 ($309,742) ($8,183,060) $2,692,768
Net Loss (1,487,364) (1,487,364)
Issuance of Common Stock 144,509 25,000 25,000
Stock Issued for Services 1,156,864 296,113 296,113
Conversion of Series A
Preferred Stock
into common stock 7,853,177 1,531,647 (1,531,647)
Conversion of
subscribed Series A 500,000 76,000 (76,000)
Preferred Stock into common
stock, Gain on Restructuring
of Series A Preferred Stock 948,163 (1,198,163) (250,000)
Issuance of Series B Preferred
exchange for Series A Preferred (1,602,000) 1,602,000
Balance at June 30, 1998 26,385,279 $9,632,183 0 $1,602,000 $22,500 ($309,742) ($9,670,424) $1,276,517
Net Income 80,508 80,508
Conversion of Subordinated
Notes into common stock 725,000 376,750 376,750
--------- ---------- ---------- ---------- ------- --------- ----------- ----------
Balance at Dec 31, 1998 27,110,279 $10,008,933 0 $1,602,000 $22,500 ($309,742) ($9,589,916) $1,733,775
</TABLE>
The accompanying notes are an integral part of the condensed
financial statements.
<PAGE>
<TABLE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended December 31, 1998 and 1997
<CAPTION>
Six Months Ended December 31,
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Income (Loss) $80,508 ($690,105)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and Amortization 140,080 180,135
(Increase) in Accounts Receivable (231,932) (133,166)
(Increase) Decrease in Inventory (42,974) 70,726
(Increase) Decrease in Prepaid Expenses (32,027) 8,167
Increase in Accounts Payable 369 149,929
Increase in Accrued Liabilities 66,092 232,404
--------- ----------
Net cash (used in) operating activities (19,884) (181,910)
Cash flows from investing activities:
Sale of Headquarters Land and Building 260,000 - 0 -
Purchase of Fixed Assets - 0 - (4,590)
Net cash from (used in) investing activities 260,000 (4,590)
Cash flows from financing activities:
Costs incurred for restructuring of
Series A Preferred Stock - 0 - (275,900)
Proceeds from issuance of stock, net - 0 - 25,000
Proceeds from issuance of notes payable 123,905 730,729
Repayment of notes payable, net (234,000) (154,496)
--------- ---------
Net cash from (used in) financing activities (110,095) 325,333
Net increase in cash and cash equivalents 130,021 138,833
Cash and cash equivalents at beginning of period 38,247 58,090
--------- -------
Cash and cash equivalents at end of period $168,268 $196,923
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed
financial statements.
<PAGE>
Medical Technology & Innovations, Inc.
Notes to Condensed Consolidated Financial Statements
1. Condensed Financial Statements. The unaudited condensed
consolidated financial information contained in this report reflects
all adjustments (consisting of normal recurring accruals) considered
necessary, in the opinion of management, for a fair presentation of
results for the interim periods presented. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's June 30, 1998 Annual Report on Form
10-KSB. The results of operations for periods ended December 31 are
not necessarily indicative of operations for the full year.
2. Stock Option Plans. In October of 1995 officers of the Company were
granted options to acquire up to 2.0 million shares of common stock
at an exercise price of $1.50 per share. The options are exercisable
ratably over a three year period commencing with the quarter ending
June 30, 1996.
In April of 1996 the Company's shareholders approved the 1996 Stock
Option Plan, which allows the board of directors to grant up to 3.0
million options. During fiscal 1997 and fiscal 1998, 1,250,000 and
500,000 options respectively, have been granted.
In September of 1997, the Board of Directors reduced the exercise
price on all options granted to the Chief Executive Officer,
President and Executive Vice President of the Company to $.25.
The following is a summary of stock option transactions:
Outstanding, July 1, 1998 3,239,936
Options granted 0
Options exercised 0
Options cancelled (184,269)
Outstanding, December 31, 1998 3,055,667
=========
Exercisable, end of period 2,245,667
3. Preferred Stock. The Company has three classes of preferred stock. The
convertiblevalue preferred stock is convertible into 14,985 shares of the
Company's common stock.
The Series A convertible preferred stock was convertible into
approximately 30 million shares of the Company's common stock as of
September 30, 1997. The Series A preferred stock conversion rate was
the lower of the approximate market rate or $2.72.
During September of 1997, the Company renegotiated terms with the
Series A Preferred Shareholders and as a result, Series A Preferred
Shares were exchanged for a combination of cash, common stock, a new
Series B Preferred stock and an amended warrant certificate with an
exercise price of $1.00 per share in cash. Series A Preferred
shareholders owning 217 outstanding shares elected to receive $3,800
in cash in exchange for their Series A Preferred shares with a face
value of $10,000. The Series A Preferred shares were eventually
converted into 5,425,000 of the Company's Common Stock. Over 60% of
the parties who ultimately purchased the Series A Preferred shares
and converted them into common shares of the Company agreed not to
sell any common shares before April 1, 1998
<PAGE>
and limit sales to 8% of the amount purchased per month thereafter
with no limit on salability once 360 days have lapsed since the
closing. Series A Preferred shareholders owning 267 outstanding
shares agreed to exchange their Series A Preferred shares for a new
Series B Preferred share with a $100 par value, a face value of
$6000 with accretion at 8% from October 1, 1997 plus 10,000 shares
of the Company's common stock. The new Series B Preferred stock is
convertible into common stock beginning October 1, 1998 at a fixed
conversion price of $1.00 per share. Conversion is limited to 10%
per month of the shares held until February 28, 1999 and 20% per
month thereafter. The conversion feature doubles provided the
Company's common stock closing bid price for ten consecutive days is
greater than $2.00 per share.
The Company has the option of redeeming the Series B Preferred
shares at any time in cash, at 110% of the original face value of
the Series B Preferred shares including accretion, or in the
Company's common stock valued at the average closing bid price for
the 30 days prior to the redemption at 120% of the original face
value of the Series B Preferred shares including accretion. The
Company is required to redeem the Series B Preferred stock on
September 30, 2000. The common stock issued to Series B Preferred
shareholders is subject to the following lockup schedule:
Maximum
Date Tradeable
December 1, 1997 250 shares
January 1, 1998 750 shares
February 1, 1998 1,500 shares
April 1, 1998 2,500 shares
July 1, 1998 5,500 shares
October 1, 1998 10,000 shares
As a result of the restructuring of the Series A Preferred Stock,
the common stock holders have received a gain of approximately
$948,000 at December 31, 1997.
1. Warrants. The Company has issued warrants to purchase 3.0 million
shares of common stock as of December 31, 1998. The warrants relate
to grants made in connection with an equity issuance and various
services rendered. The warrants can be exercised at prices ranging
from $.25 to $2.72 per share. 2.4 million warrants expire in July
2001. Pursuant to terms renegotiated in September of 1997 between
the Company and holders of Series A Preferred Shares issued in July
of 1996, the exercise price of approximately 1.8 million warrants
will be reduced from $2.72 to $1.00.
Item 2. Management's Discussion and Analysis or Plan of Operation
This analysis should be read in conjunction with the condensed consolidated
financial statements, the notes thereto, and the financial statements and notes
thereto included in the Company's June 30, 1998 Annual Report on Form 10-KSB.
All nonhistorical information contained in this Form 10-QSB is a forward-looking
statement. The forward looking statements contained herein are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward looking statements. Factors that
might cause such differences include, but are not limited to the following, a
slower acceptance of the MTI PhotoscreenerTM in the marketplace, increased
foreign competition putting pricing pressures on Steridyne products, changes in
economic trends and other unforeseen situations or developments. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof.
<PAGE>
Results of Operations
Comparison of Six Month Periods Ended December 31, 1998 and 1997
Revenues for the first half of fiscal 1999 increased by $762,082, from
$2,410,000 in fiscal 1998 to $3,172,082 in fiscal 1999, a 32% increase. This
sales increase results from increased demand for the MTI PhotoScreener (TM)
from retail optical chains, service clubs and schools combined with good growth
in the core Steridyne business. Gross profit for the first half of fiscal 1998
increased by 92% to $1,462,302 versus the comparable period in fiscal 1999
almost entirely due to sales of the MTI PhotoScreener(TM). MTI products
generally have higher profit margins than Steridyne products.
Operating expenses decreased by 2% from $1,324,616 in the first half of fiscal
1998 to $1,295,487 in the comparable period in fiscal 1999. Income from
operations for the six months ended December 31, 1998 was $166,815 compared to a
loss of ($564,789) in the comparable period in the prior fiscal year. This
dramatic improvement of $731,604 in operating income results from continued
increases in sales of the MTI PhotoScreener(TM) to retail optical chains in the
U.S. and international markets and marks the first time the Company has achieved
a profitable quarter. Interest expense decreased 31% to $86,307 for the first
six months of fiscal 1999 versus 1998 primarily as the result of the sale of the
headquarters building and subsequent mortgage payoff and the conversion of
$376,750 of convertible notes into common stock in July of 1998.
Management expects a profit for the third quarter of fiscal 1999 because of
increased sales and continued cost controls.
Liquidity and Capital Resources
At December 31, 1998, the Company had cash of $168,268 and working capital of
($911,851) as compared to $38,247 and ($1,163,005) at June 30, 1998. This
decrease in working capital deficit is mostly due to increased profitability of
the Company in fiscal 1999. Included in current maturities of long term debt at
December 31 and June 30, 1998 is approximately $800,000 of secured notes
incurred to fund the Series A restructuring which are repayable or convertible
into Company Common Stock in March of 1999.
In September of 1997 the Company reached an agreement with the holders of the
Series A Preferred shares issued in July of 1996 to amend certain terms and
conditions of the issue subject to the Company completing the required
financing. All Series A Preferred shareholders were given the choice of electing
("Option 1") a cash payment of $3,800 per share or ("Option 2") 10,000 shares of
the Company's common stock and a new Series B Preferred share with a $6,000 face
in exchange for 1 share of the original Series A Preferred. All Series A
Preferred shareholders will also have the exercise price reduced on all warrants
applicable to tendered Series A Preferred Shares from $2.72 to $1.00. The new
Series B Preferred Stock is convertible into common stock of the Company from
October 1, 1998 at a fixed price of $1.00. Conversion is limited to 10% of the
holding for the first four months following October 1, 1998 then it is increased
to 20% per month thereafter. The Series B Preferred stock can be redeemed by the
Company at any time in cash at 110% of the face value or in common stock at 120%
of the face value, with mandatory redemption required by September 30, 2000.
Over 60% of the parties who purchased the Series A Preferred shares and
converted them into shares of the Company's common stock agreed to a lock-up
which limited sales to 8% of the amount purchased per month with no limit on
salability after October 1, 1998. Common stock issued to Series A Preferred
Stockholders electing Option 2 was subject to a lock-up which ended on October
1, 1998.
In connection with securing financing for Option 1 of the Series A Preferred
restructuring, the Company raised an additional $719,000 for general working
<PAGE>
capital purposes. The Company recruited new senior management who instituted
significant reductions in employees, inventory management programs and cutbacks
in operating expenses in all parts of the business. Management also broadened
its sales and marketing emphasis to target large retailers and national public
service organizations rather than individual healthcare professionals.
Management believes these actions will improve operating performance and cash
flow in the near term.
In August of 1998, the Company received its largest order ever to deliver
approximately 700 PhotoScreeners during fiscal 1999. As of December 31, 1998
substantially all of the MTI PhotoScreeners ordered were billed. The order which
approximates $1.5 million places certain restrictions on the Company from
selling the PhotoScreener in certain markets. In connection with this order and
provided the customer spends several millions of dollars in national advertising
mentioning the PhotoScreener, the Company has provided the customer with
warrants to purchase 1.2 million shares of the Company's stock at an exercise
price of $0.88 per share.
The Chief Executive Officer and a former director personally signed a guarantee
with a local bank to provide a $250,000 line of credit to the Company which
terminates in January of 1999.
For the past several years the Company has financed its operations primarily
through private sales of securities and revenues from the sale of its products.
Since June of 1993 the Company has received net proceeds of approximately $10.0
million from the private sale of securities and debt. The Company may raise
additional capital through private and/or public sales of securities in the
future.
Year 2000 Compliance
The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium (Year 2000) approaches. All software
used for the Company systems is supplied by software vendors or outside service
providers. The Company has confirmed with such providers that its present
software is Year 2000 compliant.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a)
Exhibits:
3.1 Amendment to the Articles of Incorporation for SouthStar Productions, Inc.,
which changed its name to Medical Technology & Innovations, Inc.
[Incorporated by reference to the Company's Current Report on Form 8-K for
an event on September 21, 1995]
3.2 Restated Articles of Incorporation for Medical Technology & Innovations,
Inc.[Incorporated by reference to Exhibit 3.3 to the Company's Annual
Report on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]
3.3 By-laws [Incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-18 (File No. 33-27610-A), filed March 17,
1989]
10.1 Share Exchange Plan between SouthStar Productions, Inc. and Medical
Technology, Inc. [Incorporated by reference to the Company's Current Report
on Form 8-K for an event on August 21, 1995]
10.2 Asset purchase agreement for the purchase and sale of certain assets of
Steridyne Corporation [Incorporated by reference to the Company's Current
Report on Form 8-K for an event on July 31, 1996]
10.3 Medical Technology & Innovations, Inc. 1996 Stock Option Plan.
[Incorporated by reference to Exhibit 10.3 to the Company's Annual Report
on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]
10.4 SouthStar Productions, Inc. Stock Purchase Plan 1995a (Financial Public
Relations Consulting Agreement) [Incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-8 (File No. 33- 27610-A),
filed August 23, 1995]
10.5 Medical Technology & Innovations, Inc. 1996b Stock Purchase Plan
(Consulting Agreement) [Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (File No. 33-27610-A), filed
April 22, 1996]
10.6 Form of Employment Agreement, Covenant not to Compete, and Stock Option
Agreement between the Company and key employees. [Incorporated by reference
to Exhibit 10.6 to the Company's Annual Report on Form 10-KSB (File No.
33-27610-A), filed September 30, 1996]
<PAGE>
10.7 Purchase Agreement dated January 31, 1996 between the Company and Glenn and
Ruth Schultz. [Incorporated by reference to Exhibit 10.7 to the Company's
Annual Report on Form 10-KSB (File No. 33- 27610-A), filed September 30,
1996]
16.1 Letter on change in certifying accountant [Incorporated by reference to the
Company's Current Report on Form 8-K for an event on April 26, 1996]
21.0 Subsidiaries of the Company.
Medical Technology, Inc., an Iowa corporation
Steridyne Corporation, a Florida corporation
27.1 Financial Data Schedules
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarterly period covered by
this report.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AND
BY: /s/ Dennis A. Surovcik
Dennis A. Surovcik, Senior Vice President
Chief Financial Officer, Secretary
BY: /s/ Jeremy P. Feakins
Jeremy P. Feakins, Chairman and
Chief Executive Officer
[GRAPHIC OMITTED]
Date: February 10, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000847464
<NAME> Medical Technology & Innovations, Inc.
<S> <C>
<PERIOD-TYPE> 4-Mos
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Oct-1-1998
<PERIOD-END> Dec-31-1998
<CASH> 168,268
<SECURITIES> 0
<RECEIVABLES> 519,046
<ALLOWANCES> 36,367
<INVENTORY> 436,122
<CURRENT-ASSETS> 1,186,203
<PP&E> 1,349,494
<DEPRECIATION> 426,183
<TOTAL-ASSETS> 4,343,190
<CURRENT-LIABILITIES> 2,098,054
<BONDS> 0
0
1,624,500
<COMMON> 10,008,933
<OTHER-SE> (309,742)
<TOTAL-LIABILITY-AND-EQUITY> 4,343,190
<SALES> 3,172,082
<TOTAL-REVENUES> 3,172,082
<CGS> 1,709,780
<TOTAL-COSTS> 1,295,487
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86,307
<INCOME-PRETAX> 80,508
<INCOME-TAX> 0
<INCOME-CONTINUING> 80,508
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,508
<EPS-PRIMARY> .001
<EPS-DILUTED> .001
</TABLE>
