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 September 30, 1999
[ ] 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 September 30, 1999 27,936,334 shares of Common Stock, no par value, of the
registrant were outstanding.
Transitional Small Business Disclosure Format (Check One): YES [ ] NO [X]
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's annual report filed with the Securities and
Exchange Commission on Form 10-KSB, filed December 16, 1999.
<PAGE>
MEDICAL TECHNOLOGY & INNOVATIONS, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
September 30, 1999 (Unaudited) and June 30, 1999 F-1
Condensed Consolidated Income Statements
For the Three Months ended September 30, 1999 and 1998 (Unaudited) F-2
Consolidated Statements of Stockholders' Equity (Unaudited) F-3
Condensed Consolidated Statements of Cash Flows
For the Three Months ended September 30, 1999 and 1998 (Unaudited) F-4
Notes to Condensed Consolidated Financial Statements F-5
Item 2. Management's Discussion and Analysis or
Plan of Operation 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
<PAGE>
<TABLE>
<CAPTION>
Medical Technology & Innovations, Inc.
Condensed Consolidated Balance Sheets
September 30, 1999 and June 30, 1999
Assets
September 30, 1999 June 30,
(Unaudited) 1999
---------------- --------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 119,821 $ 90,581
Accounts Receivable, less allowances of
$21,174, respectively 528,808 438,207
Inventory 475,124 513,358
Prepaid Expenses 21,125 91,002
---------------- --------------
Total Current Assets 1,144,878 1,133,148
---------------- --------------
Fixed Assets
Land 182,000 182,000
Equipment, less accumulated depreciation
of $529,287 and $494,006, respectively 633,879 669,160
---------------- --------------
Fixed Assets, net 815,879 851,160
Other Assets
Intangible and Other Assets 2,078,228 2,134,155
---------------- --------------
Total Assets $ 4,038,985 $ 4,118,463
---------------- --------------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 796,270 $ 908,139
Accrued Liabilities
Payroll and payroll taxes 203,080 118,553
Royalties 219,412 122,405
Other 140,902 181,630
Current Maturities of Long-Term Debt 426,836 415,836
------- -------------
Total Current Liabilities 1,786,500 1,746,563
--------- -------------
Long-Term Debt, Net of Current Maturities 1,329,216 1,321,158
--------- -------------
Total Liabilities 3,115,716 3,067,721
--------- -------------
Stockholders' Equity
Common Stock, no par value, authorized
700,000,000 shares, outstanding 27,936,334
and 27,548,334 shares, respectively 10,235,122 10,190,092
Series B Convertible Preferred Stock,
$100 par value, authorized 1000 shares,
266 shares outstanding 1,596,000 1,596,000
Preferred Stock, authorized 100,000,000 shares
$1,000 par value, 12%, noncumulative,
Outstanding 22.5 shares 22,500 22,500
Treasury Stock, at cost (1,973,531 shares) (436,799) (436,799)
Accumulated Deficit (10,493,554) (10,321,051)
------------ ------------
Total Stockholders' Equity 923,269 1,050,742
------------ -----------
Total Liabilities and Stockholders' Equity $ 4,038,985 $ 4,118,463
============ ============
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
Medical Technology & Innovations, Inc.
Condensed Consolidated Income Statements
For the Three Months Ended September 30, 1999 and 1998 (Unaudited)
Three Months Ended
September 30,
1999 1998
----------- -----------
<S> <C> <C>
Revenues $1,055,279 $1,352,454
Cost of Goods Sold 669,756 809,126
----------- -----------
Gross Profit 385,523 543,328
----------- ------------
Operating Expenses
Advertising 2,144 5,068
Selling, General,
and Administrative 516,971 562,752
---------- ------------
Total Operating Expenses 519,115 567,820
---------- ------------
(Loss) from Operations (133,592) (24,492)
Interest expense, net 38,911 36,968
----------- ------------
Net (Loss) from Operations ($172,503) ($61,460)
=========== ===========
Net (Loss) per common share (basic and diluted) ($.008)(*) ($.004)(*)
=========== ===========
Weighted Average Outstanding Shares 27,220,949 25,574,423
========== ===========
</TABLE>
(*) Calculated including Series B Preferred Stock accretion of $32,040 for each
period.
The accompanying notes are an integral part
of the condensed financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
Medical Technology & Innovations, Inc.
Consolidated Statements of Stockholders' Equity
For the Years Ended
Series A Series B Total
Convertible Convertible Stock-
ommon Common Preferred Preferred Preferred Treasury Accumulated holders'
hares Stock Stock Stock Stock Stock Deficit Equity
---------- ----------- ------------ ----------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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 Preferred Stock into
common stock 500,000 76,000 (76,000)
Gain on Restructuring of
Series A Preferred Stock 948,163 (1,198,163) (250,000)
Issuance of Series B Preferred
In exchange for Series A (1,602,000) 1,602,000
Preferred ---------- ----------- ----------- ------------ -------- ---------- ------------ ------------
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
---------- ----------- ----------- ------------ -------- ---------- ------------ ------------
Purchase of Treasury Shares (600,000) (127,057) (127,057)
Net Loss (650,627) (650,627)
Stock Issued for Services 983,974 172,409 172,409
Conversion of Series B
Preferred 54,081 6,000 (6,000)
Stock into common stock
Conversion of Subordinated
Notes into common stock 725,000 379,500 379,500
---------- ----------- ----------- ----------- --------- ---------- ------------- -----------
Balance at June 30, 1999 27,548,334 $10,190,092 - 0 - $1,596,000 $22,500 $(436,799) $(10,321,051) $ 1,050,742
---------- ----------- ----------- ----------- --------- ---------- ------------- -----------
Stock Issued for Services 388,000 45,030 45,030
Net Loss (172,503) (172,503)
---------- ----------- ----------- ---------- --------- ---------- ------------ -----------
Balance at September 30, 27,936,334 $10,235,122 - 0 - $1,596,000 $22,500 $(436,799) $(10,493,554) $ 923,269
1999 ========== ========== ========= ========== ========= ========= ============ =========
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended September 30, 1999 and 1998
Three Months Ended September 30,
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(172,503) $(61,460)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and Amortization 91,209 72,483
(Increase) in Accounts Receivable (90,601) (146,615)
Decrease in Inventory 38,234 3,673
Decrease (Increase) in Prepaid Expenses 69,877 (27,495)
(Decrease) in Accounts Payable (111,867) (116,163)
Increase in Accrued Liabilities 140,803 128,151
Stock issued for services 45,030 - 0 -
----------- ----------
Net cash used in operating activities 10,182 (147,426)
----------- ----------
Cash flows from investing activities:
Sale of Headquarters Land and Building - 0 - 260,000
----------- ----------
Net cash from investing activities - 0 - 260,000
----------- ---------
Cash flows from financing activities:
Proceeds from issuance of notes payable 23,467 104,787
Repayment of notes payable, net (4,409) (234,000)
----------- ----------
Net cash from (used in) financing activities 19,058 (129,213)
----------- ----------
Net increase (Decrease) in cash and
cash equivalents 29,240 (16,639)
Cash and cash equivalents at beginning of period 90,581 38,247
----------- --------
Cash and cash equivalents at end of period $ 119,821 $ 21,608
========== =======
</TABLE>
The accompanying notes are an integral part
of the condensed financial statements.
F-4
<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, 1999 Annual
Report on Form 10- KSB. The results of operations for periods ended
September 30 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 1999 and fiscal 1998, 120,000 and 500,000 options
respectively, have been granted. All options granted in fiscal 1998 and
20,000 options granted in fiscal 1999 are exercisable ratably over a
three-year period commencing with the grant date at an exercise price of
$.25 per share. The remaining options granted in fiscal 1999 were
exercisable immediately at an exercise price of $.50 per share.
In September of 1997 and February of 1998, the Board of Directors reduced
the exercise price on all options granted to Company Executives to $.25.
The following is a summary of stock option transactions:
Outstanding, July 1, 1999 1,380,000
Options granted 0
Options exercised 0
Options cancelled (141,668)
Outstanding, September 30, 1999 1,238,332
Exercisable, end of period 1,101,665
The proforma disclosures required by SFAS 123 "Accounting for Stock-based
Compensation", is not applicable due to immateriality.
3. PREFERRED STOCK. The Company has three classes of preferred stock. The
$1,000 par value convertible 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.
F-5
<PAGE>
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. Accretion as of September 30, 1999
and June 30, 1999 was $256,320 and $224,280, respectively and is not
reflected in the Company's balance sheets.
4. WARRANTS. The Company has issued warrants to purchase approximately 3.6
million shares of common stock as of September 30, 1999. 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
$1.00 to $2.72 per share. Approximately 3.0 million warrants expire in July
2001.
5. INDUSTRY SEGMENTS. Statements of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information",
requires the presentation of description information about reportable
segments which is consistent with that made available to the management of
the Company to assess performance. Since the Company subsidiaries operate
in separate distinct industry segments, management of the overall business
is conducted by separate subsidiaries. The Corporate segment includes
salary and fringe benefits of the Chairman and a portion of similar costs
related to the Chief Financial Officer, financial public relations costs
and other costs not directly related to the operations of the business
segments.
<TABLE>
<CAPTION>
Quarter ended September 30, 1999 Medical Steridyne Corporate Total
Technology, Inc. Corporation
---------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 58,893 $ 996,386 - 0 - $1,055,279
Operating Income (Loss) (62,174) 12,163 (83,581) (133,592)
Net Interest 15,090 23,821 - 0 - 38,911
Pre Tax (Loss) (77,264) (11,658) (83,581) (172,503)
Net (Loss) (77,264) (11,658) (83,581) (172,503)
Depreciation and amortization 11,554 79,655 - 0 - 91,209
Quarter ended September 30, 1998 Medical Steridyne Corporate Total
Technology, Inc. Corporation
----------------- ------------ ---------- ----------
Revenues $ 531,671 $ 820,783 - 0 - $1,352,454
Operating Income (Loss) 137,896 (54,720) (107,668) (24,492)
Net Interest 9,349 18,363 9,256 36,968
Pre Tax Income (Loss) 128,547 (73,083) (116,924) (61,460)
Net Income (Loss) 128,547 (73,083) (116,924) (61,460)
Depreciation and amortization 11,718 60,765 - 0 - 72,483
</TABLE>
F-6
<PAGE>
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, 1999 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 PhotoScreener 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.
Results of Operations
Comparison of Three-Month Periods Ended September 30, 1999 and 1998
Revenues for the first quarter of fiscal 2000 were $1,055,279 compared to
$1,352,454 for the comparable period in fiscal 1999, or a decrease in sales of
$297,175 or 22%. This decline results because the Company shipped over $400,000
of PhotoScreeners and accessories to a major national retail optical chain in
the first quarter of fiscal 1999 with no comparable sales occurring in fiscal
2000. The Company shipped approximately $1.5 million of product to this customer
throughout fiscal 1999. Revenues from sales of temperature taking devices for
the first quarter of fiscal 2000 were up over 20% when compared to the
comparable quarter of fiscal 1999, mainly due to increased sales to retail
accounts. Gross profit for the first quarter of fiscal 2000 of $385,523
represents a decrease of 29% versus the comparable period in fiscal 1999 and is
mostly due to the shortfall in sales of the PhotoScreener as overall margins are
comparable between the two periods.
Operating expenses decreased by about 9% from $567,820 in the first three months
of fiscal 1999 to $519,115 in the comparable period in fiscal 2000. This
reduction is evident in most expense categories with the greatest savings in the
employment areas. Interest expense of $38,911 for the first three months of
fiscal 2000 was about even when you compare it to the first quarter of fiscal
1999, as debt levels on an overall basis were constant. The overall net loss for
the first three months of fiscal 2000 and 1999 was $172,503 and $61,460,
respectively. This result is again evident due to the difference in sales of the
PhotoScreener between the two periods.
Management is in the process of consolidating all of its operations into a
single location and cutting back on administrative staff in line with present
sales levels. The reorganization should be substantially completed by the end of
the second quarter of fiscal 2000. Management believes that actions presently
being taken to revise the Company's operating and financial requirements will
provide the opportunity for the Company to realize a cash profit.
Information about the Company's Industry Segments is included in Note 5 to the
Notes to Condensed Consolidated Financial Statements.
8
<PAGE>
Liquidity and Capital Resources
At September 30, 1999, the Company had cash of $119,821 and working capital of
($641,622) as compared to $90,581 and ($613,415) at June 30, 1999. This increase
in working capital deficit is mostly due to the ongoing loss for the quarter and
a slight increase in overall debt. Included in long-term debt at September 30
and June 30, 1999 is approximately $822,000 of notes, secured by certain assets
of Steridyne Corporation, incurred to fund the Series A restructuring in October
1997 which were converted into 5,436,733 shares of Company common stock in
October of 1999. As a result of repaying the $822,000 of secured notes with the
Company's common stock, a significant amount of collateral is available for
borrowing purposes. The Company is currently discussing the possibility of
refinancing substantially all or a portion of these assets with several
commercial banks and financial institutions.
In August of 1998, the Company received its largest order ever to deliver
approximately 700 PhotoScreeners during fiscal 1999. The order which
approximated $1.5 million placed 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 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. This commitment has expired. Unless the customer executes a national
vision screening marketing program mentioning the PhotoScreener, sales of the
PhotoScreener in fiscal 2000 could decline.
The Chief Executive Officer and a 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 but was extended until December of 1999.
During the quarter ended September 30, 1999, the Company borrowed $15,000 from
an affiliate of the Chief Executive Officer and Director of the Company. At
September 30, 1999, the amount was outstanding and included in the balance sheet
as of the same date.
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. Additionally, the Company has made inquiries
with some of its largest customers and suppliers and determined that any
possible negative impact with regard to non-compliance with year 2000
programming issues are minimal.
The Company is also establishing a back up contingency plan which will allow it
to continue to operate its computer systems in the event unforeseeable external
factors disrupt normal operations in the year 2000.
9
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Articles of Incorporation of SouthStar Productions, Inc., n/k/a
Medical Technology & Innovations, Inc. [Incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-18 (File
No. 33-27610-A), filed March 17, 1989]
3.2 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]
3.3 Restated Articles of Incorporation for Medical Technology &
Innovations, Inc. [Incorporated by reference to the Company's Annual
Report on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]
3.4 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 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 the company's Annual Report on Form 10-KSB (File No.
33-27610-A), filed September 30, 1996.]
10.7 Purchase Agreement dated January 31, 1996 between the Company and
Glenn and Ruth Schultz. [Incorporated by reference to the Company's
Annual Report on Form 10-KSB (File No. 33-27610-A), filed September
30, 1996.]
10.8 Purchase Agreement dated March 8, 1999 between Medical Technology &
Innovations, Inc., Steridyne Corporation and Florida Medical
Industries, Inc.
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]
21.1 Subsidiaries. Medical Technology, Inc. and Steridyne Corporation.
24.1 Powers of Attorney as indicated on Page 25 of this Form 10-KSB.
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.
*(filed herwith, all other exhibits previously filed.)
10
<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: BY:
/s/ Dennis A. Surovcik /s/ Jeremy P. Feakins
- --------------------------------- ----------------------------
Surovcik, Senior Vice President Jeremy P. Feakins, Chairman and
Chief Financial Officer, Director Chief Executive Officer
Date: December 17, 1999.
11
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000847464
<NAME> MEDICAL TECHNOLOGY & INNOVATIONS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S.Currency
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Jun-30-1999
<PERIOD-START> Jul-01-1999
<PERIOD-END> Sep-03-1999
<EXCHANGE-RATE> 1
<CASH> 119,821
<SECURITIES> 0
<RECEIVABLES> 528,808
<ALLOWANCES> 0
<INVENTORY> 475,124
<CURRENT-ASSETS> 1,144,878
<PP&E> 815,879
<DEPRECIATION> 529,287
<TOTAL-ASSETS> 4,038,985
<CURRENT-LIABILITIES> 1,786,500
<BONDS> 0
0
1,595,000
<COMMON> 10,235,122
<OTHER-SE> (436,799)
<TOTAL-LIABILITY-AND-EQUITY> 4,038,985
<SALES> 0
<TOTAL-REVENUES> 1,055,279
<CGS> 669,756
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 519,115
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,911
<INCOME-PRETAX> (172,503)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (172,503)
<EPS-BASIC> (.008
<EPS-DILUTED> 0
</TABLE>
