U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
--------------
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number 0-18881
-------
BRADLEY PHARMACEUTICALS, INC.
----------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 22-2581418
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
383 Route 46 W., Fairfield, NJ
------------------------------
(Address of principal executive offices)
(973) 882-1505
--------------
N/A
---
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) 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
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Title of Each Class Number of Shares Outstanding
of Common Stock as of May 1, 1999
------------------- ----------------------------
Class A, $.01 Par Value 8,198,883
Class B, $.01 Par Value 431,552
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
BRADLEY PHARMACEUTICALS, INC.
INDEX TO FORM 10 - QSB
March 31, 1999
Page
Number
Part I - Financial Information
Financial Statements (unaudited):
Condensed Consolidated Balance Sheet -
March 31, 1999 3
Condensed Consolidated Statements of
Operations - three months ended March 31,
1999 and 1998 4
Condensed Consolidated Statements of Cash
Flows - three months ended March 31, 1999
and 1998 5
Condensed Notes to Consolidated Financial
Statements 7
Management's Discussion and Analysis 8
Part II - Other Information
Item 1. Legal Proceedings 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
BALANCE SHEET
March 31, 1999
(UNAUDITED)
ASSETS
Current assets
- --------------
Cash and cash equivalents $ 141,153
Accounts receivable - net 5,561,598
Finished goods inventory 1,016,177
Prepaid samples and materials 1,262,976
Prepaid expenses and other 52,658
---------
Total current assets 8,034,562
Property and equipment - net 229,148
Intangibles - net 13,511,172
Other assets 188,672
----------
Total Assets $ 21,963,554
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
- -------------------
Current maturities of long-term debt $ 1,234,031
Revolving credit line 887,020
Accounts payable 1,628,467
Accrued expenses 3,565,799
Accrued income taxes 388,399
---------
Total current liabilities 7,703,716
Long-term debt, less current maturities 162,321
Commitments & contingencies
Stockholders' equity
- --------------------
Preferred stock, $.01 par value;
authorized, 2,000,000 shares; issued, none -
Common, Class A, $.01 par value, authorized
26,400,000; issued 8,193,551 shares at
March 31, 1999) 14,772,712
Common, Class B, $.01 par value, authorized
900,000 shares, issued and outstanding,
431,552 shares at March 31, 1999 845,448
Treasury stock, Class A, at cost (615,441 shares at
March 31, 1999) (901,859)
Accumulated deficit (618,784)
----------
14,097,517
----------
Total Liabilities & Stockholders' Equity $ 21,963,554
==========
See Notes to Condensed Consolidated Financial Statements
3
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
---------------------------
1999 1998
----------- ---------
Net Sales $ 5,128,470 $ 4,241,281
Cost of Sales 1,309,227 1,314,797
----------- ---------
3,819,243 2,926,484
----------- ---------
Selling, general and
administrative expenses 2,538,184 1,970,327
Depreciiation and amortization 323,006 273,434
Interest expense - net 74,728 42,167
----------- ---------
2,935,918 2,285,928
----------- ---------
Income before income taxes 883,325 640,556
Income taxes 327,000 237,000
----------- ---------
Net income $ 556,325 $ 403,556
=========== =========
Net income
per common share
Basic $ 0.07 $ 0.05
=========== =========
Diluted $ 0.07 $ 0.04
=========== =========
Weighted average number
of common shares
Basic 8,120,000 8,466,000
=========== =========
Diluted 8,192,000 9,316,000
=========== =========
See Notes to Condensed Consolidated Financial Statements
4
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
-------------------------
1999 1998
----------- -----------
Cash flows from operating activities:
Net income $ 556,325 $ 403,556
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities
Depreciation & amortization 323,006 273,434
Loss on sale of fixed assets 6,905 -
Noncash compensation and consulting
services 10,765 7,961
Changes in operating assets and liabilities
Accounts receivable (1,346,295) (2,250,120)
Inventory and prepaid samples and materials 372,490 111,206
Prepaid expenses and other (97,649) (9,097)
Accounts payable (213,830) 604,385
Accrued expenses 611,855 575,873
Income taxes payable 303,867 229,700
---------- ----------
Net cash provided by (used in) operating activities 527,439 (53,102)
---------- ----------
Cash flows from investing activities:
Investments in trademarks, and
other intangible assets (10,217) (18,673)
Purchase of property & equipment (33,286) (100,163)
Proceeds from sale of fixed assets 109,160 -
---------- ----------
Net cash provided by (used in) investing activities 65,657 (118,836)
---------- ----------
Cash flows from financing activities:
Payment of notes payable (20,030) -
Revolving credit line, net (1,508,683) 567,703
Proceeds from exercise of stok options - 3,438
Purchase of treasury shares (340,976) (48,974)
---------- ----------
Net cash provided by (used in) financing activities (1,869,689) 522,167
---------- ----------
Increase (decrease) in cash and cash equivalents (1,276,593) 350,229
Cash and cash equivalents at beginning of period 1,417,746 513,971
---------- ----------
Cash and cash equivalents at end of period $ 141,153 $ 864,200
========== ==========
(Continued)
5
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
----------------------
1999 1998
---------- ---------
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 37,000 $ 39,000
========= =========
Income taxes $ 22,000 $ 7,300
========= =========
See Notes to Condensed Consolidated Financial Statements
6
BRADLEY PHARMACEUTICALS, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - Summary of Accounting Policies
------------------------------
The unaudited interim financial statements of Bradley Pharmaceuticals, Inc.
(the "Company") 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 of complete financial statements.
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring entries)
necessary to present fairly the financial position as of March 31, 1999 and the
results of operations and cash flows for the three months ended March 31, 1999
and 1998, respectively.
The accounting policies followed by the Company are set forth in Note A of
the Company's financial statements as contained in the Form 10-KSB for the year
ended December 31, 1998 filed with the Securities and Exchange Commission.
The Form 10-KSB contains additional data and information with respect to long-
term debt, intangible assets, stock agreements, stock option plans, reserved
shares, chargebacks and rebates, related party transactions, income taxes,
commitments, economic dependency and other items and is incorporated by
reference.
The results reported for the three months ended March 31, 1999 are not
necessarily indicative of the results of operations which may be expected for
a full year.
BRADLEY PHARMACEUTICALS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
This document may contain forward-looking statements which reflect
management's current views of future events and operations. These forward-
looking statements are based on assumptions and external factors, including
assumptions relating to regulatory action, capital requirements and competing
products. Any changes in such assumptions or external factors could produce
significantly different results.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
On March 31, 1999, the Company had working capital of $331,000 a
decrease of $540,000 over the December 31, 1998 working capital of $871,000.
The decrease in the Company's working capital position at March 31, 1999 was
primarily due to the principal balance of the promissory note amounting to
$1,084,000 from the BRONTEX(r) acquisition with a due date of February 2000
becoming current, which was partially offset by operating profit and positive
cash flow from operations.
Working capital as of March 31, 1999 included (i) a decrease of $1,277,000
in cash and cash equivalents principally due to net repayments of the revolving
credit line and purchases of treasury stock. (ii) an increase in accounts
receivable of approximately $1,346,000, primarily due to wholesale stocking
programs in March 1999, which was prompted by offering slight discounts. This
event, which also occurred in March 1998, may have the effect of reducing
revenue in the Second Quarter 1999 and may have reduced revenue in the Second
Quarter 1998. (iii) an increase in inventory and prepaid samples and materials
of $372,000; (iv) a decrease in accounts payable of approximately $214,000;
(v) an increase in accrued expenses of $612,000 due to an increase in the
chargeback and rebate accruals, which was prompted by higher volume sales in
March 1999; and (vi) an increase in income taxes payable of $304,000.
The United States Food and Drug Administration (the "FDA") is currently
reviewing cough and cold products for its Over-the-Counter ("OTC") monograph,
and could designate the formula that is in DECONAMINE(r) as an OTC formula-
tion. It is not currently possible for the Company to predict how its
operations and financial condition will be affected if the DECONAMINE(r)
product line is converted from prescription status to over-the-counter status.
Further, the Company is required to file and Abbreviated New Drug
Application "ANDA" with the FDA for its DECONAMINE(r) SR product, which is
expected to maintain the prescription status of this product beyond the final
monograph. The cost of this application is approximately $900,000. The
Company has entered into non-binding agreement with Phoenix International to
perform clinical studies required for the issuance of the ANDA. As of the date
of this 10-QSB, the Company has paid approximately $350,000 with respect to this
project. The project is being deferred further until regulatory and competitive
circumstances warrant completion and submission to the FDA. Completion of the
research and development project is subject, however, to the Company's either
generating sufficient cash flow from operations to fund the same or obtaining
requisite financing from outside sources, of which there can be no assurance.
Therefore, the Company cannot at this time reasonably anticipate the timing of
the expenditure of funds for these purposes. The inability of the Company to
further develop and/or file the necessary ANDA for DECONAMINE(r) SR may have
material adverse effect on the Company's business.
In January 1999, the Company announced the completion of the repurchase
program of 400,000 shares and additionally announced another program of
repurchasing an additional 600,000 shares of the outstanding Class A common
stock in open market transactions or a cumulative repurchase of 12% of the
outstanding Class A common stock over the next 36 months. These shares will be
held in Treasury by the Company to be used for purposes deemed necessary by the
Board of Directors, including funding the Company's 401(k) Plan matching
contribution. As of May 1, 1999, the Company has repurchased 684,000 shares of
Class A common stock.
On January 1, 1999, the Company initiated the EVA(r) Financial Management
System. The EVA(r) program is based upon the Company's creation of economic
value added during 1999. The economic value added is a financial calculation
based upon the Company's net income less a charge for capital. Depending upon
the Company's improvement in EVA(r), a bonus to employees may be paid. As of
March 31, 1999, the Company has accrued for approximately $126,000 for this
program.
The Company is aware of the issues associated with the programming code
in many existing computer systems and devices with embedded technology as the
millenium approaches. The "Year 2000" problem concerns the inability of
information and technology-based operating systems to properly recognize and
process date-sensitive information beyond December 31, 1999. The Year 2000
problem is potentially pervasive; virtually every computer operation or
business system that utilizes embedded computer technology may be affected in
some way by the rollover of the two-digit year value to 00. The risk is that
computer systems will not properly recognize date sensitive information when
the year changes to 2000, which can result in system failures or miscalcu-
lations, resulting in a serious threat of business disruption.
In response to the potential impact of the Year 2000 issue on the Company's
business and operations, the Management has purchased and converted its own in-
house system. In the process, the Company determined that the new systems and
hardware were substantially Year 2000 compliant. Certain other software is
being corrected or reprogrammed for Year 2000 compliance. As such, Management
believes the Year 2000 issues with respect to its internal systems can be
mitigated without a significant potential effect on the Company's financial
position or operations.
In addition, to ensure external Year 2000 readiness, the Company has
made written inquiries concerning the Year 2000 readiness of all of its vendors,
suppliers, customer and others with whom the Company has significant business
relationships. Responses have been received from many of those contacted,
although some of the responses have been inconclusive with respect to Year 2000
compliance. As a result, follow up inquiries are planned for any critically
dependent third parties not responding. A further assessment of the potential
impact of the Year 2000 issue on the Company's business and operations will be
made as this information is received and evaluated. The Company is not
currently aware of any third party issues that would cause a significant
disruption of its business or operations. If the follow-up assessment of any
significant third party responses indicates that they will not be Year 2000
compliant, it may be necessary to develop contingency plans to minimize the
negative impact on the Company.
The Company's goal is to have all internal systems Year 2000 compliant,
and third party assessments completed no later than June 30, 1999. This should
allow sufficient time prior to January 1, 2000 to validate the system
modifications and complete any additional contingency planning for third
parties that may not be Year 2000 compliant. However, given the complexity of
the Year 2000 issue, there can be no assurance that the Company will be able to
address these problems without costs and uncertainties that might affect future
financial results or cause reported financial information not to be necessarily
indicative of future operating results or future financial condition.
To date, the Company has not finalized its contingency plans for possible
Year 2000 issues. After the completion of the assessment and review of the
results of monitoring the compliance efforts and status of third parties, the
Company will finalize such contingency plans based on its assessment of outside
risks. The Company anticipates that final contingency plans, as necessary,
will be in place by September 30, 1999. The total costs incurred to date in
the assessment, evaluation and remediation of the Year 2000 compliance matters
have been nominal and management estimates that total future third party,
software and equipment costs, based upon information developed to date are
estimated to be less than $100,000.
RESULTS OF OPERATIONS
- ---------------------
Chargebacks and rebates are the difference between prices at which the
Company sells its products (principally DECONAMINE(r) SR) to wholesalers and
the sales price ultimately paid by the end-user (often governmental agencies
and managed care buying groups) pursuant to fixed price contracts. The Company
records an estimate of the amount either to be charged-back to the Company or
rebated to the end-user at the time of sale to the wholesaler.
NET SALES (net of all adjustments to sales) for the three months ended
March 31, 1999 and 1998 were $5,128,000 and $4,241,000, respectively, or
approximately an increase of 21%. This increase primarily reflects gains
resulting from Doak Dermatologics' products CARMOL(r), ACID MANTLE(r), and
Kenwood Therapeutics' products TYZINE(r), PAMINE(r), and new product sales of
BRONTEX(r). The increase in net sales was partially reduced by a sales decline
in LePont(r) Beauty Enhancer and a slight decline in DECONAMINE(r).
COST OF SALES for the three months ended March 31, 1999 was $1,309,000
representing a decrease from the three months ended March 31, 1998 of $6,000.
The Company's gross profit margin for the three months ended March 31, 1999
and 1998 were 74% and 69%, respectively. This improvement reflects a change
in the Company's sales mix with greater sales of products that carry a higher
gross profit percentage.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES was $2,538,000 for the three months
ended March 31, 1999, representing an increase of $568,000 over the three months
ended March 31, 1998. The increases in selling, general and administrative
expenses continue to reflect increased investment in the Company's sales and
marketing areas, with resulting increases in employee benefits, payroll taxes,
promotional, and advertising expenses. Additionally, samples and promotional
materials expensed were increased in the First Quarter 1999 by approximately
$75,000 reflecting direct expensing of expenditures not yielding future
benefits. The Company also initiated the EVA(r) bonus program, which
represented an increase of $126,000. The Company, however, continues to
implement steps designed to reduce expenses and maintain cost controls, where
applicable.
DEPRECIATION and AMORTIZATION EXPENSES for the three months ended
March 31, 1999 was $323,000 representing an increase of $50,000 as compared
to the three months ended March 31, 1998. The increase was principally due to
an increase in amortization resulting from the BRONTEX(r) acquisition, which
occurred in October 1998.
INTEREST EXPENSE - NET for the three months ended March 31, 1999 was
$75,000, or an increase of $33,000 from the three months ended March 31,
1998. This increase was principally due to an increase in the average
revolving credit line and an increase in interest on borrowings related to the
BRONTEX(r) acquisition.
NET INCOME for the three months ended March 31, 1999 was $556,000 as
compared to $404,000, an increase of 38%. The increase was principally due to
an increase in net sales and an increase in the gross profit margin. The
increase in income tax is due to a higher pretax income, however the effective
rate in both periods approximate the statutory rate.
NET INCOME PER COMMON SHARE for the three months ended March 31,
1999 on a diluted basis was $.07 per common share, representing a $.03 increase
over a comparable period in 1998. Net income per basic common share for the
three months ended March 31, 1999 was $.07, representing a $.02 increase over
a comparable period in 1998.
Basic per share information is computed based on the weighted average
common shares outstanding during each period. Diluted per share information
additionally considers the shares that may be issued upon exercise or conversion
of stock options and warrants (less the shares that may be repurchased with the
funds received from their exercise).
The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computations pursuant to SFAS No. 128,
"Earnings Per Share."
1999 1998
---- ----
Basic Shares 8,120,000 8,466,000
Dilution: Stock Options and Warrants 72,000 850,000
--------- ---------
Diluted Shares 8,192,000 9,316,000
========= =========
Income available to common shareholders $ 556,325 $ 403,556
Basic earnings per share $ 0.07 $ 0.05
Diluted earnings per share $ 0.07 $ 0.04
BUSINESS SEGMENT INFORMATION became effective January 1, 1998, the
Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information." Pursuant to SFAS No. 131, the Company's two
reportable segments are Kenwood Therapeutics (nutritional, respiratory,
personal hygiene and internal medicine brands) and Doak Dermatologics, Inc.
(dermatological brands).
The accounting policies used to develop segment information correspond to
those described in the 1998 10-KSB's summary of significant accounting policies.
Segment profit or loss is based on profit or loss from operations before income
taxes. The reportable segments are distinct business units operating in
different industries. The following information about the two segments is
for the period ended March 31, 1999 and 1998.
1999 1998
---- ----
Net sales:
Kenwood Therapeutics $3,281,000 $2,496,000
Doak Dermatologics,Inc. 1,847,000 1,745,000
--------- ---------
$5,128,000 $4,241,000
========= =========
Interest expense, net:
Kenwood Therapeutics $62,000 $38,000
Doak Dermatologics, Inc. 13,000 4,000
------ ------
$75,000 $42,000
====== ======
Depreciation and amortization:
Kenwood Therapeutics $252,000 $207,000
Doak Dermatologics, Inc. 71,000 66,000
------- -------
$323,000 $273,000
======= =======
Net income:
Kenwood Therapeutics $286,000 $374,000
Doak Dermatologics, Inc. 270,000 30,000
------- -------
$556,000 $404,000
======= =======
Segment assets:
Kenwood Therapeutics $18,062,000 $16,883,000
Doak Dermatologics, Inc. 3,902,000 3,636,000
---------- ----------
$21,964,000 $20,519,000
========== ==========
Expenditure for segment assets:
Kenwood Therapeutics $42,000 $35,000
Doak Dermatologics, Inc. 2,000 84,000
------ -------
$44,000 $119,000
====== =======
Geographic information
(revenues):
Kenwood Therapeutics
United States $3,159,000 $2,412,000
Other countries 122,000 84,000
--------- ---------
$3,281,000 $2,496,000
========= =========
Doak Dermatologics, Inc.
United States $1,706,000 $1,550,000
Other countries 141,000 195,000
--------- ---------
$1,847,000 $1,745,000
========= =========
The basis of accounting that is used by the Company to allocate expenses
that relate to both segments are based upon the proportionate quarterly net
sales of each segment. Accordingly, the allocation percentage used can
differ between quarters and years depending on the segments proportionate net
sales over total net sales.
Item 1. Legal Proceedings
- -------------------------
The Company is involved in legal proceedings of various types in the ordinary
course of business. While any such litigation to which the Company is a party
contains an element of uncertainty, management presently believes that the
outcome of each such proceeding or claim which is pending or known to be
threatened, or all of them combined, will not have a material adverse effect
on the Company's consolidated financial position.
Item 5. Other Information
- -------------------------
From time to time in the ordinary course of business of its former Doak
manufacturing site in Westbury, New York, the Company is subject to claims or
threatened claims relating to environmental matters. The Company believes that
none of such claims or threatened claims made through the date of this 10-QSB,
either individually or in the aggregate, will have a material adverse affect on
the Company's business, financial conditions or results from operations.
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
On April 7, 1999, the Company entered into a loan agreement with LaSalle
Business Credit, Inc. ("LaSalle") that is comprised of a $5 million revolving
asset-based credit facility and a $2.5 million acquisition note for future
product acquisitions. In order to close this new loan agreement with LaSalle,
the Company paid in full the outstanding loan balance and early termination
penalties to The CIT Group/ Credit Finance, Inc. ("CIT") of approximately
$1.6 million, using a portion of the availability from the new revolving credit
facility. Advances under this new revolving credit facility are calculated
pursuant to a formula, which is based on the Company's then "eligible" accounts
receivable and inventory levels. Advances under the $2.5 million acquisition
note are pursuant to the Company finding a potential acquisition and receiving
LaSalle's final approval. This new loan agreement has an initial term of three
years, requires an annual fee, and is subject to an unused credit line
percentage fee. Interest accrues on amounts outstanding under this new loan
agreement at the rate equal to the prime rate of interest, announced from time
to time, by LaSalle National Bank plus 1% for the revolving credit facility
and plus 2% for the amount outstanding for the acquisition note. The Company's
obligations under this new loan have been collateralized by the Company's
grant to LaSalle of a lien upon, and the pledge of a security interest to
the Company's prior lien with CIT, which consists of substantially all assets
of the Company. This new loan agreement contains certain covenants and
restrictions.
SIGNATURES
In accordance with the requirement of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BRADLEY PHARMACEUTICALS, INC.
-----------------------------
(REGISTRANT)
Date: May 10, 1999 /s/ Daniel Glassman
--------------------------------------
Daniel Glassman
Chairman of The Board, President and
Chief Executive Officer
(Principal Executive Officer)
Date: May 10, 1999 /s/ R. Brent Lenczycki, CPA
-------------------------------------
R. Brent Lenczycki, CPA
Director of Finance
(Principal Financial and
Accounting Director)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Balance Sheet, Cash Flow and Statement of Operations and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 141,153
<SECURITIES> 0
<RECEIVABLES> 5,561,598
<INVENTORY> 1,016,177
<CURRENT-ASSETS> 8,034,562
<PP&E> 977,866
<DEPRECIATION> 748,718
<TOTAL-ASSETS> 21,963,554
<CURRENT-LIABILITIES> 7,703,716
<LT DEBT> 162,321
0
0
<COMMON> 15,618,160
<OTHER-SE> (1,520,643)
<TOTAL-LIABILITY-AND-EQUITY> 21,963,554
<SALES> 5,128,470
TOTAL-REVENUES> 5,128,470
<CGS> 1,309,227
<TOTAL-COSTS> 1,309,227
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74,728
<INCOME-PRETAX> 883,325
<INCOME-TAX> 327,000
<INCOME-CONTINUING> 556,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 556,325
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>
