<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission file number 0-28238
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
---------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 54-1521616
- --------------------------------- ---------------------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification number
22570 Markey Court, Dulles, Virginia 20166-6901
---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 444-7931
---------------------------------------------------------------------
(Former Name or Address 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 Issuer was required to file such reports), and (2) has been
subject to filing requirements for the past 90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the Registrant has filed all documents and reports required to
be filed by Sections 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [
] *** not applicable ***
APPLICABLE ONLY TO CORPORATE ISSUERS
As of June 15, 1999, the Company had 1,310,498 shares of its $0.001 par value
common stock outstanding.
Transitional Small Business Disclosure Format (Check one). Yes [ ] No [ X
]
<PAGE>
<PAGE>
INDEX
------
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements
BALANCE SHEET - June 30, 1999 3
STATEMENTS OF OPERATIONS - For the Three and Six Month Periods
Ended June 30, 1999 and 1998 4
STATEMENTS OF CASH FLOWS - For the Six Month Periods
Ended June, 1999 and 1998 6
NOTES TO FINANCIAL STATEMENTS 7
Item 2. Management's Discussion and Analysis of Results of Operations 8
Item 3. Defaults on Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
Exhibit 11 - Statement re Computation of Per Share Earnings 13
Exhibit 27 - Financial Data Schedule 14
<PAGE>
<PAGE>
Item 1. Financial Information
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
BALANCE SHEET
June 30, 1999
Unaudited
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 344,580
Accounts receivable 68,192
Inventories 216,054
Note receivable 378,409
Prepaid expenses and other 122,558
-------------
Total Current Assets 1,129,793
PROPERTY AND EQUIPMENT, net 60,172
INVESTMENT CARRIED AT COST, PLUS EQUITY
IN UNDISTRIBUTED EARNINGS 1,098,625
DEPOSITS AND OTHER 164,957
-------------
TOTAL ASSETS $ 2,453,547
=============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 147,753
Accrued payroll and related benefits 35,955
-------------
Total Current Liabilities 183,708
-------------
SHAREHOLDERS' EQUITY
Preferred stock, $.20 par value, 1,000,000
shares authorized; no shares issued and
outstanding -
Common stock, $.001 par value, 15,000,000
shares authorized; 1,310,498 issued and
outstanding 1,311
Additional paid-in capital 4,507,227
Accumulated deficit (2,238,699)
-------------
Total Shareholders' Equity 2,269,839
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,453,547
=============
</TABLE>
See accompanying notes to these financial statements.
<PAGE>
<PAGE>
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
Three Month Periods Ended June 30,
----------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
Net sales $ 213,243 $ 630,338
Cost of goods sold 185,575 494,361
-------------- -------------
Gross profit 27,668 135,977
Operating expenses:
Selling expenses 21,424 25,709
General and administrative 186,377 107,554
-------------- -------------
Total operating expenses 207,801 133,263
-------------- -------------
Operating income (loss) (180,133) 2,714
Other income (expense):
Financing expense, net 9,269 (25,135)
Rental income (138) 49,560
Gain on sale of assets - -
Other (8,507) -
-------------- -------------
Total other income (expense) 624 24,425
-------------- -------------
Income (loss) before earnings from equity
method investment (179,509) 27,139
Equity in net earnings of affiliated
entity 248,625 -
-------------- -------------
Net income $ 69,116 $ 27,139
============== =============
Net income (loss) per common share,
basic and dilutive $ .05 $ .02
Average common shares outstanding,
basic and dilutive 1,310,498 1,114,201
</TABLE>
See accompanying notes to these financial statements
<PAGE>
<PAGE>
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
Six Month Periods Ended June 30,
--------------------------------
1999 1998
-------------- -------------
<S> <C> <C>
Net sales $ 430,085 $ 1,192,361
Cost of goods sold 376,324 978,216
-------------- -------------
Gross profit 53,761 214,145
Operating expenses:
Selling expenses 34,376 65,859
General and administrative 364,527 314,898
-------------- -------------
Total operating expenses 398,903 380,757
-------------- -------------
Operating loss (345,142) (166,612)
Other Income (Expense):
Financing expense, net (15,663) (58,433)
Rental income 49,234 91,360
Gain on sale of assets 109,759 -
Other (8,507) -
-------------- -------------
Total other income (expense) 134,823 32,927
-------------- -------------
Loss before earnings from equity method
investment (210,319) (133,685)
Equity in net earnings of affiliated
entity 248,625 -
-------------- -------------
Net income (loss) $ 38,306 $ (133,685)
============== =============
Net loss per common share,
basic and dilutive $ .03 $ (.12)
Average common shares outstanding,
basic and dilutive 1,310,498 1,114,201
</TABLE>
See accompanying notes to these financial statements
<PAGE>
<PAGE>
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
-------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 38,306 (133,685)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities
Depreciation 25, 950 44,296
Amortization 4,590 4.099
Gain on sale of property and equipment (109,759) -
Compensation expense - 36,500
Change in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable 125,526 (85,929)
Inventories (35,268) 258,304
Prepaid expenses and other 47,635 (62,525)
Increase (decrease) in:
Accounts payable (45,973) (10,966)
Accrued expenses and other 23,748 (52,793)
-------------- -------------
Net cash provided by (used in)
operating activities 74,755 (2,699)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (648) (551)
Proceeds from sale of property and
equipment 877,941 -
Acquisition of patent rights and
certification - (1,300)
Payments on notes receivable 426,590 -
Issuance of notes receivable (455,000) (500,000)
Investment in Structural Holdings,
Inc. (1,098,625) -
-------------- -------------
Net cash provided by (used in)
investing activities (249,742) (501,851)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings - 1,900,000
Principal payments on long-term debt (66,370) (980,930)
-------------- -------------
Net cash provided by (used in)
financing activities (66,370) 919,070
-------------- -------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (241,357) 414,520
CASH AND CASH EQUIVALENTS, beginning of
period 585,937 109,461
-------------- -------------
CASH AND CASH EQUIVALENTS, end of period 344,580 523,981
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest 35,960 73,564
Debt assumed by sale of building 1,857,379 -
</TABLE>
See accompanying notes to these financial statements
<PAGE>
<PAGE>
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1. Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The results of operations for any interim period are not necessarily
indicative of results for the entire fiscal year. These statements should
be read in conjunction with the financial statements and related notes
included in Form 10-KSB for Guardian Technologies International, Inc.
("GRDN" or the "Company") for the year ended December 31, 1998, as the
notes to these interim financial statements omit certain information
required for complete financial statements.
Note 2. Private Placement
On June 23, 1999 the Company completed a private placement of Common
Stock. The Company received proceeds of $100,000 and issued 66,667 shares of
common stock to a third party corporation in exchange for the funding. The
funds were used for general corporate purposes.
Note 3. Acquisition of and Investment in Structural Holdings, Inc.
On April 23, 1999 the Company acquired securities representing the right
to acquire up to 55% of the outstanding shares of Structural Holdings, Inc., a
Delaware holding company ("Structural"). Concurrently with that transaction,
Structural acquired 100% of the outstanding shares of Common Stock of H & M
Steel, Inc., an Oklahoma corporation (H&M). Structural has no operations and
was formed specifically to purchase the shares of Common Stock of H&M. H&M is
engaged in the business of structural steel fabrication.
On August 12, 1999, the Company entered into a Stock Purchase Agreement
pursuant to which it sold 5% of its outstanding shares of Structural to
Structural's other shareholder. As a result, and in light of the composition
of management, the directors and shareholders of Structural following the sale
of stock, the Company was deemed to have relinquished effective control of
Structural. As such, the Company has reported its investment in Structural
under the equity method of accounting for the period ending June 30, 1999.
The total consideration paid for H & M was $4,500,000 plus net working
capital retained by the sellers, paid as follows: the sum of $1,700,000 was
contributed by Structural in cash at closing; the sum of $2,650,000 was
provided by Finova Capital Corporation ("Finova") through a credit
facility extended to Structural, and the balance was financed by the
Seller. The Finova credit facility includes a term loan for acquisition
purposes and also a $2,350,000 revolving line of credit.
The following is a financial summary of the Company's investment in
Structural. The table reflects the financial position of Structural at June
30, 1999 and its results of operations for the three months ended June 30,
1999:
Net Sales $ 1,941,239
Cost of Sales $ 1,294,799
Depreciation $ 17,574
Net Income $ 497,250
Guardian Share of Net Income $ 248,625
Current Assets $ 3,016,583
Noncurrent Assets $ 4,787,559
Total Assets $ 7,804,142
Current Liabilities $ 1,890,614
Noncurrent Liabilities $ 3,549,667
Total Liabilities $ 5,440,281
Net Assets $ 2,363,861
Guardian Share of Equity $ 1,098,625
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
The following is a discussion of the consolidated financial
condition and results of operations of the Company as of and for the two
fiscal periods ended June 30, 1999 and 1998. This discussion should be read
in conjunction with the Consolidated Financial Statements of the Company and
the Notes related thereto included in the Company's Form 10-KSB for the
fiscal year ended December 31, 1998.
The forward-looking statements included in Management's Discussion and
Analysis of Financial Condition and Results of Operations, which reflect
management's best judgement based on factors currently known,
involve risks and uncertainties. Actual results could differ materially
from those anticipated in the forward-looking statements as a result of a
number of factors, including but not limited to those discussed herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998.
Net sales for the three months ended June 30, 1999 were $213,243 compared
to $630,338 for the same period in 1998, a decrease of $417,095. The decrease
is primarily attributable to an order from a local police department of
approximately $150,000 completed during the second quarter of 1998 that was
not duplicated in 1999, and an order from an allied government of $200,000
that was completed during the third quarter of 1999. The Company completed a
similar order for this allied government during the second quarter of 1998 in
the amount of $329,432. Although this order will positively impact third
quarter revenues, the shift of this order from the second quarter contributed
significantly to the overall decrease in revenues for this period.
The Company's gross profit for the three months ended June 30, 1999 was
$27,668 compared to $135,977 for the same period in 1998. Gross profit
decreased as a result of lower sales volume. The gross profit percentage
decreased from 22% to 13% because lower production volume created idle direct
labor which generated under absorbed overhead costs.
Total operating expenses for the three months ended June 30, 1999 were
$207,801 compared to $133,263 for the same period in 1998. While selling
expenses remained flat quarter to quarter, general and administrative expenses
increased from $107,554 for the three months ended June 30, 1998 to $186,377
for the three months ended June 30, 1999, and increase of $78,823. The
increase during the current quarter is attributable to consulting costs and
salary and related expenses of the Company's president hired February 1, 1999.
Other income for the three months ended June 30, 1999 was $624 compared
to $24,425 for the same period in 1998, a decrease of $23,801. The decrease
is attributable to the elimination of rental income resulting from the sale of
the Company's building during the first quarter of 1999. The decrease in
rental income was partially offset by a reduction in interest expense. The
interest expense was incurred on the mortgage placed on the building. The
building mortgage was assumed by the buyer of the building and therefore
following the sale the Company no longer incurred interest expense associated
with the mortgage.
The Company posted net income for the three months ended June 30, 1999 of
$69,116 or $0.05 per share compared to net income of $27,139, or $0.02 per
share for the same period a year ago. Lower sales volume coupled with
increased general and administrative costs caused a loss from armor operations
of $179,509 for the period. Offsetting this loss was income from the
Company's equity method investment of $248,625 for the three months ended June
30, 1999 related to the Company recognizing its pro rata share of earnings in
Structural Holdings, Inc. for the period.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998.
Net sales for the six months ended June 30, 1999 were $430,085 compared
to $1,192,360 for the same period in 1998, a decrease of $762,275. The
decrease in sales is primarily attributable to lower sales generated through
the Company's contract with the General Services Administration of $56,261, an
order from a local police department of approximately $150,000 completed
during the second quarter of 1998 that was not duplicated in 1999, and an
order from an allied government of $200,000 that was completed during the
third quarter of 1999. The Company completed a similar order for this allied
government during the second quarter of 1998 in the amount of $329,432.
Although this order will positively impact third quarter revenues, the shift
of this order from the second quarter contributed significantly to the overall
decrease in revenues for the six months ended June 30, 1999.
The Company's gross profit for the six months ended June 30, 1999 was
$53,761 compared to $214,145 for the same period in 1998. Gross profit
decreased because of lower sales volume. The gross profit percentage
decreased from 18% to 12.5% because lower production volume created idle
direct labor which generated under absorbed overhead costs.
Total operating expenses for the six months ended June 30, 1999 were
$398,903 compared to $380,757 for the same period in 1998. Selling expenses
for the six months ended June 30, 1999 were $34,376 compared to $65,859 for
the same period in 1998, a decrease of $31,483 or 48%. General and
administrative costs for the six months ended June 30, 1999 were $364,527
compared to $314,898 for the same period in 1998, an increase of $49,629. The
increase is attributable to consulting costs and salary and related expenses
of the Company's president hired February 1, 1999.
Other income for the six months ended June 30, 1999 was $134,823 compared
to $32,927 for the same period in 1998, an increase in other income of
$101,896. The increase was primarily attributable to the gain on sale of the
Company's land and building of $109.759.
The Company posted net income for the six months ended June 30, 1999 of
$38,306 or $0.03 per share compared to a net loss of $133,685, or $0.12 per
share for the same period a year ago. Lower sales volume coupled with
increased general administrative costs caused a loss from armor operations of
$210,319 for the period. Offsetting this loss was income from the Company's
equity method investment of $248,625 for the six months ended June 30, 1999
related to the Company recognizing its pro rata share of earnings in
Structural Holdings, Inc. for the period.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999 the Company had total assets of $2,453,547 compared to
total assets of $4,241,669 at December 31, 1998, a decrease in assets of
$1,788,122. Total liabilities decreased from $2,110,136 as of December 31,
1998 to $183,708 as of June 30, 1999. Total shareholders' equity as of June
30, 1999 was $2,269,839 compared to total shareholders' equity of $2,131,533
as of December 31, 1998, an increase of $138,306.
Total current assets at June 30, 1999 were $1,129,793 and consisted of
cash and equivalents of $344,580, net accounts receivable of $68,192,
inventory of $216,054, notes receivable of $378,049 and prepaid expenses and
other current assets of $122,558. Total current liabilities at June 30, 1999
were $183,708 and consisted of trade accounts payable of $147,753 and accrued
expenses of $35,955. Working capital at June 30, 1999 was $946,085 compared
to working capital of $1,243,754 at December 31, 1998. The decrease in
working capital is attributable to reductions in accounts receivable of
$125,526 and the investment in Structural Holdings, Inc.
At June 30, 1999 the Company reported total assets of $2,453,547
including, in addition to the current assets of $1,129,793 discussed above,
net property and equipment of $60,172, deposits and other assets of $164,957
and an investment carried at equity (Structural Holdings, Inc.) of $1,098,625.
At June 30, 1999 the Company reported total liabilities of $183,708
represented entirely by the current liabilities discussed above. At December
31, 1998 the Company had total liabilities of $2,110,136 consisting of current
liabilities of $286,880 (trade accounts payable of $193,726, accrued expenses
of $12,207 and the current portion of long term debt of $80,947) coupled with
long term debt of $1,823,256. The decrease in total liabilities since
December 31, 1998 of $1,926,428 is primarily related to the sale of the
Company's land and building. When these assets were sold on March 31, 1999,
the buyer assumed the mortgage on the building, the approximate amount of
which was $1,857,379. The mortgage was classified as long term debt of
$1,823,256 plus the current portion of long term debt of $45,079 at December
31, 1998.
At June 30, 1999 the Company reported shareholders' equity of $2,269,839
compared to shareholders' equity of $2,131,533 at December 31, 1998. The
increase in equity of $138,306 is attributable to an equity infusion of
$100,000 received June 23, 1999 coupled with net income for the six months
ended June 30, 1999 of $38,306.
THE YEAR 2000 ISSUE
The Year 2000 Issue (Y2K) is the result of computer programs being
written using two digits rather than four to define the applicable year. Any
of the Company's computer programs that have date sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities. Based upon a recent assessment, the Company has made a
preliminary determination that it may be required to upgrade or replace
certain portions of its software so that its computer systems will properly
utilize dates beyond December 31, 1999. The Company presently believes
that, with upgrades of existing software and conversions to new
software at minimal cost, Y2K can be mitigated. However, the Y2K solutions
have not been implemented and are not scheduled to be completed until later
in 1999. If such upgrades and conversions are not made, or are not completed
or available timely, the Year 2000 Issue could have a material impact on the
operations of the Company.
Furthermore, the Company has yet to initiate formal communications
with its significant suppliers and large customers to determine the extent
to which the Company is vulnerable to those third parties' failure to
remediate their own Year 2000 Issue. The Company has one supplier upon
which it relies for the majority of its ballistic materials. Should this
supplier suffer from problems related to Y2K, the Company has alternate
sources to which it could turn to obtain these materials. As a secondary
alternative, the Company also has other sources to which it could turn to
obtain alternative ballistic materials made from other raw materials. As a
result, the Company believes that the effects of Y2K, as it may effect its
significant suppliers, can be mitigated. However, there can be no
guarantee that the systems of other companies on which the Company's
business relies will be timely converted, or that a failure to convert by
another company, or a conversion that is incompatible with the Company's
systems, would not have a material adverse effect on the Company. In the view
of the foregoing, there can be no assurance that the Year 2000 Issue will not
have a material adverse effect upon the Company.
Item 3. Defaults on 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.
Exhibit
Number Description
------- -----------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
<PAGE>
SIGNATURE
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
Date: August 20, 1999 By: /s/ J. Andrew Moorer
------------------- ------------------------------------
J. Andrew Moorer, President and CEO
<PAGE>
<PAGE>
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC
INDEX TO EXHIBITS
Exhibit
Number Description
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
<PAGE>
<PAGE>
EXHIBIT 11
<TABLE>
<CAPTION>
COMPUTATION OF EARNINGS PER SHARE
THREE AND SIX MONTHS ENDED 6/30/99
<S> <C>
Actual shares outstanding at 1/1/99 1,243,831
Common and common equivalent shares outstanding at 6/30/99 1,243,831
Weighted average shares outstanding for the three months
ended 6/30/99 1,243,831
</TABLE>
<TABLE>
<CAPTION>
Three months Six months
ended 6/30/99 ended 6/30/99
------------- -------------
<S> <C> <C>
Net Income (Loss) $ 69,116 $ 38,306
Net Loss per common and common
equivalent shares $ .05 $ .03
Rounded $ .05 $ .03
</TABLE>
<TABLE>
<CAPTION>
COMPUTATION OF EARNINGS PER SHARE
THREE AND SIX MONTHS ENDED 6/30/98
<S> <C>
Actual shares outstanding at 1/1/98 1,114,201
Common and common equivalent shares outstanding at 6/30/98 1,114,201
Weighted average shares outstanding for the three months
ended 6/30/98 1,114,201
</TABLE>
<TABLE>
<CAPTION>
Three months Six months
ended 6/30/98 ended 6/30/98
------------- -------------
<S> <C> <C>
Net Income (Loss) $ 27,139 ($ 133,685)
Net Loss per common and common
equivalent shares $ .02 ($ .12)
Rounded $ .02 ($ .12)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS FOUND ON PAGES 3, 4 AND 5 OF THE COMPANY'S
FORM 10-QSB FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 344,580
<SECURITIES> 0
<RECEIVABLES> 68,192
<ALLOWANCES> 0
<INVENTORY> 216,054
<CURRENT-ASSETS> 1,129,793
<PP&E> 200,334
<DEPRECIATION> 140,162
<TOTAL-ASSETS> 2,453,547
<CURRENT-LIABILITIES> 183,708
<BONDS> 0
0
0
<COMMON> 1,311
<OTHER-SE> 4,507,227
<TOTAL-LIABILITY-AND-EQUITY> 2,453,547
<SALES> 430,085
<TOTAL-REVENUES> 430,085
<CGS> 376,324
<TOTAL-COSTS> 398,903
<OTHER-EXPENSES> (399,111)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,663
<INCOME-PRETAX> 38,306
<INCOME-TAX> 0
<INCOME-CONTINUING> 38,306
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,306
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
