SECURITIES & 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 quarterly period ended March 31, 1998
[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
Commission File No. 0-27210
Tech Electro Industries, Inc.
(Name of Small Business Issuer in its Charter)
Texas 75-2408297
- ------------------------------ ---------------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
2941 Main Street, Suite 300-B, Santa Monica, California 90405
- ------------------------------------------------------- --------
Address of principal executive office Zip Code
Issuer's telephone number: (310) 396-1782
Check whether the issuer has (1) filed all reports required by Section 13 or
15(d) of the Exchange Act during the past 12 months, and (2) been subject to
such filing requirements for the past ninety (90) days. Yes (X) No ( )
As of March 31, 1998, 3,778,176 shares of Common Stock were outstanding.
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THIS DOCUMENT IS PREPARED AND FILED UNDER THE REQUIREMENTS
OF REGULATION S-B OF THE SECURITIES AND EXCHANGE COMMISSION,
EFFECTIVE JULY 31, 1992.
Index
Item Page
Part I - Financial Statements
Item 1 - Financial Statements (unaudited)
Condensed Consolidated Balance Sheet at
March 31, 1998 (unaudited) and December 31, 1997 ................3
Consolidated Statement of Operations (unaudited)
for the Three Months Ended March 31, 1998 and 1997...............5
Consolidated Statements of Cash Flows (unaudited)
for the Three Months Ended March 31, 1998 and 1997...............6
Notes to Consolidated Financial
Statements.......................................................7
Item 2 - Management's Discussions and
Analysis of Financial Condition and
Results of Operations............................................10
Part II - Other Information
Item 1 - Legal Proceedings................................................13
Item 2. Changes in Securities............................................13
Item 3. Defaults Upon Senior Securities..................................13
Item 4. Submission of Matters to a Vote of Securities Holders............13
Item 5. Other Information................................................13
Item 6. Exhibits and Reports on Form 8-K.................................14
Signatures....................................................................15
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Tech Electro Industries Inc, and Subsidiaries
Consolidated Balance Sheets
ASSETS
------
(unaudited)
Mar 31, 1998 Dec 31, 1997
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $1,092,354 $1,918,754
Marketable securities 125,550 94,063
Accounts and notes receivable
Accounts receivable trade 942,712 974,602
Notes 334,378 335,000
Other 44,291 33,942
Inventory 1,695,504 1,801,035
Prepaid expenses 274,039 211,351
----------- -----------
TOTAL CURRENT ASSETS 4,508,828 5,368,747
----------- -----------
NET PROPERTY & EQUIPMENT 305,103 308,882
----------- -----------
OTHER ASSETS
Investment in subsidiary (Note A) 1,000,000 500,000
Notes receivable 67,708 77,150
Other assets 2,270 2,288
----------- -----------
TOTAL OTHER ASSETS 1,069,978 579,438
----------- -----------
TOTAL ASSETS $5,883,909 $6,257,067
=========== ===========
See Notes to Consolidated Financial Statements
(See Note A) - Amounts do not Include US Computer Group, Inc.
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Tech Electro Industries, Inc and Subsidiaries
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
(unaudited)
Mar 31,1998 Dec 31,1997
----------- -----------
Current liabilities:
Accounts payable trade $498,507 $467,821
Accrued liabilities 40,076 551,289
Notes payable - banks 175,000 425,000
Dividends payable 31,025 25,563
---------- ----------
Total current liabilities 744,608 1,469,673
MINORITY INTEREST IN SUBSIDIARY 12,738 29,201
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value; 298,534 319,934
1,000,000 shares authorized, 65,000 Class
B issued and outstanding on March 31, 1998
and December 31, 1997, liquidation
preference of $341,250; 233,534 and
254,934 Class A issued and outstanding on
March 31, 1998 and on December 31, 1997
respectively; liquidation preference of
$1,226,054
Common stock, $.01 par value; 37,782 34,985
10,000,000 shares authorized,
3,778,176 shares issued and
outstanding on March 31, 1998 and
3,498,407 shares issued and
outstanding on December 31, 1997
Additional paid-in capital 6,239,304 5,713,867
Subscription receivable 0 (1,000)
Unrealized Gains (Losses) (1,250) 24,624
Retained Earnings Accumulated Deficit (1,447,807) (1,334,217)
---------- ----------
Total stockholders' equity 5,126,563 4,758,193
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $5,883,909 $6,257,067
========== ==========
See Notes to Consolidated Financial Statements
(See Note A) - Amounts do not Include US Computer Group, Inc.
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Tech Electro Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
Mar 31, 1998 Mar 31, 1997
---------- ----------
Sales $1,996,589 $1,086,565
Cost of goods sold 1,355,537 798,939
---------- ----------
Gross profit 641,052 287,626
General and administrative expenses 756,086 522,370
---------- ----------
Loss from operations (115,034) (234,744)
Other income (expense):
Interest income 25,424 16,136
Interest expense (6,639) (15,970)
---------- ----------
Total other income (expense) 18,785 166
Minority share of subsidiary loss 16,463 14,468
---------- ----------
Loss before provision for taxes (79,786) (220,110)
Income tax expense (benefit):
---------- ----------
Total income tax expense (benefit) 0 0
---------- ----------
NET LOSS $(79,786) $(220,110)
========== ==========
Basic and diluted net loss per share
attributable to common shareholders $(0.03) $(0.13)
========== ==========
Number of weighted-average shares of
common stock outstanding (basic and diluted) 3,638,292 1,907,164
========== ==========
See Notes to Consolidated Financial Statements
(See Note A) - Amounts do not Include US Computer Group, Inc.
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Tech Electro Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended
Mar 31, 1998 Mar 31, 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(79,786) $(220,110)
Adjustments to reconcile net loss to
cash used by operations
Deprecation and amortization adjustment 14,076 7,424
Provision for slow moving inventory 15,116 15,000
Minority interest share of subsidiary (16,463) (14,468)
Changes in operating assets and liabilities
(Increase) decrease in:
Accounts receivable - trade 31,891 (246,525)
Other receivables (9,727) 1,496
Inventory 90,815 39,934
Prepaid expenses (63,088) (219,481)
Increase (decrease) in:
Accounts payable 30,686 (12,659)
Accrued liabilities (511,213) 28,217
----------- -----------
NET CASH USED BY OPERATING ACTIVITIES (497,693) (622,046)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (10,280) (18,129)
Additions to certificates of deposit -0- (600,000)
Advances on note receivable 9,442 8,894
Marketable securities (57,361) 7,543
Acquisition of US Computer Group, Inc. (500,000) -0-
----------- -----------
NET CASH USED BY
INVESTING ACTIVITIES 558,199 (601,692)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt (250,000) (346,772)
Proceeds from long-term debt 0 (245,000)
Proceeds from sale of preferred,
common, warrants 474,030 1,870,000
Dividends paid 5,462 (32,491)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 229,492 1,245,737
----------- -----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS 826,400 21,999
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,918,754 261,973
----------- -----------
CASH AND EQUIVALENTS AT END OF PERIOD $1,092,354 $283,972
=========== ===========
See Notes to Consolidated Financial Statements
(See Note A) - Amounts do not Include US Computer Group, Inc.
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Tech Electro Industries, Inc and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in accordance with the instructions per Item 310(b) of Regulation SB.
Accordingly, they do not include all of 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
adjustments) considered necessary for a fair presentation have been included,
with the exception of the consolidated statements of US Computer Group, Inc., as
discussed below. Operating results for the three month period ended March
31, 1998 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1998.
As discussed below, on March 19, 1998, the Company purchased 51% of the issued
and outstanding common stock of U.S. Computer Group, Inc. (USCG). USCG's
results of operations for the period from March 19 to March 31, 1998, and
balance sheet as of March 31, 1998 have not been included in the consolidated
amounts reported due to the unavailability of the prior year end final audited
balances. As of the date of this filing, the audit of USCG's February 28, 1998
financial statements is in progress but not yet complete.
Note B - Organization
Tech Electro Industries, Inc. ("TEI" or the "Company") was formed on January 10,
1992 as a Texas organization. On January 31, 1992, TEI acquired 100% of the
outstanding common stock of Computer Components Corporation (CCC). In February,
1996, TEI filed a Form SB-2 Registration Statement and completed a public
offering the net proceeds of which amounted to $2,043,891 including warrants.
On June 1, 1996, pursuant to a Stock Exchange Agreement, TEI acquired 100% of
the outstanding shares of Vary Brite Technologies, Inc. (VBT) by issuing 50,000
shares of its common stock. The business combination was accounted for using the
pooling method. The historical consolidated statements of operations prior to
the date of the combination have not been adjusted to include the operations of
VBT as these operations are immaterial to the consolidated operations of the
Company. Accordingly, the accompanying consolidated statements of operations
include, the operations of VBT from June 1, 1996 forward. The assets and
liabilities acquired were also immaterial to the consolidated balance sheets of
the Company.
On October 29, 1996, TEI incorporated Universal Battery Corporation (UBC) as a
67% owned subsidiary.
Effective February 10, 1997, pursuant to Regulation S as promulgated by the
Securities and Exchange Commission, TEI sold 1,100,000 shares of its common
stock and options to acquire 1,000,000 shares of common stock for $1,870,000, a
combined price of $1.70 net to the Company. The options were issued with an
exercise price of $2.15 per share and expire thirteen months from the date of
issuance. In February 1998 the terms on the options were extended to March 1999
and the exercise price was increased to $2.50 per share.
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On March 19, 1998, the Company completed the acquisition of 51% of the issued
and outstanding common stock of U.S. Computer Group, Inc. The purchase
consideration for the interest was $1,000,000 paid in cash. The results of
operations for the nine business days in the quarter were not material with
respect to the operations of the Company. Due to the timing of the acquisition,
the balance sheet of US Computer Group, Inc. has not been consolidated with the
balance sheet of Tech Electro Industries, Inc. and Subsidiaries. Management has
recorded the purchase as an investment in subsidiary at a purchase price of
$1,000,000, which management believes reflects the net impact of the Company's
interest in US Computer Group, Inc. on the financial condition of the Company.
The Company will include financial information regarding US Computer Group, Inc.
in future reports, which will reflect a reclassification of such investment on a
consolidated basis with the balance sheet of the Company.
Note C - Dividends
Dividends were declared on March 6, 1998 for Class A and Class B Preferred Stock
at $0.0975 per share. This dividend was paid in the form of common stock at the
rate of .04 shares of common for each share of preferred. The dividend was
payable on March 31, 1998 to stockholders of record a the close of business of
February 28, 1998. In addition, dividends paid during the quarters ended March
31, 1998 and 1997 were $28,432 and $30,000 respectively. The cash dividends of
$28,432 were declared and accrued as of December 31, 1997. Dividends payable at
March 31, 1998 were $33,894.
Note D - Notes Receivable
Notes Receivable consisted of the following at March 31, 1998:
Note receivable from a minority shareholder,
$30,000 due at maturity in August 1999 and $65,616
due in February, 2000. The notes are being
liquidated by monthly payments of $3,500 which are
applied against interest due at six percent per
annum on both said notes and the balance applied
in reduction of the principal of the note due in
February, 2000. 67,371
Note receivable, each in the sum of $7,500 from
two minority shareholders bearing interest at six
percent per annum and are due on December 1, 2001.
Interest for the period from May 1, 1997 through
October 31, 1997 in the sum of $225 is due and
payable on each said notes in November 1, 1997.
Commencing December 1, 1997 and continuing on the
1st day of each month thereafter the principal of
each note shall be due and payable in 48 equal
monthly installments in the amount of $156.25
each. In addition to the payment of monthly
principal the maker of each note shall pay
interest at the rate of six percent per annum
monthly on the unpaid principal balance
simultaneously with the payment of the principal. 14,375
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Note receivable from minority shareholder in the
amount of $320,000 with interest at ten and one
half percent to be paid quarterly beginning
October 1, 1997 and thereafter on the first day of
January, April and July until principal and
interest is paid in full at maturity on September
5, 1998. Secured by 65,000 shares of Class B
Preferred Stock of TEI and 40,000 shares of common
stock of Electric and Gas Technology, Inc. 320,000
-------
Total notes receivable 401,746
Less current maturities 334,378
Long-term portion 67,368
Note E - Bank Debt
Bank debt as of March 31, 1998 consisted of the following:
$750,000 line of credit with Texas Central Bank
payable on demand with interest at prime plus one
half percent, maturing June 30, 1998, and secured
by accounts receivable, inventory and machinery
and equipment.
Currently outstanding $175,000
Less current maturities 175,000
Long term portion -0-
Note F - Loss per Share
The Company adopted SFAS NO. 128, "Earnings Per Share", in 1997, which, requires
the disclosure of basic and diluted net income (loss) per share. Basic net
income (loss) per share is computed by dividing net income (loss) by the
weighted average number of common shares outstanding for the period. Diluted net
loss per share is computed by dividing net income (loss) by the weighted average
number of common shares and common stock equivalents outstanding for the period.
The Company's common stock equivalents are not included in the diluted loss per
share for 1998 and 1997 as they are antidilutive. Therefore, diluted and primary
loss per share is identical. Net loss per share has been increased for accrued
dividends on preferred stock totaling $33,894 and $10,950 respectively.
Note G - Stock and Options Issued to Two Employees
On February 25, 1998 225,000 common shares were issued to tow employees for
payment of accrued 1997 compensation. In addition to the shares issued, the
Company also issued a total of 150,000 options to purchase the Company's common
stock at an exercise price of $5.00. The options will expire 24 months from the
February 6, 1998 date of grant.
Note H - Subsequent Event
In April 1998, the Company commenced a private placement of 375,000 shares of
the Company's common stock for gross proceeds of $750,000, or $2.00 per share.
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Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and notes thereto included
elsewhere in this Form 10-QSB. Except for the historical information contained
herein, the discussion in this Form 10-QSB contains certain forward looking
statements that involve risks and uncertainties, such as statements of the
Company's plans, objectives, expectations and intentions. The cautionary
statements made in this Form 10-QSB should be read as being applicable to all
related forward-looking statements wherever they appear in this Form 10-QSB. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, without
limitation, those factors discussed herein and in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1997.
Recent Developments
On January 19, 1998, the Company appointed David Kaye as Chief
Financial Officer of the Company. Mr. Kaye replaced Sadasuke Gomi, who had held
this position on a temporary basis. Mr. Gomi resigned as secretary of the
Company on February 16, 1998 but remains a director. Mee Mee Tan was appointed
to replace Mr. Gomi in the position of secretary of the Company. Ms. Tan is the
daughter of Mr. Kim Wah Tan, Chairman, President, and CEO of the Company.
On May 1, 1998, the Company entered into a Letter of Intent to merge
with DenAmerica Corporation (DEN). Under the terms of the agreement the
shareholders of Den will receive $ 4.00 in cash and $ .90 in newly issued
preferred stock in the Company. The proposed merger is subject to various
contingencies including financing, regulatory approvals and other matters.
In March of 1998, the Company opened an office at 2941 Main Street,
Suite 300B, in Santa Monica, California.
Results of Operations
Currently, the Company's operations are conducted through its
subsidiaries, Computer Components Corporation (CCC), Very Brite Technologies
(VBT), Universal Battery Corporation (UBC), and US Computer Group, Inc. (USCG).
The Company's results for operations for the first three months of
1998, compared to the first three months of 1997 were impacted primarily by the
increase in sales by the Company's subsidiaries CCC and UBC. USCG's contribution
to operations of the Company were not significant due to the fact that the
Company's purchase of USCG was not consummated until March 19, 1998.
Revenues
For the three months ending March 31, 1998, the Company had recorded
sales of $1,996,588 compared to sales of $ 1,086,565 for the same period in
1997, an increase of 84%. This increase can be attributable to enhanced
marketing efforts on the part of the Company. The increase in sales was
primarily attributable to increased sales by UBC, which recorded a 555% increase
in sales from $ 100,376 to $657,409 in the same period of 1998. CCC generated
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revenues of $ 1,295,316 for the three month period ending March 31, 1998
compared to $ 972,136 for the same period in 1997, an increase of 34%. VBT
recorded increased sales of $ 14,143 to $ 43,867 for the three month period
ending March 31,1998 over the same period in 1997, an increases of 211%. This
relatively high percentage increases in sales by UBC and VBT from the period
ending March 31, 1997 to the same period for 1998 are attributable to the fact
that both operations could be characterized as start-ups in 1997.
The Company recognized a net loss of $ 79,786 for the three month
period ending March 31, 1998, compared to a loss of $ 220,110 for the similar
period of 1997. This reduction in losses in 1998 is attributed primarily to an
increase in CCC's gross profit margins from 27% in the three months ending March
31, 1997 to 40% for the same period of 1998. Increases in profit margins can be
attributed to CCC's ability to negotiate more favorable sales terms with various
of its suppliers. CCC's general & administrative (G&A) expenses also declined as
a percentage of sales from 39% in the three month period ending March 31, 1997
to 27% in the same period of 1998. Interest expenses were also reduced in 1998,
as CCC reduced outstanding indebtedness in March 1997. Profits before taxes as a
percentage of sales for the Company's operating subsidiaries were 3% for the
three months ending March 31, 1998 versus (20%) for the same period of 1997.
Cost of Goods Sold
The Company's cost of goods sold, consisting primarily of inventory,
increased from $ 798,939 during the three months ending March 31, 1997 to $
1,355,537 for the same period of 1998. Cost of goods as a percentage of sales
decrease from 74% in the three months ending March 31, 1997 to 68% in the same
period of 1998.
General and Administrative Expenses
The Company's general and administrative (G&A) expenses, consisting
primarily of wages, benefits and related expenses, increased from $ 522,370 in
the three months ending March 31, 1997 to $ 756,086 for the same period of 1998.
Approximately $ 95,000 is attributable to increased G&A at the Company's
subsidiary level. Approximately $ 138,000 of the G&A is attributable at the
parent level. As a percentage of sales, the G&A at the subsidiary level
decreased from 46% for the three month period ending March 31, 1997 to 30% for
the same period of 1998.
Purchase Order Backlog
As of March 31, 1998, Company's purchase order backlog was
approximately $ 1,155,000, compared to $ 1,568,000 for the same period of 1997.
A reduction of approximately 26.3% Generally order backlog represents orders
received from customers but not shipped typically at the request of the
customer. The Company believes that the reduction of purchase order backlog is
due to the acceleration of delivery dates by certain customers. The Company
monitors its purchase backlog to help analyze sales trends.
Interest Expense
The Company incurred $ 6,639 in interest expenses for the three months
ending March 31, 1998. For the same period of 1997, the Company had interest
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expense of $ 15,970. This reduction was due to a repayment of certain
outstanding indebtedness in March of 1997.
Liquidity
As of March 31, 1998, the Company had cash and cash equivalents of $
1,092,353 and marketable securities of $ 125,550. At March 31, 1997 the Company
had cash and cash equivalents of $ 223,467, certificates of deposit of $
1,695,287, and marketable securities of $ 94,063. The change in Company's
investment in cash, certificates of deposit, and securities reflects the
liquidation of certificates of deposit to fund cash needs of the Company. The
Company expects to use these funds as required for maintenance and expansion of
existing operations of CCC, UBC, and VBT.
On April 8, 1998, the Company commenced a private placement of 375,000
shares of Company common stock for $ 750,000. The proceeds from this private
placement are expected to be used for working capital.
Inflation
Company has not been materially effected by inflation, while the
Company does not anticipate inflation affecting the Company's operations,
increases in labor and supplies could impact the Company's ability to compete.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
(a) In April 8, 1998, the Company commenced a private placement of up
to 375,000 shares of the Company's common stock for $ 2.00 per share. All shares
are to be sold through officers and directors of the Company with all proceeds
going to the Company.
(b) On February 20, 1998, the Company issued to Mr. Steven Scott,
Executive Vice President of the Company, 50,000 shares of common stock, valued
at $ 2.25 per share, as consideration for services rendered to the Company.
Concurrently with the issuance of the foregoing shares, the Company granted to
Mr. Scott options to acquire an additional 50,000 shares of common stock
exercisable over a period of two years from the date of issuance, at an exercise
price of $ 5.00.
(c) On February 20, 1998, the Company issued to Mr. Tan Kim Wah,
Chairman of the Board, President and Chief Executive Officer, 100,000 shares of
common stock, valued at $ 2.25 per share, in lieu of accrued but unpaid salary
for fiscal 1997. An additional 75,000 shares of common stock were issued in
repayment of expenses and advances incurred by Mr. Tan on behalf of the Company.
Concurrently with the issuance of the foregoing shares, the Company granted to
Mr. Tan options to acquire 100,000 shares of common stock, which options are
excercisable over a period of two years from the date of issuance, at an
exercise price of $ 5.00 per share.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
None
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
On January 19, 1998, the Registrant filed a Report on Form 8-K
reporting that it had determined not to retain Deloitte & Touche, LLP as its
independent public accounts, as previously reported on June 27, 1997, but rather
to continue with its current independent public accountants, King Griffin &
Adamson, P.C. In this filing it was also reported that the Company had appointed
David Kaye as Chief Financial Officer of the Company, replacing Sadasuke Gomi,
the Company's secretary, who had held that office on a temporary basis.
On March 19, 1998, the Registrant filed a Report on Form 8-K reporting
that it had consummated the acquisition of 51% of newly-issued shares of common
stock of US Computer Group, Inc. of Farmingdale, New York.
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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.
Tech Electro Industries, Inc.
Date: May 19, 1998 /s/ WILLIAM KIM WAH TAN
-----------------------
William Kim Wah Tan
Chairman of the Board, President and
Chief Executive Officer
Date: May 19, 1998 /s/ DAVID KAYE
--------------
David Kaye
Chief Financial Officer and
Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
<CASH> 1,092,354
<SECURITIES> 125,550
<RECEIVABLES> 1,321,381
<ALLOWANCES> 0
<INVENTORY> 1,695,504
<CURRENT-ASSETS> 4,508,828
<PP&E> 656,450
<DEPRECIATION> 351,075
<TOTAL-ASSETS> 5,883,909
<CURRENT-LIABILITIES> 744,608
<BONDS> 0
0
298,534
<COMMON> 37,782
<OTHER-SE> 4,790,247
<TOTAL-LIABILITY-AND-EQUITY> 5,883,909
<SALES> 1,996,589
<TOTAL-REVENUES> 1,996,589
<CGS> 1,355,537
<TOTAL-COSTS> 756,086
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,639
<INCOME-PRETAX> (79,786)
<INCOME-TAX> 0
<INCOME-CONTINUING> (79,786)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79,786)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
