SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period
Ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the Transition
Period From _______ to ________.
Commission File Number 0-20986
EVTC, INC.
(Exact name of issuer as specified in its charter)
Delaware 22-3005943
--------------------------------------- ------------------------------
(State or other Jurisdiction (I.R.S. Employer
of incorporation or Organization) Identification No.)
121 South Norwood Drive
Hurst, Texas 76053
---------------------------------------- ------------------------------
(Address of Principal Executive Offices) (Zip Code)
(817)282-0022
---------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
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 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. XX Yes No
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
The number of shares outstanding of the registrant's common stock is
5,881,906(as of February 11, 2000).
<PAGE>
EVTC,INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31, September 30,
ASSETS
1999 1999
----------- ------------
Current Assets:
Cash and cash equivalents $ 95,211 $ 2,159,434
Marketable securities 54,460 54,460
Subscriptions receivable -- 594,600
Accounts receivable, net 4,298,999 7,475,772
Deferred income taxes 536,691 300,000
Income taxes receivable -- 58,108
Note receivable 250,000 --
Inventories 10,138,002 6,805,492
Other current assets 667,202 681,337
Assets of discontinued operations 955,869 1,098,760
---------- ----------
Total current assets 16,996,434 19,227,963
Property and equipment,net 1,319,062 1,401,036
Goodwill, net 499,545 511,829
Investments and other assets 398,568 437,964
Due from officer 371,016 371,016
---------- -----------
Total assets $19,584,625 $21,949,808
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Note payable to bank $ 750,000 $ 9,742,380
CIT revolving credit line 5,818,048 -
Accounts payable 3,576,824 2,387,771
Liabilities of discontinued operations 241,591 304,209
Accrued liabilities 1,257,530 1,137,212
---------- ----------
Total current liabilities 11,643,993 13,571,572
Stockholders' Equity
Common stock 58,115 57,825
Paid-in-capital 12,154,768 12,133,204
Accumulated other comprehensive
income 54,460 54,460
Retained deficit (4,326,711) (3,867,253)
---------- ----------
Total stockholders' equity 7,940,632 8,378,236
---------- ----------
Total liabilities and
stockholders' equity $19,584,625 $21,949,808
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
EVTC,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended December 31,
1999 1998
----------- -----------
Net sales $ 4,774,939 $ 4,533,038
Cost of sales 3,641,774 3,253,858
---------- ----------
Gross profit 1,133,165 1,279,180
Selling, general and
administrative expenses 1,594,451 1,859,303
---------- ----------
Operating loss (461,286) (580,123)
Interest expense 221,434 240,179
Other (income) expense, net 13,429 (7,689)
---------- ----------
Loss from continuing operations
before income taxes (696,149) (812,613)
Income tax expense (benefit) (236,691) -
----------- ----------
Discontinued equipment products
operations:
Loss from discontinued operations,
net of income taxes - -
Net loss $ (459,458) $ (812,613)
----------- ----------
Loss per share
Basic:
Continuing operations $ (0.08) $ (0.17)
Discontinued operations - -
----------- ----------
(0.08) (0.17)
Diluted:
Continuing operations $ (0.08) $ (0.17)
Discontinued operations - -
----------- ----------
(0.08) (0.17)
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
EVTC,INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended December 31,
1999 1998
------ ------
Cash Flows From Operating Activities:
Net loss $ (459,458) $ (812,613)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation and amortization 150,455 157,823
Changes in assets and liabilities:
Accounts receivable 3,216,893 2,254,873
Deferred Income Taxes (236,691) -
Income taxes receivable 58,108 18,259
Due from officer - (171,016)
Provision for bad debts (40,120) -
Inventory (3,332,510) (1,379,263)
Other current assets 14,135 (142,828)
Other assets - 179,629
Increase (Decrease) in liabilities:
Assets of discontinued operations 142,891 124,151
Liabilities of discontinued
operations (62,618) (121,316)
Accounts payable and accrued
liabilities 1,309,371 (135,139)
---------- --------
Net cash provided by (used in)
operating activities 760,456 (27,440)
Cash Flows From Investing Activities:
Capital expenditures (56,197) (6,191)
Note receivable due from afreegift.com (250,000) -
Change in investment in joint ventures
and other assets 39,396 -
---------- --------
Net cash used in investing activities (266,801) (6,191)
Cash Flows From Financing Activities:
Net payments on notes payable to bank (3,174,332) -
Collection of stock subscription 594,600 -
Proceeds from common stock options
exercised 21,854 -
---------- --------
Net cash provided by (used in)
financing activities (2,557,878) -
---------- --------
Net decrease in cash and
cash equivalents (2,064,223) (33,631)
Cash and cash equivalents - Beginning
of year 2,159,434 4,511,195
---------- --------
Cash and cash equivalents - End of
period $ 95,211 $ 4,477,564
========== ==========
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
EVTC,INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Nature Of Business And Significant Accounting Policies
EVTC, Inc. (the "Company") was incorporated under the name "Environmental
Technologies Corporation" under the laws of Delaware. In 1997, the Company
changed its corporate name to "EVTC, Inc." but continues to trade and do
business as "Environmental Technologies Corporation." The Company is currently
engaged in the marketing and sale of refrigerants, refrigerant reclaiming
services and recycling of fluorescent light ballasts and lamps. The Company also
manufactured and distributed refrigerant recycling and recovery equipment prior
to the discontinuation of such operations in July 1998.
The consolidated financial statements include the financial statements of
EVTC, Inc. and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
The financial information furnished herein has not been audited by
independent accountants; however in the opinion of management, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations and cash flows of
the Company for the three month period ended December 31, 1999 and December 31,
1998, respectively, have been made. The results of operations for the
three-month period ended December 31, 1999 are not necessarily indicative of the
results to be expected for the full year.
Note 2. Income Per Share
Net income (loss) per share in the first quarter of fiscal years 1999 and
1998 is computed on the basis of the weighted average number of common shares
outstanding in the period. The average number of common shares outstanding for
the three-month periods ended December 31, 1999 was 5,797,010 and 4,989,719
shares, respectively. The effect of dilutive options and warrants is immaterial.
<PAGE>
Note 3. Income Taxes
Income taxes are accounted for using the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
At September 30, 1999 the Company recorded a deferred tax asset of
approximately $3 million. This asset consisted mainly of reserves relating to
bad debts and inventory reported differently for financial reporting and tax
purposes, as well as net operating loss carryforwards. Operating losses
sustained in the first three months of fiscal 2000 increased the deferred tax
asset to approximately $3.2 million at December 31, 1999. Based on estimates of
recoverability of the deferred tax asset, the Company has recorded a valuation
allowance on the deferred tax asset of $2.7 million at September 30, 1999 and
December 31, 1999. Due to the valuation allowance placed on these assets, they
are reflected at $300,000 and $536,691 on the Company's September 30, 1999 and
December 31, 1999 consolidated balance sheet. The Company has available at
December 31, 1999 net operating loss carryforwards, for federal and state income
tax purposes, of $7,784,601 which are available to offset future federal and
state taxable income, if any, through 2019.
Note 4. Discontinued Operations
During July 1998, the Company's Board of Directors adopted a plan to
discontinue its Recycling and Recovery Equipment business segment. The Company
initiated a liquidation program to sell all assets of the segment. Management
intended for the disposal of the segment to be completed by June 30, 1999 (the
Phase-Out Period), however during fiscal 1999 those estimates were revised to
June 30, 2000. The Company has recast the accompanying consolidated statements
of operations to present the operating results of the Recycling and Recovery
Equipment business segment as discontinued operations. The accompanying
consolidated balance sheets segregate assets and liabilities of the discontinued
segment.
<PAGE>
Note 5. Significant Acquisitions
On October 15, 1999, the Company announced that it had signed a letter
of intent to acquire afreegift!com, inc., ("afreegift") an Oak Brook, Illinois
based internet direct marketing company.
On December 22, 1999, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with afreegift, a Nevada corporation, Sakoff
Enterprises, Inc., a Delaware corporation (the "Shareholder"), and Scott L.
Sakoff ("Sakoff"). Under the Agreement, afreegift will merge into e solutions
marketing, inc., ("e solutions") a new wholly owned subsidiary formed by the
Company in December of 1999 in exchange for common stock of the Company. The
purpose of the merger is to diversify the Company's business segments and to
take advantage of the burgeoning e-commerce industry. The transaction is
intended to qualify as a tax-free reorganization and will be accounted for using
the purchase method of accounting. The consummation of the transactions
contemplated by the Agreement is subject to approval by the Company's
stockholders. An annual meeting of the Company's stockholders will be called in
March for the purpose of seeking ratification and approval of the Agreement and
the transactions contemplated thereby. Subject to stockholder approval and
satisfaction of certain pre-closing conditions, the Shareholder will be entitled
to receive at the closing a number of shares of the Company's common stock to be
agreed upon prior to the closing and the right to receive additional shares of
the Company's common stock (the "Earn-Out Shares") upon satisfaction of certain
financial performance objectives. In no event shall the aggregate number of
shares to be issued at closing plus the Earn-Out Shares exceed 8,000,000.
If the merger is consummated, the Company expects to expand its board
of directors to seven members. The Shareholder will have the right to nominate
three members to the Company's board so long as the subsidiary meets specified
financial performance objectives. Also, at the closing of the merger, Sakoff
will enter into an employment agreement with e solutions under which he will
serve as President and Chief Executive Officer of e solutions. The employment
agreement will be for a term of 1 year. The Company is obligated to renew the
employment agreement for an additional one-year term upon e solutions meeting
certain performance goals.
Pending stockholder action on the merger, the Company is obligated to
lend $1,000,000 to afreegift at times specified in a funding agreement. In
<PAGE>
exchange, the Company will receive a note receivable from afreegift secured by
all of its assets. The note is to be repaid in a year and bears interest at 9%.
The obligations of the parties under the funding agreement and the note will
terminate upon the closing of the merger transaction.
The Company intends to launch its first permission marketing web site
in the Spring of 2000. The Company expects to formally close on the transaction
in the quarter ending March 31, 2000.
Note 6. Operating Segments
The Company has two reportable segments: refrigerant and ballast
recycling. The refrigerant segment is engaged in the marketing and sale of
refrigerants, as well as performing refrigerant reclaiming services. The
ballast-recycling segment is engaged in the recycling and disposal of
fluorescent lighting ballasts. Amounts under the Corporate caption are items not
directly attributable to a segment or items not allocated to the operating
segment in evaluating their performance.
There have been no intersegment sales for the three months ended
December 31, 1999 and December 31,1998, respectively.
The Company's reportable segment information for the three months ended
December 31, 1999 and December 31, 1998 is reported below.
<TABLE>
CONSOLIDATED BALLAST
PRODUCT RECYCLING CORPORATE CONSOLIDATED
------------ --------- --------- ------------
<S> <C> <C> <C> <C>
Three Months ended December
31, 1999:
Revenues from external customers $ 3,932,860 $842,079 $---------- $4,774,939
Segment income (loss), before
income taxes (394,381) 36,854 (338,622) (696,149)
Three Months ended December
31, 1998:
Revenues from external customers 3,634,854 898,184 ---------- 4,533,038
Segment income (loss), before
income taxes (449,365) 74,701 (437,949) (812,613)
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The Company's fiscal year-end is September 30.
The following discussion of results of operations for the three-month
period ended December 31, 1999 and should be read in conjunction with the
unaudited condensed financial statements, including notes thereto, included
elsewhere in this Report.
Three months ended December 31, 1999 as compared to the three months ended
December 31, 1998
Revenues for the three-month period ended December 31, 1999 were
approximately $4.77 million, as compared to revenues of approximately $4.53
million for the three-month period ended December 31, 1998, an increase of
approximately $.24 million, or 5.3%. The increase in sales is primarily
attributed to an increase in the amount of refrigerant reclaiming and commercial
HVAC refrigerant sales and R-134a sold during the period which more than offset
the decline in R-12 and R-22 sales. The decline in R-22 sales was attributable
to the decline in market price for the refrigerant based on the industry wide
excess supply of inventory carried over from last year. The decline in R-12
sales during this period is a result of the decline in demand for R-12 sales as
it is replaced by R-134a. Sales of refrigerant R-12 continue to provide a
significant portion of the Company's revenues, although its relative percentage
is declining. The Company's ability to maintain its current level of R-12, R-22
and R-134a sales for the foreseeable future will be dependent, to a large
extent, upon the availability of adequate sources of supply. The Company is not
dependent on any one source of refrigerant for its supply of R-12, R-22 or
R-134a refrigerant and historically has purchased from a number of manufacturers
and suppliers. The Company's refrigerant reclaiming and separation activities
will continue to serve as an important source of R-12, as well as other CFC and
non-CFC refrigerants.
The costs of sales for the three month period ended December 31, 1999 were
approximately $3.64 million, as compared to $3.25 million for the three-month
period ended December 31, 1998, an increase of approximately $.39 million, or
12%. This increase is the result of increased sales and decreased margins in the
HVAC refrigerant sales, primarily R-22, and a change in product mix in the
automotive refrigerant sales for the three month period this year compared to
last year. The Company's R-22 prices declined in excess of 10% for the three
<PAGE>
month period this year compared to last year, due to the industry wide excess
supply of R-22 inventory carried over from last year.
Selling, general, and administrative expenses for the three-month
period ended December 31, 1999 decreased $264,852 from the three-month period
ended December 31, 1998. The decrease is primarily attributable to the Company's
continued cost reduction initiatives started in the first quarter of 1999 in all
of the Company's business segments. The cost reduction efforts resulted in
approximately $132,000 savings for salaries, marketing and distribution expenses
associated with the Company's refrigerant business segments, $35,000 in salaries
and other marketing expenses associated with the ballast recycling segment, and
$97,000 in Corporate administrative expenses. Management anticipates the
benefits of the cost reduction program to have a continued impact throughout
fiscal 2000.
Based on estimates of recoverability of deferred tax assets, the
Company recorded a tax benefit of $236,691 for the operating loss for the three
month period ended December 31, 1999(See Note 3 - Income taxes in Notes to the
Consolidated Financial Statements).
The Company's operating results vary from period to period as a result
of weather conditions and the availability and price of refrigerant products
(virgin and reclaimable). The Company's business has historically been seasonal
in nature with peak sales of refrigerants occurring in the second and third
fiscal quarters. Accordingly, the first and fourth fiscal quarters of the
Company's operations have been characterized by inventory build-up and seasonal
operating losses resulting in periodic operating cash flow short falls. The
Company's results of operations for the three-month period ended December 31,
1999 may not necessarily be indicative of the Company's future operating
results.
Liquidity and Capital Resources
The Company had working capital of approximately $5.35 million at
December 31, 1999, as compared to working capital of approximately $5.66 million
at September 30, 1999. The Company had financed its working capital requirements
through operating cash flow and a working capital revolving line of credit
obtained from a bank (the "Bank Credit Facility"). On December 21, 1999 the
Company closed on a three-year $12.3 million long term Revolving Credit Facility
agreement with The CIT Group/Business Credit. The CIT Credit Facility provides
up to $12.3 million in financing based upon eligible accounts receivable,
inventory and equipment ("CIT Facility"). The long term CIT Facility replaced
the Bank Credit Facility, with the bank providing a short-term credit facility
<PAGE>
of $750,000 ("Bank Facility"). At December 31, 1999, the line of credit advance
balance from the CIT Facility was approximately $5.82 million and the balance
from the Bank Facility was $750,000. Borrowings outstanding under the CIT
Facility bear interest at the effective rate of prime plus .6% and borrowings
outstanding under the Bank Facility bear interest at the rate of 10%.
On July 28, 1999 the Company signed several stock subscription agreements
to sell and issue restricted shares of common stock to several private
investors. Proceeds from the sale of such stock were collected and used in
December for working capital and to pay down debt outstanding under the CIT
Facility.
As of December 31, 1999, the Company had a $371,016 note receivable from
George Cannan, Sr., the Company's founder, Chairman and principal stockholder.
This note receivable bears interest at 7% per annum and is secured by the 21,000
square foot building located at 550 James Street in Lakewood, New Jersey. In
January 2000 Mr. Cannan paid the note in full and the proceeds were used to pay
down the Company's short-term bank debt under the Bank Facility.
On October 1, 1999 the Company's board of directors voted to offer and sell
up to one million restricted shares of common stock to several private investors
for the sole purpose of providing working capital and short term financing that
would be required if the Company was successful in acquiring afreegift. The
offering price of such stock was set at approximately 85% of the prior five-day
average closing price of the common stock at October 1, 1999 or $1.00 per share.
With the signing of the formal agreement to purchase afreegift, on December 22,
1999, the Company is currently in the process of selling these shares.
Pending stockholder approval of the afreegift merger discussed above, the
Company is obligated to lend $1,000,000 to afreegift at times specified in a
funding agreement. In exchange, the Company will receive a note from afreegift
secured by all of its assets. The note is to be repaid in a year and bears
interest at 9%. The obligations of the parties under the funding agreement and
the note will terminate upon the closing of the merger transaction.
On January 24, 2000 the Company's refrigerant separation joint venture,
Liberty Technology International, Inc. ("Liberty") acquired the assets of
Refrigerant Recycling Technologies, Inc. ("RRT") located in Red Wing, Minnesota
for cash and the assumption of certain liabilities. In addition, the Company
signed a letter of intent with Concorde Science and Technology, Inc.
("Concorde") of Red Bank, New Jersey to acquire their 50% interest in Liberty in
<PAGE>
exchange for a specified number of shares of the Company's common stock. The
acquisition of Concorde's 50% interest in Liberty will make Liberty a wholly
owned subsidiary of the Company.
Net cash provided by operating activities for the three-month period ended
December 31,1999 was $760,456 compared to net cash used in operating activities
of $27,440 for the three-month period ended December 31, 1998. Accounts
receivable collections provided approximately $3.22 million in cash and
increased trade payables provided approximately $1.19 million used to increase
the Company's refrigerant inventory by $3.33 million. Net cash used in investing
activities was $266,801 and $6,191 for the three-month periods ended December
31, 1999 and 1998, respectively. The note receivable related to the investment
in afreegift accounted for $250,000 of the total cash used in investing
activities. The net cash used in financing activities during the three-month
period ended December 31, 1999 was $2,557,878 reflecting payments on the
Company's Credit Facility of $3,174,332 compared to $0 for the three-month
period ended December 31, 1998. The collection of $594,600 for subscription
stock was used to pay down debt outstanding under the CIT Facility.
The Company had cash and cash equivalents of $95,211 and $2,159,434 at
December 31, 1999 and September 30, 1999, respectively.
As of the date of this report, other than as set forth in this report, the
Company has no material commitments for capital expenditures, including in
connection with research and development, acquisition of plant and equipment,
additional employees or increases to inventory.
Year 2000
The Company has assessed the potential issues and costs associated with the
year 2000 and believe that it has addressed such issues. The Company has
implemented revisions to effect year 2000 compliance of all its accounting and
operations systems. The Company has reviewed year 2000 compliance issues with
its vendors, suppliers, and customers. At the present time, the Company believes
that costs or consequences of unforeseen issues would not result in the
occurrence of a material event or uncertainty reasonably likely to have a
material adverse effect on the Company. Subsequent to December 31, 1999 the
Company has not experienced any year 2000 issues that would require a Year 2000
remediation plan. If such issues develop the Company has the ability to commit
the necessary resources to complete a Year 2000 remediation plan on a timely
basis.
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
The principal market risks (i.e., the risk of loss arising from the adverse
changes in market rates and prices) to which the Company is exposed are interest
rates on the Company's debt and short-term investment portfolios. The Company
centrally manages its debt and investment portfolios considering investment
opportunities and risks, tax consequences and overall financing strategies. The
Company's investment portfolios consist of cash equivalents and short-term
marketable securities; accordingly, the carrying amounts approximate market
value. The Company's investments are not material to the financial position or
performance of the Company.
Assuming the current variable rate debt and investment levels, a one-point
change in interest rates would impact net interest expense by less than $60,000.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
On October 15, 1999 the Company filed on Form 8-K reporting the signing of
a letter of intent with afreegift.com, Inc.
On November 23, 1999 the Company filed on Form 8-K/A reporting the
appointment of BDO Seidman, LLP as its certifying accountants. The action was
recommended and approved by the audit committee of the Company.
On December 22, 1999 the Company filed on Form 8-K reporting an Agreement
and Plan of Reorganization (the "Agreement") with afreegift.com, Inc. a Nevada
corporation ("afreegift"), Sakoff Enterprises, Inc., a Delaware corporation (the
"Shareholder"), and Scott L. Sakoff ("Sakoff"). Under the terms of the
Agreement, afreegift will merge into the company's newly formed subsidiary, e
solutions marketing, inc. ("e solutions") in exchange for common stock of the
Company. Afreegift is an Oak Brook, Illinois based Internet direct marketing
company. The purpose of the merger is to diversify the Company's business
segments and to take advantage of the burgeoning e-commerce industry. The
transaction is intended to qualify as a tax-free reorganization.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EVTC,Inc.
Date: February 11, 2000 By: /s/ George Cannan
------------------------
Chief Executive Officer
/s/ David Keener
-------------------------
President and CFO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 95,211
<SECURITIES> 54,460
<RECEIVABLES> 4,298,999
<ALLOWANCES> 860,545
<INVENTORY> 10,138,002
<CURRENT-ASSETS> 16,996,434
<PP&E> 5,230,834
<DEPRECIATION> 3,911,772
<TOTAL-ASSETS> 19,584,625
<CURRENT-LIABILITIES> 11,643,993
<BONDS> 0
0
0
<COMMON> 58,115
<OTHER-SE> 7,940,632
<TOTAL-LIABILITY-AND-EQUITY> 19,584,625
<SALES> 4,774,939
<TOTAL-REVENUES> 4,774,939
<CGS> 3,641,774
<TOTAL-COSTS> 3,641,774
<OTHER-EXPENSES> 1,594,451
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 221,434
<INCOME-PRETAX> (696,149)
<INCOME-TAX> (236,691)
<INCOME-CONTINUING> (459,458)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (459,458)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
