<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ TO _______
Commission File Number 0-23152
MOBINETIX SYSTEMS, INC.
---------------------------------------------------------------
Exact Name of small business issuer as specified in its charter
DELAWARE 33-0253408
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 OAKMEAD PARKWAY, SUNNYVALE, CALIFORNIA 94086
------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (408) 524-4200
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 [ ]
Number of shares of issuer's common stock outstanding as of March 31, 1998:
1,943,264
Transitional Small Business Disclosure Format: Yes [ ] No [X]
================================================================================
<PAGE> 2
MOBINETIX SYSTEMS, INC.
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Consolidated Condensed Balance Sheet at March 31, 1999 3
Consolidated Condensed Statements of Operations for the
Three Months Ended March 31, 1999 and 1998 4
Consolidated Condensed Statements of Operations for the
Nine Months Ended March 31, 1999, and 1998 5
Consolidated Condensed Statements of Cash Flows for the
Nine Months Ended March 31, 1999 and 1998 6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signature 15
</TABLE>
2
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PART I: FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MOBINETIX SYSTEMS, INC.
CONSOLIDATED CONDENSED BALANCE SHEET (unaudited)
as of March 31, 1999
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and equivalents $ 2,790,515
Accounts receivable, net 4,617,335
Inventories, net 1,462,096
Prepaid expenses and other current assets 250,919
------------
Total current assets 9,120,865
------------
Property and equipment 800,837
Less: Accumulated depreciation (478,525)
------------
Property and equipment, net 322,312
------------
Total assets $ 9,443,177
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,347,092
Accrued liabilities and other 597,118
Notes payable 400,000
Deferred revenues 452,596
------------
Total current liabilities 2,796,806
------------
Stockholders' equity:
Series B convertible Preferred Stock 700
Series C convertible Preferred Stock 28
Series D convertible Preferred Stock 1,273
Common stock 1,944
Additional paid-in capital 15,088,827
Accumulated deficit (8,446,401)
------------
Total stockholders' equity 6,646,371
------------
Total liabilities and stockholders' equity $ 9,443,177
============
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE> 4
MOBINETIX SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Revenues $ 5,144,343 $ 2,456,159
Cost of revenues 2,814,653 1,414,231
----------- -----------
Gross margin 2,329,690 1,041,928
----------- -----------
Operating expenses:
Selling, general and administrative 1,227,420 952,464
Research and development 1,018,620 758,973
----------- -----------
Total operating expenses 2,246,040 1,711,437
----------- -----------
Operating income/(loss) 83,650 (669,509)
Interest expenses and other -- (189,229)
Interest income 43,000 30,121
----------- -----------
Income/(loss) before income taxes 126,650 (828,617)
Income taxes 19,200 --
----------- -----------
Net income/(loss) $ 107,450 $ (828,617)
=========== ===========
Net income/(loss) per share (note 2)
Basic $ 0.06 $ (0.52)
Diluted $ 0.02 $ (0.52)
Weighted average shares outstanding
Basic 1,924,589 1,581,873
Diluted 6,310,841 1,581,873
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
MOBINETIX SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited)
FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Revenues $ 15,252,249 $ 6,355,442
Cost of revenues 8,447,868 3,714,883
------------ ------------
Gross margin 6,804,381 2,640,559
------------ ------------
Operating expenses:
Selling, general and administrative 3,541,417 2,444,569
Research and development 2,782,918 2,192,549
------------ ------------
Total operating expenses 6,324,335 4,637,118
------------ ------------
Operating income/(loss) 480,046 (1,996,559)
Interest expenses and other (61,962) (211,927)
Interest income 168,094 73,791
------------ ------------
Income/(loss) before income taxes 586,178 (2,134,695)
Income taxes 20,463 --
------------ ------------
Net income/(loss) $ 565,715 $ (2,134,695)
============ ============
Net income/(loss) per share (note 2)
Basic $ 0.29 $ (1.44)
Diluted $ 0.09 $ (1.44)
Weighted average shares outstanding
Basic 1,920,917 1,486,681
Diluted 6,236,665 1,486,681
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
MOBINETIX SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Net cash used in operating activities $(3,649,831) $ (446,831)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (135,357) (89,275)
----------- -----------
Net cash used in investing activities (135,357) (89,275)
----------- -----------
Cash flows from financing activities:
Proceeds from sale of Common Stock -- 624,231
Borrowings - notes payable 400,000 2,320,195
Repayment of debt under a line of credit (290,195) (280,000)
----------- -----------
Net cash provided by financing activities 109,805 2,664,426
----------- -----------
Net (decrease)/increase in cash and
cash equivalents (3,675,383) 2,128,320
Cash and cash equivalents at beginning
of period 6,465,898 3,421,489
----------- -----------
Cash and cash equivalents at end
of period $ 2,790,515 $ 5,549,809
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes 42,863 --
Cash paid for interest 3,423 91,291
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
MOBINETIX SYSTEMS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The financial information included herein for the three and nine month periods
ended March 31, 1999 and 1998 is unaudited; however, such information reflects
all adjustments consisting only of normal recurring adjustments which are, in
the opinion of management, necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods.
The interim consolidated financial statements presented herein have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB. These interim
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Form 10-KSB of
MobiNetix Systems, Inc. (the "Company") for the year ended June 30, 1998.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.
2. NET INCOME/(LOSS) PER SHARE
Basic net income/(loss) per share is computed by dividing net income/(loss)
available to common stockholders (numerator) by the weighted average number of
common shares outstanding (denominator) during the period and excludes the
dilutive effect of stock options and convertible securities. Diluted net
income/(loss) per share gives effect to all dilutive common shares and other
dilutive securities outstanding during the period, including the assumed
conversion of the Preferred Stock into Common Stock using the if converted
method. In computing diluted net income per share, the average stock price for
the period is used in determining the number of shares assumed to be purchased
from exercise of stock options.
The following table sets forth the computation of basic and diluted earnings per
share for the three and nine month periods ended March 31, 1999 and 1998 as
follows:
7
<PAGE> 8
<TABLE>
<CAPTION>
Three Months end March 31 Nine Months end March 31
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator for basic and
diluted earnings per
share - net income/(loss) $ 107,450 $ (828,617) $ 565,715 $(2,134,695)
--------------------------- ---------------------------
Denominator for basic
earnings per share -
weighted average Common
shares 1,924,589 1,581,873 1,920,917 1,486,681
Effect of dilutive securities
Series B Preferred Stock 1,433,817 -- 1,444,388 --
Series C Preferred Stock 1,150,307 -- 1,150,307 --
Series D Preferred Stock 1,273,149 -- 1,273,149 --
Employee stock options and
warrants 528,979 -- 447,904 --
--------------------------- ---------------------------
Denominator for diluted
earnings per share
adjusted weighted average
shares 6,310,841 1,581,873 6,236,665 1,486,681
--------------------------- ---------------------------
Income/(loss) per share
Basic $ 0.06 $ (0.52) $ 0.29 $ (1.44)
Diluted $ 0.02 $ (0.52) $ 0.09 $ (1.44)
Potentially dilutive
securities excluded from
computations as the effect
would be antidilutive -- 2,872,966 -- 2,968,158
</TABLE>
3. INVENTORIES
Classification of inventories is as follows:
<TABLE>
<CAPTION>
March 31, 1999
--------------
<S> <C>
Finished goods $ 160,501
Work in process 467,526
Raw materials 834,069
----------
Total $1,462,096
==========
</TABLE>
8
<PAGE> 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the accompanying
unaudited consolidated financial statements of MobiNetix Systems, Inc. and its
wholly owned subsidiary PenWare, Inc., including the notes thereto (see Part I,
Item 1).
This quarterly report on Form 10-QSB ("Form 10-QSB") for MobiNetix Systems, Inc.
(the "Company") contains forward-looking statements made within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act of 1934, as amended. Words such as "anticipates," "expects,"
"intends," "plans," "seeks," "estimates," and similar expressions identify such
forward looking statements. These statements are not guarantees of future
performance and are subject to certain risks and uncertainties that could cause
actual results to differ materially from those expressed or forecasted. Factors
that might cause such a difference include, but are not limited to, those
discussed in the section entitled "Business," "Operating Results," "Liquidity
and Capital Resources," and "Outlook" on pages 3-5 and 7-9 in the annual report
on Form 10-KSB ("Annual Report") filed with the Securities and Exchange
Commission("Commission") on September 29, 1998. Readers should not rely unduly
on forward-looking statements, which reflect only the opinion of the Company's
management as of the date hereof. Unless required by law, the Company undertakes
no obligation to revise forward-looking statements. Readers should also
carefully review the risk factors set forth in other reports or documents the
Company files from time to time with the Commission, particularly the quarterly
reports on Form 10-QSB, and any current reports on Form 8-K.
RESULTS OF OPERATIONS (THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE
MONTHS ENDED MARCH 31 1998)
The 109% increase in revenues from the third quarter of fiscal 1998 (three
months ended March 31, 1998) to the third quarter of fiscal 1999 (three months
ended March 31, 1999) is largely due to continued strong sales of the Company's
advanced PenWare 3100 inter-active electronic transaction terminals including
significant shipments to Federated Department Stores, Inc.("Federated"), IBM
under a subcontract with U.S. Postal Services, and America Retail Group. The
Company has substantially completed and shipped the initial order by Federated
under a System Acquisition Agreement between Federated and the Company dated
March 16, 1998. The Company will continue to service this account and to attract
other national retail chain stores to use similar systems and services. However,
there are no assurances that the Company will receive any orders from these
customers.
Cost of sales increased by 99% in the third quarter of fiscal 1999 compared with
the third quarter of fiscal 1998, mainly due to higher unit volumes shipped in
the period. Gross margin increased from 42.4% in third quarter of fiscal 1998 to
45.3% in the third quarter of 1999 due to lower costs of components.
9
<PAGE> 10
Selling, general and administrative expenses increased by 29% from third quarter
of fiscal 1998 to the third quarter of fiscal 1999. The increase is largely the
result of higher personnel expenses to support business growth, including
targeted new hiring of employees in such areas as sales and marketing,
purchasing and production control.
The 34% increase in research and development expenses in the third quarter of
fiscal 1999 is attributable to the increase in number of Company personnel. The
Company continued to expand its engineering staff during the third quarter of
fiscal 1999 to enable the design, development and production ramp of interactive
transaction terminal products and software solutions. The Company also increased
research and development expenses in developing strategic alliances with its
existing customers to leverage the flexibility provided by the PenWare 3100
product line and the internet. However, there can be no assurance that these
developments will provide additional revenues to the Company.
RESULTS OF OPERATIONS (NINE MONTHS ENDED MARCH 1999 COMPARED TO NINE MONTHS
ENDED MARCH 1998)
Changes in revenues, costs and expenses from the first nine months of fiscal
1998 to nine months of fiscal 1999 are the result of the same factors and trends
as those outlined above for the three-month comparison period factoring in the
seasonal fluctuation of the Company's business.
In addition, the Company opened a software research and development center in
Sri Lanka, an Asian Pacific country, in the second quarter of fiscal 1999, in an
effort to reduce the increasing research and development expenses and to take
advantage of the rich human resources in software development in these Asian
Pacific countries. The Company also hired technical consultants in area of
designing and testing in India during the second quarter of fiscal 1999.
CASH AND SOURCES OF LIQUIDITY
The Company's operating activities consumed $3,649,831 in cash during the nine
months ended March 31 1999, compared to $446,831 (which was partially offset by
customer prepayment of $5 million in February 1998,) during the nine months
ended March 31 1998. Excluding the prepayment by customer in February 1998, the
Company's cash flow from operating activities consumed 33% less cash reflecting
the improved profitability of the operations in fiscal 1999.
The Company's financing activities generated a inflow of $109,805 in the nine
months ended March 31, 1999 compared to cash inflow of $2,664,426 in the nine
months ended March 31, 1998. The inflow of cash was due to the borrowing of
$400,000 under a line of credit with a commercial bank in March 1999 offset
partly by the re-payment of $290,195 indebtedness under the same line of credit
in July 1998. The inflow of cash in the nine month of fiscal 1998 was due to
borrowing of $2,320,195 under the line of credit offset partly by re-payment of
$280,000 in March 1998 and proceeds of $624,231 from sale of Common Stock. As of
March 31, 1999,
10
<PAGE> 11
the Company's principal sources of liquidity included cash of $2.8 million and
remaining funds available under its $3.0 million line of credit, which is
subject to borrowing base formulas and other conditions. The line of credit
expires July 15, 1999.
OUTLOOK
With the cash on hand and the existing credit facilities, the Company believes
that it will not require additional financing for fiscal 1999. However, the
Company may pursue other debt or equity transactions which upon completion,
would provide additional financing for future expansion. There is no assurance
that additional funding will be available.
The Company expects revenues in the near term to be largely dependent upon sales
to several large customers and to be largely derived from sales of Penware3100.
Sales trends are inherently difficult to predict at this stage of development.
Sales forecast shortfalls, delayed product introductions, and manufacturing and
financing constraints, together with other risk factors, could lead to adverse
fluctuations in revenues and profits in any particular quarter.
The Company purchases the majority of its materials and services in U.S.
dollars, and most of its foreign sales are transacted in U.S. dollars. The
Company did not hold or purchase any foreign exchange contracts for the purchase
or sale of foreign currencies. The Company may choose to enter into such
contracts from time to time should conditions appear favorable. Effects of
inflation on Company's financial results have not been significant.
RISK FACTORS AFFECTING THE COMPANY'S BUSINESS, OPERATING RESULTS AND FINANCIAL
CONDITION
In addition to other information in this Form 10-QSB and the risk factors
discussed in the Company's latest Annual Report filed with the Commission,
investors evaluating the Company and its business should carefully consider the
following risk factors, which may have a significant impact on the Company's
business, operating results and financial condition. The risk factors set forth
below and elsewhere in this Form 10-QSB and in the Company's Annual Report could
cause actual results to differ materially from those projected in any
forward-looking statements. These risk factors include but are not limited to
the following;
Unpredictable and fluctuating operating results; The Company has yet to sustain
consistent profitability and sales trends are inherently difficult to predict at
this stage of development. Sales forecast shortfalls, delayed product
introductions, and manufacturing and financing constraints, together with other
risk factors, could lead to adverse fluctuations in revenues and profits in any
particular quarter.
11
<PAGE> 12
Highly competitive markets and rapidly developing and changing technologies and
market condition; The Point-of-Sale device market is constantly changing. These
changes include, among others: rapid technological advances; evolving industry
standards in electronic fund transfer and point-of-sale products; changes in
customer requirements; and frequent new product introductions and enhancements.
The Company may not successfully keep up with the new products and technological
advances of others. If the Company is not able to develop and market new
products and product enhancements that achieve market acceptance on a timely and
cost effective basis, it could materially and adversely affect the Company's
business, financial condition and results of operations.
Dependency on large customers; The Company relies upon large retail customers
with a large number of point-of-sale terminals for a significant percentage of
our revenues. The Company continues to diversify its customer base by developing
strategic alliances and partnerships to open more distribution channels and
limit its reliance on large customers. While the Company continues to transact
business with its current customers and attract new ones, the Company's revenues
will decrease significantly if it loses a large customer. Furthermore, there are
no assurances the Company will be successful in attracting new customers.
Claims of infringement on others' proprietary rights; Although the Company
believes that its services and products do not infringe on the intellectual
property rights of others, the Company can not prevent someone else from
asserting a claim against the Company in the future for violating their
technology rights. Third parties making infringement claims may have
significantly greater resources than the Company does to pursue litigation, and
the Company cannot be certain that it would prevail in an infringement action.
The Company received a letter of inquiry from NCR Corporation ("NCR") accusing
the Company of infringing on certain NCR Patents. This matter is under
investigation by the Company's Legal Counsel.
Single component manufacturer/suppliers; the Company depends on other
manufacturers and suppliers for some of its products and certain components used
in our products. The components it obtains from other manufacturers and
suppliers are only available from a limited number of sources. Certain
components and products are currently purchased from single supplier. While the
Company maintains sufficient inventory of certain products and continually
evaluate alternative sources of supply, the failure of any such single supplier
to meet its commitment on schedule could adversely affect the Company.
Ability to attract and retain key personnel; the Company's future performance
depends upon the continued service of a number of senior management and key
technical personnel. The loss or interruption of the services of one or more key
employees could have a material adverse effect on our business, financial
condition and results of operations. The Company's future also will depend upon
its ability to attract and retain highly skilled technical, managerial and
marketing personnel. Competition for qualified personnel is significant and
intense, and is likely to intensify in the future. The Company competes for
qualified personnel against numerous companies, including larger, more
established companies with significantly greater financial resources than the
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<PAGE> 13
Company's. Significant competition exists for such personnel. If the Company is
unable to hire and retain qualified personnel in the future, it could materially
and adversely affect its business, financial condition and results of
operations.
YEAR 2000 ISSUE
The Year 2000 issue arises from the fact that most computer software programs
have been written using two digits rather than four to represent a specific
year. Any 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 miscalculation causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar normal business activities. During the first half of fiscal
1999, the Company began a Year 2000 assessment of its management information
system, other information technology systems, non-information technology
systems, products and key suppliers. Items identified and under review include
manufacturing and test equipment, telecommunications systems and equipment and
computer systems and equipment. In addition, the Company is assessing the Year
2000 compliance of its products. The Company intends to have its Year 2000
assessment, testing, remediation efforts and development of necessary
contingency plans completed by the year 2000, the total cost of which has not
yet been determined. To date, however, costs incurred to address Year 2000
compliance issues have not been material. Costs related to Year 2000 compliance
issues continue to be funded through operating cash flows. The Company has
initiated formal communications with all of 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. There can be no
assurance that the Company will be able to complete its Year 2000 compliance
assessment, testing, remediation efforts and development of necessary
contingency plans by the Year 2000. Any failure to complete the Year 2000
assessment, testing, remediation efforts and development of necessary
contingency plans prior to January 2000 could have a material adverse effect on
the Company's business, financial condition and results of operations.
NEW ACCOUNTING REQUIREMENTS
As of July 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income"("SFAS 130"). SFAS 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
SFAS 130 had no impact on the Company's net income or stockholders' equity.
In June 1997, the FASB issued SFAS 131, "Disclosures About Segments of an
Enterprise and Related Information" which becomes effective for fiscal years
beginning after December 15, 1997. Adoption of SFAS 131 had no material impact
on the Company's consolidated financial position, results of operations or cash
flow.
13
<PAGE> 14
FUTURE ACCOUNTING REQUIREMENTS
Also in June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging
Activities," which the Company will be required to adopt for fiscal year 2000.
This statement establishes a new model for accounting for derivatives and
hedging activities. Under FAS 133, all derivatives must be recognized as assets
and liabilities and measured at fair value. The Company has not determined the
impact of the adoption of this new accounting standard on its consolidated
financial position or results of operations.
14
<PAGE> 15
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MOBINETIX SYSTEMS, INC.
Date: May 14, 1999 By: /s/ DAVID M. LICURSE, SR.
------------------------------
David M. Licurse, Sr.
Chief Financial Officer and
Vice President of Operations
(principal accounting officer)
15
<PAGE> 16
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 2,790,515
<SECURITIES> 0
<RECEIVABLES> 4,832,204
<ALLOWANCES> 214,869
<INVENTORY> 1,462,096
<CURRENT-ASSETS> 9,120,865
<PP&E> 800,837
<DEPRECIATION> 478,525
<TOTAL-ASSETS> 9,443,177
<CURRENT-LIABILITIES> 2,796,806
<BONDS> 0
0
2,001
<COMMON> 1,944
<OTHER-SE> 6,642,426
<TOTAL-LIABILITY-AND-EQUITY> 9,443,177
<SALES> 15,252,249
<TOTAL-REVENUES> 15,252,249
<CGS> 8,447,868
<TOTAL-COSTS> 8,447,868
<OTHER-EXPENSES> 6,324,335
<LOSS-PROVISION> 155,506
<INTEREST-EXPENSE> 3,432
<INCOME-PRETAX> 586,178
<INCOME-TAX> 20,463
<INCOME-CONTINUING> 565,715
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 565,715
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.09
</TABLE>
