UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-14731
COMPUTER MARKETPLACE, INC.
--------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 35-0558415
--------------------------------- --------------------------------
(State of or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1490 Railroad Street
Corona, California 91720
------------------------
(Address of Principal Executive Offices) (Zip Code)
(909) 735-2102
--------------
(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 for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
As of November 12, 1996, 8,114,542 shares of the issuer's common stock were
outstanding.
This report contains 15 pages.
PAGE>
(2)
Computer Marketplace, Inc. and Subsidiaries
Form 10-QSB
Index
Page
PART I. Financial Information: No.
Condensed Consolidated Balance Sheet as of September 30, 1996... 3
Condensed Consolidated Statements of Operations for the three
month periods ended September 30, 1996 and 1995............. 4
Condensed Consolidated Statements of Cash Flows for the three
month periods ended September 30, 1996 and 1995............. 5-6
Notes to Condensed Consolidated Financial Statements............ 7-9
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 10-13
PART II. Other Information:
Exhibits and Reports on Form 8-K................................ 14
Signature....................................................... 15
<PAGE>
<TABLE>
<CAPTION>
(3)
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Computer Marketplace, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
September 30, 1996
(Unaudited)
<S> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 525,234
Accounts receivable, less allowance for
doubtful accounts of $97,622 3,387,376
Inventory, net (note 2) 2,664,627
Notes receivable - related parties 277,045
Other current assets 341,046
-----------
Total current assets 7,195,328
Property held for sale, net (note 3) 2,170,210
Property and equipment, net (note 3) 837,908
Other assets 69,986
-----------
Total assets $ 10,273,432
===========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Notes payable (note 4) $ 2,011,487
Accounts payable 2,367,539
Accrued payroll and payroll related liabilities 210,422
Current portion of long-term debt 56,232
Other current liabilities 173,726
-----------
Total current liabilities 4,819,406
Long-term debt 1,519,507
Other liabilities 91,060
Commitments and contingencies (note 5)
Stockholders' equity:
Preferred stock - $.0001 par value, 1,000,000 shares
authorized, no shares issued and outstanding
Common stock - $.0001 par value, 50,000,000 shares
authorized, 8,114,542 shares issued and outstanding 811
Capital in excess of par value 6,906,593
Accumulated deficit (3,063,945)
-----------
Total stockholders' equity 3,843,459
-----------
Total liabilities and stockholders' equity $ 10,273,432
===========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(4)
Computer Marketplace, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
September 30,
1996 1995
----------- -----------
<S> <C> <C>
Revenues -
Product sales, rental, service and other $ 7,179,879 $ 6,532,703
Cost and expenses:
Cost of revenues -
Product sales, rental, service and other 6,259,661 5,628,287
Selling, general and administrative 1,259,830 1,224,239
----------- -----------
7,519,491 6,852,526
----------- -----------
Operating loss (339,612) (319,823)
----------- -----------
Other income (expense):
Interest expense (115,510) (76,185)
Interest income 234 794
Miscellaneous income 9,491 987
----------- -----------
(105,785) (74,404)
----------- -----------
Loss before income taxes (445,397) (394,227)
Provision for income taxes - -
----------- ----------
Net loss $ (445,397) $ (394,227)
=========== ===========
Net loss per share $ (0.05) $ (0.05)
=========== ===========
Weighted average common shares outstanding 8,114,542 8,114,542
=========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(5)
Computer Marketplace, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
September 30,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (445,397) $ (394,227)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 67,161 62,922
Provisions for losses on accounts receivable (10,842) (8,900)
Provisions for losses on inventory 30,000 14,905
Other valuation provisions - (901)
Write-off of other assets - 1,278
Other - (692)
Changes in assets and liabilities:
Accounts receivable (330,794) 30,290
Inventory 550,721 125,868
Other current assets 53,702 69,498
Accounts payable 362,683 (494,260)
Accrued payroll and related liabilities (84,771) (104,476)
Other current liabilities (91,669) 29,392
---------- ----------
Net cash provided by (used in) operating activities 100,794 (669,303)
---------- -----------
Cash flows from investing activities:
Decrease in notes receivable - related parties 18,699 4,680
Purchase of property and equipment (9,375) (184,513)
Proceeds from sale of equipment - 10,775
Increase in other assets (2,432) (30,995)
---------- ----------
Net cash provided by (used in) investing activities 6,892 (200,053)
---------- ----------
Cash flows from financing activities:
Net (decrease) increase in notes payable (163,354) 165,409
Proceeds from long-term debt - 21,255
Payments on long-term debt (14,019) (16,303)
---------- ----------
Net cash provided by (used in) financing activities (177,373) 170,361
---------- ----------
(continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(6)
Computer Marketplace, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows, Continued
(Unaudited)
Three months ended
September 30,
1996 1995
---------- ----------
<S> <C> <C>
Decrease in cash and cash equivalents $ (69,687) $ (698,995)
---------- ----------
Cash and cash equivalents, beginning of period 594,921 747,665
---------- ----------
Cash and cash equivalents, end of period $ 525,234 $ 48,670
========== ==========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 115,046 $ 69,185
<FN>
Supplemental disclosures of non-cash operating activities:
During the quarter ended September 30, 1996 $45,431 of other liabilities
were reclassified to accounts payable, and fixed assets with a net book
value of $93,511 were reclassified to inventory.
In September 1995, $274,235 of accounts payable were reclassified to other
liabilities to reflect the negotiated payment terms.
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
(7)
Computer Marketplace, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1.BASIS OF PRESENTATION
---------------------
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements include all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the
consolidated financial position of Computer Marketplace, Inc. and
subsidiaries (the "Company") as of September 30, 1996, the consolidated
results of its operations for the three month periods ending September 30,
1996 and 1995 and its cash flows for the three month periods ending
September 30, 1996 and 1995. Although the Company believes that the
disclosures in these financial statements are adequate to make the
information presented not misleading, certain information and footnote
information normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission. Results of operations for the period ended September 30, 1996
are not necessarily indicative of results to be expected for the full year.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Form 10-KSB for the year ended
June 30, 1996.
Certain amounts in the three month period ended September 30, 1995 condensed
consolidated financial statements have been reclassified to conform to the
current presentation.
2.INVENTORY
---------
Computer Medical
Products Products Total
---------- ---------- ----------
Inventory $ 1,552,556 $ 366,298 $ 1,918,854
Inventory on short-term rental 996,989 - 996,989
---------- ---------- ---------
2,549,545 366,298 2,915,843
Less inventory valuation allowance 251,216 - 251,216
---------- ---------- ---------
Inventory, net $ 2,298,329 $ 366,298 $ 2,664,627
========== ========== ==========
Inventory on short-term rental consists of new and previously owned computer-
related equipment which is typically rented to customers for a few months to
fulfill their temporary computing needs. The Company, based on the
satisfactory economics of the transaction, will allocate existing inventory to
the transaction if the product is available in-house, or purchase the
equipment to meet the customer's needs. At the expiration of the rental
period, upon the return of the equipment to the Company, the equipment is re-
marketed for sale along with similar equipment in the Company's inventory.
The Company charges operations for an estimate of the inventory's valuation
decrease while it is on temporary rental. Net increases to the inventory
valuation allowance were $30,000 for each of the three month periods ending
September 30, 1996 and 1995, respectively.
<PAGE>
(8)
Computer Marketplace, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
3.PROPERTY AND EQUIPMENT
----------------------
Property and equipment at September 30, 1996 consists of the following:
Land $ 53,750
Buildings and property improvements 252,816
Machinery and equipment 794,951
Furniture and fixtures 147,503
Automobiles and trucks 167,508
Long-term rental 16,513
-----------
1,433,041
Less accumulated depreciation 595,133
-----------
Property and equipment, net $ 837,908
===========
PROPERTY HELD FOR SALE
----------------------
Property held for sale consists of the fifty percent (50%) Company owned
facility at 205 East Fifth Street in Corona, California and the Company's
main facility located at 1490 Railroad Street in Corona. Accumulated
depreciation associated with the two facilities at September 30, 1996 was
$23,475 and $130,045, respectively. The decision to classify this property
as held for sale was made at June 30, 1996.
4.NOTES PAYABLE
-------------
In September 1995, the Company entered into a revolving credit facility
agreement ("Credit Facility") with a financing company. The Credit Facility
allows the Company to borrow up to $2,500,000 and bears interest at a rate
of 2.25% above the lender's "reference rate" (as defined). The borrowing
capacity under the Credit Facility is dependent upon "eligible" (as defined)
accounts receivable and inventory, and fluctuates daily. At September 30,
1996 borrowings under the Credit Facility and additional amounts available
for borrowing under the Credit Facility were $2,011,487 and $458,407
respectively. The Credit Facility is collateralized by substantially all of
the Company's assets, except for real property. The Credit Facility expires
on September 30, 1997, but is automatically renewed for an additional one
(1) year term unless either party provides written notice to the other party
of the desire to cancel the Credit Facility.
<PAGE>
(9)
Computer Marketplace, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5.COMMITMENTS AND CONTINGENCIES
-----------------------------
On November 11, 1996, the Company's Board of Directors approved the
anticipated issuance of 500,000 Units, each Unit to be comprised of one (1)
share of Medical Marketplace, Inc., the Company's wholly owned subsidiary
and eighteen (18) Class D Common Stock Purchase Warrants (the "Class D
Warrants"). It is anticipated that each Unit will be offered for $2.00 on a
firm commitment basis by Biltmore Securities, Inc., as the Company's
placement agent. Each Class D Warrant will be exercisable over a one (1)
year period commencing three (3) months following the date of issuance.
Each Class D Warrant will entitle the holder to purchase one (1) share of
the Company's Common Stock at an exercise price of $.417 per share. Each
Class D Warrant will be redeemable if the Company's Common Stock equals or
exceeds $5.00 per share for any twenty (20) trading days during a period of
thirty (30) trading days. The Unit holders will also be granted certain
demand and piggyback registration rights.
In connection with the private placement, the Company expects to enter into
a three (3) year consulting agreement with Biltmore Securities, Inc. (or any
affiliate thereof), for assistance with corporate finance issues and
evaluations of possible business partners. The compensation for these
services consists of stock options to purchase 6,000,000 shares of the
Company's Common Stock at an exercise price of $.167 per share. These stock
options are exercisable for a period commencing upon the consummation by
Biltmore Securities, Inc. (or any affiliate thereof), of a financing which
provides gross proceeds of approximately $1,000,000 and terminating on the
fifth anniversary of the financing date. In addition, the consulting
agreement provides that if the Company consummates either an acquisition of
one or more businesses introduced to the Company by Biltmore Securities,
Inc. (or any affiliate thereof), which have in the aggregate net assets of
not less than $2,500,000 or the divestiture of assets outside the ordinary
course of business to a purchaser introduced to the Company by Biltmore
Securities, Inc. (or any affiliate thereof), resulting in net proceeds to
the Company of not less than $2,500,000 then Biltmore Securities, Inc. (or
any affiliate thereof), shall be entitled to receive 1,000,000 shares of
Company Common Stock simultaneously with the closing of such transaction.
Following the proposed private placement of the Company's securities, the
Company anticipates requesting that the Company's stockholders approve a 1-
for-6 reverse stock split with respect to the issued and outstanding shares
of the Company's Common Stock.
<PAGE>
(10)
PART I. FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
- ---------------------
The following information should be read in conjunction with the condensed
consolidated financial statements and the notes thereto included in this
Quarterly Report and in the audited Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10-KSB for the fiscal year ended
June 30, 1996.
QUARTER ENDED SEPTEMBER 30, 1996 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1995
- -----------------------------------------------------------------------------
Total revenues for the quarter ended September 30, 1996 were $7,179,879
compared to $6,532,703 for the quarter ended September 30, 1995. This
represents an increase of $647,176 or 10%.
Revenues from computer product sales and rentals for the quarter ended
September 30, 1996 totaled $4,798,741 a $1,672,512 or 26% decrease compared to
$6,471,253 for the quarter ended September 30, 1995. The sales decrease is
reflective of a general industry sales decrease which results in part from
price reductions in new computer hardware which negatively impacts selling
prices and sales of used computer hardware. The Company anticipates the lower
computer products sales trend to continue into the second quarter.
Medical product sales and rentals contributed $2,381,138 in revenues for the
quarter ended September 30, 1996, compared to $61,450 for the quarter ended
September 30, 1995. The current quarter's results were favorably affected by
two sales which aggregated in excess of $1,500,000. Continuing investments
made by Medical Marketplace, Inc. in experienced sales representatives and
technical staff, as well as a growing recognition within the industry as an
established reseller of previously owned and upgraded magnetic resonance
imaging, computed tomography scanner and ultrasound equipment have positively
impacted the sales of this subsidiary. Continued growth and sustained
profitability for this subsidiary are expected into the next quarter.
Previously owned medical equipment is just beginning to gain acceptance in the
health care community as a cost effective alternative to new equipment. The
Company believes that its field representative program, financial strength and
support structure will provide Medical Marketplace, Inc. a distinct advantage
over many of the subsidiary's competitors.
Total aggregate cost of revenues for the quarter ended September 30, 1996 and
1995 were $6,259,661 or 87% of revenues and $5,628,287 or 86% of revenues,
respectively. Cost of revenue percentages are expected to remain relatively
stable during the next fiscal year with small decreases anticipated. Factors
which will favorably reduce the cost of revenues percentage include; a Company
focus toward higher margin transactions through a focus on our end user
customer base, a change in computer sales representative compensation plans
which includes a substantially higher base salary and less of a commission
component than prior periods and the positive effect that higher margin
medical equipment sales has on the consolidated percentage.
<PAGE>
(11)
Cost of revenues for computer products were $4,325,265 or 90% of revenues and
$5,613,993 or 87% of revenues for the quarters ended September 30, 1996 and
1995, respectively. The higher cost of revenues percentage in the current
quarter is reflective of the reduced operating leverage resulting from lower
computer product sales.
Costs of revenues for medical products were $1,934,396 or 81% of revenues and
$14,295 or 23% of revenues for the quarters ended September 30, 1996 and 1995,
respectively.
Total selling, general and administrative ("SG&A") expenses for the quarter
ended September 30, 1996 and 1995 were $1,259,830 or 18% of revenues and
$1,224,239 or 19% of revenues, respectively. The aggregate increase in SG&A
expenses from the prior period was $35,591 or 3%. The increase in SG&A
expenses was negatively impacted by the increase in Medical Marketplace, Inc.
personnel expense and the change in computer sales representative compensation
plans mentioned above. These increases were partially offset by personnel
cutbacks during the prior year and during the current quarter.
SG&A expenses attributed to computer products were $1,101,044 or 23% of
revenues and $1,121,120 or 17% of revenues for the quarters ended September
30, 1996 and 1995, respectively. The increase in SG&A expenses as a
percentage of revenues is due primarily to the sales volume decrease
previously mentioned.
SG&A expense attributed to medical products were $158,786 or 7% of revenues
and $103,119 or 168% of revenues for the quarters ended September 30, 1996 and
1995, respectively.
Total operating loss was $339,612 and $319,823 for the quarters ended
September 30, 1996 and 1995, respectively. This $19,789 or 6% unfavorable
change was due to a combination of factors including: a decline in computer
product revenues, the delayed impact of additional cost reductions during the
quarter, and lower margin sales associated with the Company's inventory
reduction program.
Operating loss for computer products was $627,568 and $263,860 for the
quarters ended September 30, 1996 and 1995, respectively.
Operating income (loss) for medical products was $287,956 and $(55,963) for
the quarters ended September 30, 1996 and 1995, respectively.
Interest expense for the year ended September 30, 1996, was $115,510 compared
to $76,185 for the year ended September 30, 1995. Management anticipates that
interest expense will remain stable during the current fiscal year over
similar periods in the prior year. Decreases in interest expense are possible
depending on the success of selling the Company's headquarters facility and
the success in raising additional money through a private placement.
The Company's consolidated net loss was $445,397 or $0.05 per share for the
quarter ended September 30, 1996, versus $394,227 or $0.05 per share for the
quarter ended September 30, 1995. The net loss was a result of the business
conditions described herein.
<PAGE>
(12)
Variability of Periodic Results and Seasonality
Results from any one period cannot be used to predict the results for other
fiscal periods. Revenues fluctuate from period to period; however, management
does not see any seasonality or predictability to these fluctuations.
Liquidity and Capital Resources
The Company has historically financed its growth and cash needs primarily
through borrowings and cash generated from operations. The funds received
through the initial public offering in June 1993, in the amount of
approximately $6.6 million, enabled the Company to eliminate most of its long-
term debt at that time. Working capital at September 30, 1996 and 1995, was
$2,375,922 and $3,617,431, respectively.
During the quarter ended September 30, 1996, the Company used the June 30,
1996 available cash and cash equivalents of approximately $595,000, the
availability of borrowing under the Company's revolving Credit Facility,
vendor extended credit and approximately $551,000 of reductions in the
Company's inventory levels in order to fund the operations of the Company.
Management has continued to emphasize an inventory reduction program
encompassing both the stored inventory, as well as the inventory on short-term
rental contracts. The effects of this program are clearly reflected in this
quarter. Management believes this disciplined strategic reduction will
enhance the Company's operating effectiveness, provide additional liquidity,
and reduce the exposure to negative inventory valuation adjustments caused by
changing market conditions. Certain temporary increases in inventory amounts
are due to selected purchases made by the Company which are intended to be
sold quickly. Additional inventory increases are expected relating to Medical
Marketplace, Inc.'s growth.
In addition, management intends to investigate alternative financing options
to be utilized for our foreign customers in order to enhance the opportunities
for the Company's medical equipment subsidiary's growth. The Company has
delayed implementation of these financing options as the medical equipment
subsidiary has been focused on domestic sales. Longer-term cash requirements,
other than for normal operating expenses, are anticipated for acquisition
candidates. The Company anticipates that a private placement for Medical
Marketplace Inc., of approximately $950,000 after expenses, will occur in the
second quarter. In addition, the Company has listed for sale two properties
located in Corona, California. Management intends to use the additional
funding and proceeds from the building sales in order to pay down related long-
term debt and borrowings on the revolving credit facility in addition to
significantly growing the business of our medical equipment subsidiary.
Commitments and Contingencies
On November 11, 1996, the Company's Board of Directors approved the
anticipated issuance of 500,000 Units, each Unit to be comprised of one (1)
share of Medical Marketplace, Inc., the Company's wholly owned subsidiary and
eighteen (18) Class D Common Stock Purchase Warrants (the "Class D Warrants").
It is anticipated that each Unit will be offered for $2.00 on a firm
commitment basis by Biltmore Securities, Inc., as the Company's placement
agent. Each Class D Warrant will be exercisable over a one (1) year period
<PAGE>
(13)
commencing three (3) months following the date of issuance. Each Class D
Warrant will entitle the holder to purchase one (1) share of the Company's
Common Stock at an exercise price of $.417 per share. Each Class D Warrant
will be redeemable if the Company's Common Stock equals or exceeds $5.00 per
share for any twenty (20) trading days during a period of thirty (30) trading
days. The Unit holders will also be granted certain demand and piggyback
registration rights.
In connection with the private placement, the Company expects to enter into a
three (3) year consulting agreement with Biltmore Securities, Inc. (or any
affiliate thereof), for assistance with corporate finance issues and
evaluations of possible business partners. The compensation for these
services consists of stock options to purchase 6,000,000 shares of the
Company's Common Stock at an exercise price of $.167 per share. These stock
options are exercisable for a period commencing upon the consummation by
Biltmore Securities, Inc. (or any affiliate thereof), of a financing which
provides gross proceeds of approximately $1,000,000 and terminating on the
fifth anniversary of the financing date. In addition, the consulting
agreement provides that if the Company consummates either an acquisition of
one or more businesses introduced to the Company by Biltmore Securities, Inc.
(or any affiliate thereof), which have in the aggregate net assets of not less
than $2,500,000 or the divestiture of assets outside the ordinary course of
business to a purchaser introduced to the Company by Biltmore Securities, Inc.
(or any affiliate thereof), resulting in net proceeds to the Company of not
less than $2,500,000 then Biltmore Securities, Inc. (or any affiliate
thereof), shall be entitled to receive 1,000,000 shares of Company Common
Stock simultaneously with the closing of such transaction.
Following the proposed private placement of the Company's securities, the
Company anticipates requesting that the Company's stockholders approve a 1-for-
6 reverse stock split with respect to the issued and outstanding shares of the
Company's Common Stock.
The Company cautions readers that there can be no assurance that actual
results or business conditions will not differ materially from those projected
or suggested in such forward-looking statements as a result of various
factors. Such forward-looking statements are intended to come within the
"safe harbor" provision of the Private Securities Litigation Reform Act of
1995.
<PAGE>
(14)
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule - Electronic Format Only
(b) No reports on Form 8-K were filed by the Company during the quarter ended
September 30, 1996.
<PAGE>
(15)
SIGNATURE
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.
COMPUTER MARKETPLACE, INC.
Date: November 12, 1996 By: /s/ Thomas Iwanski
-----------------------
Thomas Iwanski
Vice President and
Chief Financial Officer
Signing on behalf of the registrant
and as principal financial and
accounting officer.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 525,234
<SECURITIES> 0
<RECEIVABLES> 3,387,376
<ALLOWANCES> 97,622
<INVENTORY> 2,664,627
<CURRENT-ASSETS> 7,195,328
<PP&E> 837,908
<DEPRECIATION> 595,133
<TOTAL-ASSETS> 10,273,432
<CURRENT-LIABILITIES> 4,819,406
<BONDS> 1,519,507
0
0
<COMMON> 811
<OTHER-SE> 3,842,648
<TOTAL-LIABILITY-AND-EQUITY> 10,273,432
<SALES> 7,179,879
<TOTAL-REVENUES> 7,179,879
<CGS> 6,259,661
<TOTAL-COSTS> 6,259,661
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 115,510
<INCOME-PRETAX> (445,397)
<INCOME-TAX> 0
<INCOME-CONTINUING> (445,397)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (445,397)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> 0
</TABLE>
