<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, 1997
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 (No fee required)
For the transition period from ______________ to _________________
Commission file number 1-13400
STRATASYS, INC.
(Name of Small Business Issuer in Its charter)
Delaware 36-3658792
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
14950 Martin Drive, Eden Prairie, Minnesota 55344
(Address of Principal Executive Offices)
(612) 937-3000
(Issuer's Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for past 90 days.
Yes X No ___
As of May 8, 1997, the Issuer had 5,671,585 shares of Common Stock,
$.01 par value, outstanding.
Transitional Small Business Disclosure Format:
Yes ___ No X
<PAGE> 2
STRATASYS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED) (AUDITED)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,091,359 $ 3,964,968
Marketable Securities 7,347,752 6,572,907
Accounts receivable, less allowance for doubtful
accounts of $428,400 in 1997 and $470,000 in 1996 8,473,542 10,607,155
Inventories 4,661,494 2,648,990
Prepaid expenses 323,639 344,101
Deferred taxes 1,152,000 945,000
--------------------------------
Total current assets 25,049,786 25,083,121
--------------------------------
MACHINERY AND EQUIPMENT, less
accumulated depreciation 2,673,453 2,184,165
--------------------------------
OTHER ASSETS
Deposits 75,576 75,576
Intangible assets 3,942,443 4,119,857
--------------------------------
4,018,019 4,195,433
--------------------------------
$ 31,741,258 $ 31,462,719
--------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Obligations under capitalized leases, current portion 155,647 186,415
Accounts payable and other current liabilities 3,496,255 3,622,555
Unearned maintenance revenue 1,249,829 1,082,044
--------------------------------
Total current liabilities 4,901,731 4,891,014
--------------------------------
DEFERRED TAXES 71,000 71,000
OBLIGATIONS UNDER CAPITALIZED LEASES, less current portion 135,591 94,977
--------------------------------
206,591 165,977
--------------------------------
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value, authorized 15,000,000
shares, issued and outstanding 5,627,916 shares
in 1997 and 5,517,309 shares in 1996 56,279 55,173
Capital in excess of par value 28,025,418 27,394,902
Accumulated deficit (1,448,761) (1,044,347)
--------------------------------
Total Stockholders' Equity 26,632,936 26,405,728
--------------------------------
$ 31,741,258 $ 31,462,719
--------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 3
STRATASYS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31,
1997 1996
(UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C> <C>
SALES $ 5,208,527 $ 2,752,465
COST OF GOODS SOLD 1,763,363 908,403
------------------------------
GROSS PROFIT 3,445,164 1,844,062
COSTS AND EXPENSES
Research and development 1,114,225 593,021
Selling, general and administrative 3,020,803 1,376,451
------------------------------
4,135,028 1,969,472
------------------------------
OPERATING LOSS (689,864) (125,410)
------------------------------
OTHER INCOME (EXPENSE)
Interest income 88,725 145,496
Interest expense (10,275) (9,923)
------------------------------
78,450 135,573
------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (611,414) 10,163
INCOME TAXES (CREDIT) (207,000) --
------------------------------
NET INCOME (LOSS)
$ (404,414) $ 10,163
==============================
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
Primary $ (0.07) $ --
------------------------------
Assuming full dilution $ (0.07) $ --
------------------------------
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING
Primary 5,585,583 5,656,632
------------------------------
Assuming full dilution 5,585,583 5,679,291
------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 4
STRATASYS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31,
1997 1996
(UNAUDITED) (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (404,414) $ 10,163
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred taxes (207,000)
Depreciation and amortization 155,900 77,254
Amortization of intangibles and other assets 226,537 84,899
Bad debts 25,000
Increase (decrease) in cash attributes to
changes in assets and liabilities:
Accounts receivable 2,108,613 914,663
Inventory (2,012,504) (866,063)
Prepaid expenses 20,462 (94,653)
Accounts payable and other current liabilities (126,300) 33,891
Unearned maintenance revenue 167,785 62,874
------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (45,921) 223,028
------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of marketable securities (774,845) (90,333)
Acquisition of machinery and equipment (595,038) (292,597)
Payments of deposits, net -- (2,772)
Payments for intangible assets (49,123) (340,990)
------------------------------
NET CASH USED IN INVESTING ACTIVITIES (1,419,006) (726,692)
------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of obligations under capitalized leases (40,304) (46,602)
Proceeds from the sale of common stock 631,622 1,825,352
------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 591,318 1,778,750
------------------------------
NET INCREASE (DECREASE) IN CASH (873,609) 1,275,086
CASH AND CASH EQUIVALENTS, beginning of period 3,964,968 4,726,056
------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 3,091,359 $ 6,001,142
------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the period for interest $ 10,275 $ 9,923
------------------------------
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING
AND FINANCING ACTIVITIES
During the three months ended March 31, 1997, the Company entered into
capital lease agreements for the acquisition of
machinery and equipment $ 50,150 $ --
------------------------------
During the three months ended March 31, 1996, the Company
issued common stock in exchange for preferred stock outstanding $ 3,794
------------------------------
</TABLE>
See notes to financial statements.
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
Note 1 -- Basis of Presentation
The financial information herein is unaudited; however, such information
reflects all adjustments (consisting of normal, recurring adjustments) which
are, in the opinion of management, necessary for a fair statement of results for
the interim period. The results of operations for the three months ended March
31, 1997 are not necessarily indicative of the results to be expected for the
full year. Certain financial information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The reader is referred to
the audited financial statements and notes thereto for the year ended December
31, 1996, filed as part of the Company's Annual Report on Form 10-KSB for such
year.
Note 2 -- Common Stock
In the three months ended March 31, 1997, the Company received net proceeds
of approximately $631,000 from the exercise of 109,500 options at prices ranging
from $1.59 to $16.63 per share and 1,078 warrants at $5.80 per share.
Note 3 -- Inventory
Inventories consist of the following at March 31 and December 31,
respectively:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Finished Goods $1,639,800 $1,295,803
Work in process 434,193 264,259
Raw materials 2,587,501 1,088,928
---------- ----------
$4,661,494 $2,648,990
</TABLE>
Note 4 -- Production equipment
In February 1997 the Company entered into a capital lease agreement for the
purchase of R&D equipment. The lease term is for 32 months with minimum lease
payments of approximately $19,800 per year.
Note 5 -- Material Commitment
In March 1997 the Company signed a material commitment with a vendor for
fixed delivery of selected inventory expected to be used over the remainder of
1997. The commitment amounts to approximately $1,000,000 and contains a two
month non-cancellation clause.
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED WITH THE THREE MONTHS ENDED
MARCH 31, 1996.
Sales for the three months ended March 31, 1997 totaled $5,208,527 compared
with sales of $2,752,465 recorded in the three months ended March 31, 1996, an
increase of $2,456,062, or 89.2%. The 1997 increase over the comparable 1996
period was attributable to the continued sales growth of the Company's FDM(R)
1650 rapid prototyping systems, the Genisys(R) 3D Printer, and two new products,
the FDM 2000 and the FDM 8000. The FDM 2000 offers speed, throughput, and
performance enhancements beyond those offered by the FDM 1650. The FDM 8000
offers large modeling capability combined with throughput improvements.
Maintenance and modeling materials revenue was also up significantly in the 1997
period as compared with the 1996 period. In the three months ended March 31,
1997 unit sales of the Company's FDM and Genisys product lines, including the
new products listed above, increased by more than 50% over the comparable 1996
period.
Gross margins increased by $1,601,102, or 86.8%, to $3,445,164 for the
three months ended March 31, 1997, from $1,844,062 for the three months ended
March 31, 1996. As a percentage of sales, gross margins declined to 66.1% for
the three months ended March 31, 1997, as compared with 67.0% for the three
months ended March 31, 1996. The Company's gross margin was negatively impacted
in the 1997 period by higher manufacturing overhead costs, some of which were
due to continued expansion of the Company's manufacturing facility. While direct
labor was also slightly higher in the 1997 period as compared to 1996, the
direct materials component of cost of goods sold declined to 20.5% of revenue
from 22.9% in the three months ended March 31, 1996.
Selling, General and Administrative ("SG&A") expenses increased to
$3,020,803 for the three months ended March 31, 1997, from $1,376,451 in the
comparable 1996 period. This represents a $1,644,352, or 119.5% increase in SG&A
expenses for the 1997 period as compared with the 1996 period. Total company
headcount increased by 48% in the three months ended March 31, 1997 to
approximately 145 employees and contractors, from 98 employees or contractors in
the comparable 1996 period. The Company's sales and sales support experienced
the largest growth as the Company continued to expand its domestic and
international sales staffs. Company has also established a domestic reseller
network for its Genisys product, and now has approximately 54 reseller locations
under contract, combined with 18 international distributors. As such, selling
compensation, including commissions on higher revenue, was up significantly in
the three months ended March 31,1997 compared with the comparable 1996 period.
Promotional activities associated with the FDM 2000 and 8000 product
introductions, including extensive trade show exposure, also contributed to
higher SG&A expenses in the three months ended March 31, 1997 over the
comparable 1996 period. Amortization of the Company's intangible assets was also
significantly higher in 1997 period as compared with the comparable 1996 period.
SG&A expenses as a percentage of sales in the three months ended March 31, 1997
and 1996 were 58% and 50%, respectively.
Research and Development ("R&D") expenses increased to $1,114,225 for the
three months ended March 31, 1997, from $593,021 for the three months ended
March 31, 1996, an increase of $521,204, or 87.9%. R&D expenses as a percentage
of sales declined slightly to 21.4% of sales in the three months ended March 31,
1997 as compared with 21.5% in the 1996 period. On-going expenses associated
with new product development accounted much of this increase. For the three
months ended March 31, 1997, the Company capitalized $37,795 of software
development costs, in accordance with FASB 86, as compared with $324,771 that
was capitalized for the comparable 1996 period.
The Company's operating loss for the three months ended March 31, 1997
amounted to $689,864, or 13.2% of sales, compared with an operating loss of
$125,410, or 4.6% of sales, for the three months ended March 31, 1996. Net
interest income amounted to $78,450 for the three months ended March 31, 1997,
as compared with net interest income of $135,573 for the comparable 1996 period.
The Company's net loss for the three months ended March 31, 1997, amounted
to $404,414, or 7.8% of sales, after an income tax credit of $207,000. For the
three months ended March 31, 1996, the Company recorded net income
<PAGE> 7
of $10,163, or .4% of sales. The loss per share for the three months ended March
31, 1997, amounted to $.07 on weighted average number of common and common
equivalent shares outstanding of 5,585,583 as compared with earnings per share
of $.00 on fully-diluted weighted average number of common and common equivalent
shares outstanding of 5,679,291 for the 1996 period.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THE THREE MONTHS
ENDED MARCH 31, 1995.
Sales for the three months ended March 31, 1996 totaled $2,752,465 compared
with sales of $1,691,096 recorded in the three months ended March 31, 1995, an
increase of $1,061,369, or 62.8%. The increase was largely attributable to the
continued sales growth of the Company's FDMa 1600 and the FDM(R) 1650 series of
Rapid Prototyping Systems. The FDM 1650, which was introduced in March 1996,
replaced the FDM 1600 by featuring multiple engineering materials, including
ABS, combined with significant improvements in through-put. Gross margins
increased by $777,579, or 72.9%, from $1,066,483 in the three months ended March
31, 1995, to $1,844,062 in the three months ended March 31, 1996. As a
percentage of sales, gross margins improved to 67.0% in the three months ended
March 31, 1996, as compared with 63.1% in the three months ended March 30, 1995.
The improvement to the Company's gross margin was largely due to reductions in
material costs combined with higher prices charged for the Company's FDM 1650
product. The cost reductions were achieved through both engineering design
changes as well as purchasing efficiencies. Offsetting the improvement to the
material component of cost of goods sold were increases to direct labor and
manufacturing overhead, which together equaled 10.1% of sales for the three
months ended March 31, 1996, an increase from 7.2% for the three months ended
March 31, 1995. These increases were largely due to increased manufacturing
personnel and facility-related expenses as the Company continued to expand its
manufacturing and production capabilities in anticipation of its future growth.
Selling, General and Administrative ("SG&A") expenses increased to
$1,376,451 in the three months ended March 31, 1996, from $785,580 in the
comparable 1995 period. This represents a $590,872, or 75.2%, increase in SG&A
expenses in the 1996 period as compared with the 1995 period. Selling
compensation, including commissions earned on higher sales, increased by 56.5%
in the 1996 period as compared with the 1995 period. Throughout 1995 the Company
expanded both its domestic and international sales staffs. This has continued
into the first quarter of 1996. The Company now has sales representatives
located in all its major domestic geographical territories and continues to add
to its international presence through the hiring of direct sales representatives
as well as adding to the network of international distributors, which now
numbers 18. Non-selling compensation in SG&A increased by almost 152% as the
Company added positions, including a new Chief Operating Officer, to help manage
its growth. Due largely to the expanded sales staff and higher sales activity,
travel expenses increased by 48.3% to $177,216 in the three months ended March
31, 1996 as compared with the same 1995 period. Promotional activities,
recruiting, and amortization expenses increased to $59,436, $23,370 and $70,899,
respectively, in the three months ended March 31, 1996, compared with $9,334,
$483 and $3,294 for the three months ended March 31, 1995. SG&A expenses were
50.0% of sales in the three months ended March 31, 1996, compared with 46.5% in
the three months ended March 31, 1995.
Research and Development ("R&D") expenses increased to $593,021 in the
three months ended March 31,1996, from $438,606 in the three months ended March
31, 1995, a $154,415, or 35.2% increase. R&D salaries and wages increased by
30.0% in the three months ended March 31, 1996, as compared with the comparable
1995 period, while expenses for contract labor declined by 17.4% in the same
periods. Travel expenses increased by 438.7%, to $91,472 for the three months
ended March 31, 1996, as compared with $16,979 for the three months ended March
31, 1995. Much of this travel was due to the need to coordinate engineering
activities of the New York technical facility and the Minneapolis production
facility as the Company introduced its new Genisys, FDM 1650, and Stratasys
8000 products in March 1996. Expenses for rent and utilities, expendable tools,
and equipment leasing increased to $37,090, $17,316 and $18,967, respectively,
in the three months ended March 31, 1996, as compared with $24,644, $2,014 and
$4,322, respectively, in the comparable 1995 period. Amortization expense
declined to $14,000 in the three months ended March 31, 1996, from $45,000 in
the comparable 1995 period as the Company reclassified these expenses to SG&A.
In the three months ended March 31, 1996, the Company capitalized $324,771 of
software development expenses, in accordance with FASB 86, as compared with
$263,320 that was capitalized in the comparable 1995 period. As a percentage of
sales, R&D expenses amounted to 21.5% and 25.9% of sales in the three months
ended March 31, 1996 and March 31, 1995, respectively. Total expenditures
related to the New York technical facility
<PAGE> 8
amounted to $439,874 in the three months ended March 31, 1996. Of this, $161,645
was capitalized in accordance with FASB 86.
The Company's operating loss for the three months ended March 31, 1996 and
March 31, 1995 was $125,410 and $157,702, respectively. Net interest income
amounted to $135,573 in the three months ended March 31, 1996, as compared with
net interest income of $44,124 in the comparable 1995 period.
The Company's net income in the three months ended March 31, 1996, amounted
to $10,163, or .4% of sales, compared with a net loss of $113,578, or 6.7% of
sales, in the comparable 1995 period. The earnings per share for the three
months ended March 31, 1996, amounted to $.00 on weighted average number of
common and common equivalent shares outstanding of 5,679,291 as compared with a
loss per share of $.03 on weighted average shares outstanding of 3,371,210 for
the 1995 period.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities for the three months ended March 31, 1997, used cash
of $45,921, primarily impacted by increases to inventories of $2,012,504 and the
net loss in the period of $404,414. This was offset by a decrease in accounts
receivable of $2,106,613. Inventory was up due to the increase to the number of
product lines offered by the Company, while accounts receivable declined due to
strong cash collections in the three months ended March 31, 1997. For the
comparable 1996 period, the Company's operating activities provided $223,028 of
cash, primarily reflecting a decrease in accounts receivable of $914,663, while
increases to inventory used cash in the amount of $866,063. Net cash used in its
investing activities amounted to $1,419,006 in the three months ended March 31,
1997, including $774,845 for the acquisition of marketable securities and
$595,038 for the acquisition of machinery and equipment. Net cash used in the
three months ended March 31, 1996, for investing activities amounted to
$726,692, which included $292,597 for the acquisition of machinery and equipment
and $340,990 for payments for intangible assets. Net cash provided by the
Company's financing activities was $591,318 for the three months ended March 31,
1997, as compared to $1,778,750 for the three months ended March 31, 1996. In
the 1997 period, the Company received net proceeds of $630,547 from the exercise
of 109,500 options and 1,078 warrants. For the three months ended March 31, 1996
the Company received net proceeds from the sale of common stock of $1,825,352.
Net cash for the three months ended March 31, 1997, decreased by $873,609
compared with a net cash increase of $1,275,086 for the three months ended March
31, 1996.
At March 31, 1997, the Company's cash and cash equivalents and marketable
securities balances totaled $10,439,111. This cash will be used by the Company
for additional working capital, for expansion of facilities, for new product
development and introduction, for acquisition of production equipment and
computers, and for increased selling and marketing activities. Management
believes that the Company's revenue from operations, its current cash and cash
equivalents balance, and the proceeds from the sale of short term marketable
securities should provide sufficient cash resources to finance its operations
for at least 24 months.
As of March 31, 1997, the Company had net accounts receivable of
$8,473,542, down from $10,607,155 as of December 31, 1996. While cash
collections were strong in the first quarter of 1997 and April, collection
efforts were limited by certain extended terms granted in the fourth quarter.
The Company believes that most, if not all, of the accounts receivable balances
will ultimately be collected, but can give no assurances that it will be able to
continue its history of never recording a bad debt. Inventories increased to
$4,661,494 from $2,648,990 at December 31, 1996, in part due to the inventory
carrying requirements of the Company's expanded product offerings. Total current
assets were $25,049,786 compared with total current liabilities of $4,901,731.
The Company's debt is minimal, consisting primarily of $291,238 of obligations
under capital leases. The Company estimates that it will spend approximately
$1,900,000 in 1997 on expansion of its production capacity, facility's
expansion, and the acquisition of production equipment and computers.
Approximately $600,000 was spent in the first quarter on property and equipment.
As of March 31, 1997, a material commitment of approximately $1,000,000 was
signed with a vendor for delivery of specific inventory. This commitment
terminates at the end of 1997, and contains a two month cancellation provision.
The Company has largely completed the expansion into its new production facility
that contains 59,400 square feet of combined office/warehouse space for annual
base rent of approximately $252,000, although further leasehold
<PAGE> 9
improvements may be needed. The Company plans to sublease approximately 50% of
this space until it is needed for production capacity expansion.
The Company believes that the rapid prototyping industry is growing at
approximately 50% per year. It believes that there is a trend toward lower
priced rapid prototyping systems capable of producing functional prototypes, and
that a sizable marketplace exists for concept or visualization 3D printers
priced at around $55,000. This pricing trend should lead to growth in the more
traditional functional prototyping marketplace as companies continue to address
in-house rapid prototyping needs. Certain market segments have not demonstrated
pricing sensitivity. These segments are more interested in modeling envelope
size, modeling material variety, throughput, and part quality, which should
allow growth to continue for higher-priced systems addressing these needs. The
Company plans to continue to manufacture and market a line of products to
address both the lower-priced, traditional rapid prototyping market and the
growing needs of the more sophisticated, higher-priced rapid prototyping market.
The Company believes that its 1996 unit growth rate led the rapid prototyping
industry, although it can give no assurance that this growth rate or market
acceptance of its products will continue into the future.
Except for the historical information herein, the matters discussed in this
report are forward-looking statements that involve risks and uncertainties,
including the timely development and acceptance of new products, the impact of
competitive products and pricing, and the other risks detailed from time to time
in the Company's SEC reports, including the report on Form 10-KSB for the year
ended December 31, 1996.
<PAGE> 10
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27.1 Financial Data Schedule
(b) No Reports on Form 8-K were filed during the quarter ended March
31, 1997.
<PAGE> 11
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.
STRATASYS, INC.
Dated: May 14, 1997 By: /s/ S. Scott Crump
----------------------------------
S. Scott Crump
President
Date: May 14, 1997 By: /s/ Thomas W. Stenoien
----------------------------------
Thomas W. Stenoien
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,091,359
<SECURITIES> 7,347,752
<RECEIVABLES> 8,901,942
<ALLOWANCES> (428,400)
<INVENTORY> 4,661,494
<CURRENT-ASSETS> 25,049,786
<PP&E> 3,667,068
<DEPRECIATION> (993,615)
<TOTAL-ASSETS> 31,741,258
<CURRENT-LIABILITIES> 4,901,731
<BONDS> 0
0
0
<COMMON> 56,279
<OTHER-SE> 26,576,657
<TOTAL-LIABILITY-AND-EQUITY> 31,741,258
<SALES> 5,208,527
<TOTAL-REVENUES> 5,208,527
<CGS> 1,763,363
<TOTAL-COSTS> 4,135,028
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,275
<INCOME-PRETAX> (611,414)
<INCOME-TAX> (207,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (404,414)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
