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 JUNE 30, 1996
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 1-12694
SOLIGEN TECHNOLOGIES, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
WYOMING 95-4440838
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
19408 LONDELIUS STREET
NORTHRIDGE, CALIFORNIA 91324
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(818) 718-1221
(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 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 August 1, 1996:
29,738,330
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
SOLIGEN TECHNOLOGIES, INC.
FORM 10-QSB
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
<S> <C>
Consolidated Balance Sheets at June 30, 1996 and March 31, 1996......... 3
Consolidated Statements of Operations for the Three Months Ended
June 30, 1996 and 1995.................................................. 4
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 1996 and 1995.................................................. 5
Notes to Consolidated Financial Statements.............................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................. 11
Item 4. Submission of Matters to a Vote of Security Holders................ 12
Item 6. Exhibits and Reports on Form 8-K................................... 12
Signatures.............................................................. 13
</TABLE>
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1996 1996
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 575,000 $ 1,189,000
Accounts receivable 383,000 447,000
Inventories 180,000 167,000
Prepaid expenses 48,000 55,000
---------- ----------
Total current assets 1,186,000 1,858,000
---------- ----------
Property, plant and equipment
Property, plant and equipment 1,928,000 1,882,000
Less allowance for depreciation and
amortization 724,000 625,000
---------- ----------
Net property, plant and equipment 1,204,000 1,257,000
Other assets 77,000 63,000
---------- ----------
TOTAL ASSETS $2,467,000 $3,178,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $ 362,000 $ 380,000
Accounts payable and accrued expenses 618,000 780,000
Deferred revenue 45,000 38,000
----------- -----------
Total current liabilities 1,025,000 1,198,000
Notes payable, net of current portion 161,000 146,000
---------- ---------
Total liabilities 1,186,000 1,344,000
Stockholders' equity:
Common stock, no par value
Authorized -- 50,000,000 shares
Issued and outstanding --
29,738,330 shares 8,631,000 8,631,000
Accumulated deficit (7,350,000) (6,797,000)
---------- ----------
Total stockholders' equity 1,281,000 1,834,000
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,467,000 $3,178,000
========== ==========
</TABLE>
<PAGE>
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
1996 1995
<S> <C> <C>
REVENUES
Parts Now (Trademark) $ 88,000 $ --
DSPC(Registered trademark) production 128,000 124,000
Production parts 291,000 387,000
DSPC technology 36,000 127,000
----------- --------
Total revenues 543,000 638,000
COST OF REVENUES 467,000 446,000
----------- --------
Gross profit 76,000 192,000
----------- --------
OPERATING EXPENSES
Research and development 284,000 216,000
Selling 179,000 80,000
General and administrative 261,000 291,000
----------- --------
Total operating expenses 724,000 587,000
----------- --------
OTHER INCOME (EXPENSE)
Interest income 11,000 3,000
Interest expense (7,000) (13,000)
Other 90,000 --
----------- -------
Total other income (expenses) 94,000 (10,000)
----------- -----------
NET LOSS $ (554,000) $ (405,000)
=========== ===========
NET LOSS PER SHARE $(0.02) $(0.02)
------- -------
</TABLE>
<PAGE>
SOLIGEN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (554,000) $ (405,000)
Depreciation and amortization 99,000 127,000
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 64,000 (203,000)
Decrease (increase) in inventories (13,000) 40,000
Decrease in prepaid expenses 7,000 3,000
Increase (decrease) in accounts payable (161,000) 130,000
Increase in deferred revenues 7,000 39,000
Increase in other assets (14,000) (9,000)
----------- ----------
Net cash by used for operating activities (565,000) (278,000)
----------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment (46,000) (171,000)
------------ -----------
Net cash used for investing activities (46,000) (171,000)
Cash flows from financing activities:
Net borrowings (payments) under notes payable -- 19,000
Principal payments under capital lease
obligations (3,000) --
Proceeds from private placements, net of
issuance costs -- 600,000
----------- ----------
Net cash provided by (used for)
financing activities (3,000) 619,000
----------- ----------
Net increase (decrease) in cash and
cash equivalents (614,000) 170,000
Beginning of period 1,189,000 331,000
----------- ----------
End of period $ 575,000 $ 501,000
=========== ==========
</TABLE>
<PAGE>
SOLIGEN TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The financial information included herein for the three month periods ended June
30, 1996 and June 30, 1995 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 for the financial
position, results of operations and cash flows for the interim periods. The
financial information as of March 31, 1996 is derived from Soligen Technologies,
Inc's 1996 Form 10-KSB. The interim consolidated financial statements should be
read in conjunction with the consolidated financial statements and the notes
thereto included in the Company's 1996 Form 10-KSB.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.
ACCOUNTING POLICIES
Reference is made to Note 1 of Notes to Financial Statements in the Company's
Annual Report on Form 10-KSB for the summary of significant accounting policies.
INVENTORIES
Inventories are stated at the lower of cost or market on a first-in, first-out
basis. Inventories consist of the following:
JUNE 30, 1996
-------------
Raw materials $ 80,000
Work in process 51,000
Finished goods 49,000
---------
Total inventory $ 180,000
=========
DEFERRED REVENUE
Deferred revenue relates to the DSPC technology profit center and includes both
machine and customer parts revenues. The deferred revenue related to machine
revenues results mainly from the Company's issuance of licenses to use the
machines, or to support the machines in form of maintenance, rather than the
outright sales of machines.
<PAGE>
NOTES PAYABLE
Debt consists of the following at June 30, 1996:
6/30/96
Notes payable to former owners of A-RPM, collateralized $ 305,000
by equipment and furnishings, bearing interest at 8%,
interest payable quarterly, $85,000 currently due and
$220,000 due in 2000 (see Part II, Item 1).
Capital leases 208,000
Other notes to non-related parties, bearing interest from 10,000
8.125% to 12.3%, due at various dates through 1997
----------
Total capital leases and notes payable 523,000
Less current portion (362,000)
-----------
Long term portion $ 161,000
==========
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 Soligen Technologies, Inc.("STI")
and its wholly-owned subsidiaries Soligen, Inc. ("Soligen") and Altop, Inc.
("Altop") (collectively referred to herein as the "Company") including the notes
thereto (see Part I, Item 1). Except as otherwise noted, all amounts have been
expressed in thousands of U.S. dollars.
OVERVIEW
Based on technology licensed from MIT, the Company has developed, a proprietary
technology known as Direct Shell Production Casting (DSPC (Registered
Trademark)). The DSPC process enables the automatic creation of ceramic molds
("Shells") similar to those commonly used in metal casting, directly from a
Computer Aided Design (CAD) file. DSPC is the only known process from which a
Shell can be created before patterns or tooling are designed or made. As a
result DSPC becomes the only patternless casting process whereby cast metal
parts can be fabricated directly from the customer CAD file. The Company's
strategy is to combine this technological advantage with conventional casting
and CNC machining technologies in order to become the premier out-sourcing
vendor for production of cast metal parts which are fully developed and ready
for assembly. This out-sourcing service is called Parts Now (Trademark).
Parts Now is designed to be a "one stop shop" for metal parts, a service the
Company plans to launch in stages. Unlike traditional manufacturing of metal
parts, where the production tooling must be made prior to producing a first
article (or prototype), the Company utilizes its proprietary DSPC technology to
create the first article before production tooling is made. Once the customer
<PAGE>
approves the first article, the Company utilizes its DSPC technology to generate
the production tooling, and then uses this tooling to manufacture production
quantities. In both cases the CAD file of the customer is the master. There
are three stages in developing Parts Now to its fullest capacity:
1. STAGE 1 - Parts Now operates as a service bureau for functional cast and
machined parts focusing on the DSPC center reputation as the most
competitive producer of cast metal parts ("first article parts") made
directly from the customer CAD file. In preparation for stage 2 Soligen
acquired a conventional foundry and CNC machine shop.
2. STAGE 2 - Parts Now combines DSPC with conventional casting by utilizing
DSPC to produce the production tooling for conventional casting (patterns
and core boxes), directly from the same CAD file as the approved first
article. At this stage, the Company has to be able to supply small to
medium production quantities of cast metal parts, but not mass production
quantities.
3. STAGE 3 - Parts Now establishes joint ventures with mass production
foundries who are able to use the DSPC made production tooling to augment
Parts Now's in-house production capabilities for mass production.
The following will elaborate on the three stages discussed above:
In fiscal 1996 the Company's primary focus at its DSPC production centers was to
serve customers as a stage 1 Parts Now center. This included creating cast
metal parts with very complex geometry in a variety of alloys. The Company set
up milestones for casting intake and exhaust manifolds in aluminum ductile iron
and stainless steel. Some of these parts could not have been produced nor
delivered as quickly and cost-effectively using any other technique. The Company
has established repeat business with Ford Motor Company, General Motors
Corporation, Caterpillar, Inc., John Deere Company, Chicago Pneumatic Tool
Company, Walt Disney, Porter Cable Corporation and more. To prepare for the
implementation of stage 2 of the Company's Parts Now strategy, the Company
established a wholly owned subsidiary, Altop, an aluminum foundry and machine
shop located in Santa Ana, California.
In the first quarter of fiscal 1997, the Company has begun to implement the
second stage of its Parts Now strategy. The first two programs included
producing first article parts by DSPC, and, after customer approval of the first
article parts, creating production tooling from the same CAD files. The
production tooling was successfully used to conventionally cast aluminum parts
which met the customer requirements and were functionally identical to the DSPC
made first article parts.
As of June 30, 1996, the Company is continuing its transition from a development
stage company into a manufacturing/service company with continuing revenues from
operations. The Company operates four revenue-generating profit centers:
1. PARTS NOW PROFIT CENTER (PARTS NOW): Revenues are generated from providing
program management of the "one stop shop" production services. Parts Now
is responsible for any contract which requires a combination of the DSPC
production center and the conventional casting and CNC machining expertise.
It consists of program managers who oversee the transition from CAD to
first article, to tooling, to conventional casting and later to mass
production (stage 3). It acquires services from the DSPC center and the
conventional foundry at cost.
<PAGE>
2. DSPC PRODUCTION PROFIT CENTER: Revenues result from the production and
sale of first article and short run quantities of cast metal parts made
directly from the customer's CAD file. This profit center also provides
DSPC part and tool making services to the Parts Now Profit Center. These
services are charged to Parts Now at cost. Revenues for this product line
were initiated in the quarter ended March 31, 1995.
3. CONVENTIONAL CASTING PROFIT CENTER (PRODUCTION PARTS): Revenues result
from the production and sale of production quantities of cast and machined
metal parts to Parts Now at cost and for other industrial customers. The
Company began generating revenues for industrial customers, many of whom
were customers of A-RPM, whose assets were purchased as the basis for
establishing Altop, its aluminum foundry and machine shop, in July 1994.
This profit center is undergoing a transition from providing non-DSPC
related, conventional casting services to industrial customers to providing
conventional casting of aluminum parts, utilizing DSPC made tooling, CNC
machining finishing and inspection services to the Parts Now Profit Center.
4. DSPC TECHNOLOGY PROFIT CENTER: Revenues are generated by two peripheral
activities:
- MACHINE REVENUES result from the distribution and maintenance of DSPC
machines. Part of the Company's strategy is to enable companies in certain
applications to operate DSPC machines in-house. Initially, this involved
the sale of machines to be used in a specific application (such as the sale
of a DSPC machine to Johnson & Johnson Orthopedics for the sole purpose of
producing orthopedic implants), subsequently evolving into the generation
of revenues through licensing, maintenance and upgrades.
- ENGINEERING CONTRACTS REVENUES involve participation in research
projects wherein Soligen provides technological expertise. Revenues in
this product line were initiated in the quarter ended December 31, 1994 as
a part of the Company's participation in several industrial consortia that
included MIT and certain companies seeking to further develop applications
in advanced manufacturing.
RESULTS OF OPERATIONS
For the first quarter of fiscal 1997 the Company reported the following
revenues as compared to the same quarter of the previous year:
THREE MONTHS ENDED
JUNE 30
1996 1995
Parts Now $ 88,000 --
DSPC production 128,000 $ 124,000
Production parts 291,000 387,000
DSPC technology 36,000 127,000
---------- ------------
Total $ 543,000 $ 638,000
========= ==========
<PAGE>
Beginning in fiscal 1997, the Parts Now strategy has progressed from stage 1
to stage 2. The Company established Parts Now as a new profit center which
oversees its "one stop shop" operations. Revenues from program management of
programs with customers who require both DSPC services and production parts
services are included in this profit center. The DSPC portion of these programs
is reported at cost at the DSPC production center and the conventional casting
portion of these programs is reported at cost at the production parts center.
Revenues declined in the first quarter of fiscal 1997 as compared to the first
quarter of fiscal 1996. Total revenues in the quarter ending June 30, 1996
resulting from the implementation of the Company's Parts Now strategy and
originated utilizing the competitive advantage of the DSPC technology rose 74%
to $216,000 compared to $124,000 in the quarter ending June 30, 1995.
As a result of the Company's transition from phase 1 to phase 2 in its Parts Now
strategy, conventional casting contracts which are unrelated to the technology
of Parts Now and had either negative or marginal profit margins were eliminated.
As a result, production parts revenues at Altop declined to $291,000 for the
quarter ended June 30, 1996 from $387,000 for the quarter ended June 30, 1995, a
decrease of 25% Despite the reduction of revenues, management believes that
Altop's staff is completing the transformation from a conventional casting team
to a sophisticated foundry which is able to serve the customers of Parts Now,
among whom are larger companies with higher demand for just in time production.
Management expects a major shift in its customer base for production parts from
small and local customers who are not CAD oriented to more computer orientated
customers which will provide more long-term revenue growth and higher profit
margins.
Revenues from DSPC technology decreased 72% to $36,000 for the quarter ended
June 30, 1996 from $127,000 for the quarter ended June 30, 1995. Expiration
of both engineering and machine contracts contributed to this decrease.
At the end of the quarter ending June 30, 1996, the Company is staffed ahead of
its revenue growth to accommodate implementation of the second stage of its
Parts Now strategy. This added to the cost of revenues which increased 5% to
$467,000 from $446,000 in the quarter ended June 30, 1996. Gross profit
decreased 60% to $76,000 for the quarter ended June 30, 1996 compared to
$192,000 for the same quarter of the previous year. The major reason for this
decrease was a significant reduction in high margin, low cost DSPC technology
contracts that occurred during the transition to phase 2. The Company can
support significant additional business activity without increasing staff.
Research & development expenses increased 31% from $216,000 in the first quarter
of fiscal 1996 to $284,000 in the first quarter of fiscal 1997. $48,000 of this
increase was spent at Altop to develop new product lines, all related to the
implementation of the second stage of Parts Now. The Company continues to
invest in R&D, particularly in the field of developing improved consumable
materials for the DSPC process (ceramic powder and binder), and the
application of creating tools from the CAD files of the approved first article
parts.
Selling expenses increased 124% from $80,000 in the first quarter of fiscal
1996 to $179,000 in the first quarter of fiscal 1997; this resulted from the
Company's increased sales efforts to penetrate into more markets and to
develop new business.
<PAGE>
General and administration expenses decreased 10% from $291,000 in the first
quarter of fiscal 1996 to $261,000 in the first quarter of fiscal 1997.
CASH AND SOURCES OF LIQUIDITY
The Company requires significant funds to continue operations. As of June 30,
1996, the Company had working capital of $161,000 and $575,000 in cash and cash
equivalents. From inception, the Company has funded its operations through the
private sale of common stock. The Company does not expect current sources of
liquidity to be adequate beyond September 30, 1996. Therefore, until the
Company operates profitably, as to which no assurance can be given, it will be
necessary for the Company to obtain outside funding to fund operations. The
Company does not have any bank financing, and it does not believe that financing
from a bank or other commercial lender is presently available to it. The
Company is pursuing other sources of outside funds. However, no assurance can
be given that the Company will be able to obtain the necessary funds when such
funds are required, and the failure to obtain necessary funding may have a
materially adverse effect upon its business and operations. Furthermore, if the
Company is able to raise such funds, the terms on which funds may be made
available to the Company may result in substantial dilution or may be otherwise
on terms not favorable to the Company. The Company has entered into an
agreement to raise an additional $1.5 million.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
A-RPM LAWSUIT AND COUNTERCLAIM
On June 30, 1994, Altop, Inc., a wholly-owned subsidiary of the Company,
acquired substantially all of the assets of A-RPM Corporation, an aluminum
foundry and machine shop located in Santa Ana, California. The assets were
acquired pursuant to an Asset Purchase Agreement between Altop, A-RPM, the
Company and Leland K. and Nancy B. Lowry, the sole shareholders of A-RPM. As
payment for the assets, Altop delivered an initial cash payment in the amount of
$100,000 and three promissory notes in the total principal amount of $220,000.
Altop also assumed certain liabilities of A-RPM and agreed to deliver an
additional payment of up to $100,000 contingent upon determination of certain
net asset values according to a formula set forth in the Asset Purchase
Agreement. Altop also entered into an Employment Agreement with Leland K.
Lowry.
On March 22, 1995, the Company and Altop commenced an action against A-RPM and
the Lowrys in the Superior Court for Orange County, California. The complaint
in this action seeks damages for breach of the Asset Purchase Agreement, fraud,
and negligent misrepresentation. In addition, the Company and Altop are
requesting declaratory relief confirming that the Company and Altop have no
further obligation to A-RPM and the Lowrys under the Asset Purchase Agreement,
the promissory notes and related transactions. The complaint also seeks an
award of attorneys fees and costs.
A-RPM and the Lowrys have filed an answer to the complaint generally denying the
allegations of the complaint. In addition, they have filed a cross-complaint
<PAGE>
stating actions against the Company and Altop for recovery of the entire
principal amount and accrued interest on the three promissory notes delivered in
connection with the Asset Purchase Agreement. The cross-complaint also seeks
foreclosure on the assets of Altop securing the promissory notes, recovery of
$85,000 alleged to be due and payable pursuant to the contingent payment
provisions of the Asset Purchase Agreement, and attorneys fees and costs.
The Company and Altop intend to vigorously defend against the allegations of the
cross-complaint and to vigorously pursue recovery against A-RPM and the Lowrys.
Pending resolution of this dispute, the Company has provided for a $305,000
liability in its consolidated financial statements.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On July 29, 1996, the Company held its 1996 Annual Meeting of Shareholders, at
which the following actions were taken:
1. The Shareholders elected the four nominees for Director to the Board of
Directors of the Company. The four Directors elected were Yehoram Uziel,
Mark Dowley, Patrick Lavelle, and Darryl Yea (17,068,775, 17,070,775,
17,070,775, 17,069,775 shares were voted affirmatively and 17,941, 15,941,
15,941, 16,941 shares abstained from voting for each of the nominees named,
respectively).
2. The Shareholders ratified the selection of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending March 31,
1997 (17,054,600 shares were voted affirmatively, 6,950 shares voted
negatively and no shares abstained from voting on this proposal).
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Computation of Net Loss Per Share
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
SOLIGEN TECHNOLOGIES, INC.
Date: August 14, 1996 By: /s/ Yehoram Uziel
------------------
Yehoram Uziel
President, CEO and Chairman of the Board
(Principal executive officer)
Date: August 14, 1996 By: /s/ Robert Kassel
------------------
Robert Kassel
Chief Financial Officer
(Principal financial officer)
2
Exhibit 11.1
SOLIGEN TECHNOLOGIES, INC.
COMPUTATION OF NET LOSS PER SHARE
Three Months Ended
June 30 .
1996 1995 .
Weighted-average common shares outstanding 29,738,330 23,637,000
---------- ----------
Net loss $ (554,000) $ (405,000)
----------- -----------
Net loss per share $(0.02) $(0.02)
------- -------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND
ON PAGES 3 AND 4 OF THE COMPANY'S FORM 10-QSB FOR THE YEAR-TO-DATE, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 575
<SECURITIES> 0
<RECEIVABLES> 470
<ALLOWANCES> 87
<INVENTORY> 180
<CURRENT-ASSETS> 1186
<PP&E> 1928
<DEPRECIATION> 724
<TOTAL-ASSETS> 2467
<CURRENT-LIABILITIES> 1025
<BONDS> 0
0
0
<COMMON> 8631
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2467
<SALES> 543
<TOTAL-REVENUES> 543
<CGS> 467
<TOTAL-COSTS> 467
<OTHER-EXPENSES> 724
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> (554)
<INCOME-TAX> 0
<INCOME-CONTINUING> (554)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (554)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
