SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1999 Commission File Number 0-23382
TRANS GLOBAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1544008
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1393 Veterans Memorial Highway, Hauppauge, NY 11788
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 724-0006
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
Number of shares of common stock outstanding as of November 1,1999: 2,669,716
<PAGE> 2
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
INDEX
Part 1 - Financial Information:
Item 1. Financial Statements: Page No.
---------
Balance Sheets as of September 30, 1999 and December 31, 1998. 3-4
Consolidated Statements of Operations-
Three and Nine Months Ended September 30, 1999 and September 30, 1998. 5
Consolidated Statements of Cash Flows-
Nine Months Ended September 30, 1999 and September 30, 1998. 6-7
Consolidated Statement of Stockholders' Equity -
Nine Months Ended September 30, 1999 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
Part 11 Other Information
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and Cash Equivalents $ 268,523 $ 234,917
Accounts Receivable- Net of allowance 3,023,201 3,922,843
for doubtful accounts of $62,500
Loans Receivable-Officer -0- 5,000
Deferred Tax Asset -Current Portion 144,000 144,000
Deferred Loan Costs 35,916 82,266
Prepaid Expenses and Other Current Assets 43,714 214,323
--------- ---------
Total Current Assets 3,515,354 4,603,349
--------- ---------
Property and Equipment-Net 177,824 171,123
--------- ---------
Other Assets:
Due from Affiliates 1,206,328 1,615,035
Customer Lists 2,219,893 2,388,607
Goodwill, Net 690,536 726,968
Deferred Acquisition Costs 281,464 235,560
Deferred Tax Asset-Non Current 578,000 578,000
Other Assets 47,366 41,407
Investment in Preferred Stock of Affiliate -0- 2,237,230
--------- ---------
Total Other Assets 5,023,587 7,822,807
--------- ---------
Total Assets $ 8,716,765 $ 12,597,279
========== ==========
See notes to consolidated financial statements
</TABLE>
<PAGE> 4
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable and Accrued Expenses $ 186,019 $ 314,625
Accrued Income Taxes Payable -0- 13,496
Accrued Payroll and Related Taxes and Expenses 1,172,623 528,574
Loans Payable, Asset-based lender 1,947,673 2,647,244
Note Payable- Other -0- 126,767
------ -------
Total Current Liabilities 3,306,315 3,630,706
Commitments and contingencies [4] -- --
-------------- --------------
Stockholders' Equity:
Common Stock, $.01 Par Value, 25,000,000
Shares authorized, 3,819,716 shares issued
and outstanding at December 31, 1998 and
3,819,716 shares issued and 2,669,716
outstanding at September 30, 1999 38,197 38,197
Capital in Excess of Par Value 12,887,851 12,887,851
Accumulated Deficit (4,948,916) (3,959,475)
---------- ----------
7,977,132 8,966,573
Less Treasury Stock, at cost
1,150,000 shares -1999 (2,566,682) -0-
---------- --------
Total Stockholders' Equity 5,410,450 8,966,573
Total Liabilities and Stockholders' Equity $ 8,716,765 $ 12,597,279
========== ==========
See notes to consolidated financial statements
</TABLE>
<PAGE> 5
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 8,353,145 $ 16,343,568 $ 29,048,875 $53,514,369
Cost of Services Provided 7,612,824 14,722,419 26,825,174 48,797,645
---------- ---------- ---------- ----------
Gross Profit 740,321 1,621,149 2,223,701 4,716,724
Selling, General
and Administrative 1,021,330 1,287,593 2,838,052 3,683,218
Related Party
Administrative Expenses -0- 45,000 -0- 130,000
Amortization of Intangibles 68,382 68,382 205,146 205,155
--------- --------- --------- ---------
Total Operating Expenses 1,089,712 1,400,975 3,043,198 4,018,373
Operating (Loss)Profit (349,391) 220,174 (819,497) 698,351
Other Income (Expenses):
Interest Expense ( 72,660) ( 98,531) (201,697) (432,071)
Interest Income 30,042 38,411 94,334 97,500
Other (Expense) ( 22,508) ( 17,741) ( 62,581) ( 58,021)
--------- --------- --------- ---------
Total Other Expenses- Net ( 65,126) ( 77,861) (169,944) (392,592)
(Loss)Income before income
taxes $ (414,517) $ 142,313 $(989,441) $ 305,759
Income taxes -0- 30,737 -0- 30,737
------- ------- ------- -------
Net Income (414,517) 111,576 (989,441) 275,022
======== ======== ========= =======
Basic (Loss) Income
per Share (.16) .03 (.31) .07
Weighted Average Number of
Shares of Common Stock 2,669,716 3,819,716 3,175,211 3,819,716
========= ========= ========= =========
Diluted (Loss) Income Per Share:
Incremental Shares from
Assumed Conversion of
Options and Warrants 41,391 9,333 66,045 30,000
Weighted Average Number of Shares
Assuming Dilution 2,711,107 3,829,049 3,241,256 3,849,716
Diluted (Loss) Income Per Share:
Net (Loss) Income (.15) .03 (.31) .07
See notes to consolidated financial statements
</TABLE>
<PAGE> 6
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -----------------------------------------------------------------------------
<TABLE> Nine Months Ended
<CAPTION> September 30,
1 9 9 9 1 9 9 8
<S> <C> <C>
Operating Activities:
Net (Loss) Income $ ( 989,441) $ 275,022
Adjustments to Reconcile Net(Loss)Income
to Net Cash Provided By Operating
Activities:
Depreciation and Amortization 305,846 258,004
Charges from Option Exercise -0- 121,950
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Assets:
Receivables 899,642 (434,888)
Loans Receivable - Officer 5,000 42,500
Prepaid Expenses and Other
Current Assets 170,609 ( 93,905)
Increase (Decrease) in Liabilities:
Accounts Payable and Accrued
Expenses (128,606) (391,843)
Accrued Payroll and Related
Taxes and Expenses 644,049 627,204
Accrued Income Taxes Payable (13,496) ( 62,861)
Accrued Voluntary Settlement Agreement -0- (150,000)
--------- ---------
Total Adjustments 1,883,044 ( 83,839)
--------- --------
Net Cash Provided by Operating Activities 893,603 191,183
--------- ---------
See notes to consolidated financial statements
</TABLE>
<PAGE> 7
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION> Nine Months Ended
September 30,
1999 1998
<S> <C> <C>
Net Cash -
Operating Activities Forwarded $ 893,603 $ 191,183
Investing Activities:
Capital Expenditures ( 61,051) ( 56,925)
Deferred Acquisition Costs ( 45,904) ( 22,500)
Repayments from Affiliates 82,755 99,694
Other, net ( 5,959) 3,078
Investment in Preferred Stock of Affiliate ( 3,500) -0-
--------- --------
Net Cash - Investing Activities ( 33,659) 23,347
Financing Activities:
Net Payments to
Asset-Based Lender ( 699,571) ( 315,449)
Repayment of Note Payable ( 126,767) -0-
-------- ---------
Net Cash - Financing Activities ( 826,338) ( 315,449)
Net Increase (Decrease) in Cash and
Cash Equivalents 33,606 ( 100,919)
Cash and Cash Equivalents
- Beginning of Year 234,917 328,484
Cash and Cash Equivalents
- September 30 $ 268,523 $ 227,565
=========== ===========
Supplemental Disclosures of Cash
Flow Information:
Interest $ 201,697 $ 432,071
Income Taxes $ -0- $ 93,598
Supplementary Disclosure of Non Cash Investing and Financing Activities during
the nine months ended September 30, 1999.
On May 3, 1999, the Company acquired 1,150,000 shares of Common Stock in
exchange for the Investment in Preferred Stock of an Affiliate, which was held
by the Company in the amount of $2,240,730, and a reduction in Due from
Affiliates in the amount of $325,952.
See notes to consolidated financial statements
</TABLE>
<PAGE> 8
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders Equity
For the Nine Months Ended September 30, 1999 (Unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Amounts
-------- --------
<S> <C> <C>
Common Stock $.01 Par Value Authorized
25,000,000 Shares
Balance December 31, 1998 3,819,716 $ 38,197
Purchase of treasury stock (1,150,000) ( 11,500)
---------- ---------
Balance-September 30, 1999 2,669,716 26,697
Capital in Excess of Par Value
Balance December 31, 1998 12,887,851
Balance-September 30, 1999 12,887,851
Accumulated (deficit)
Balance December 31, 1998 (3,959,475)
Net Loss ( 989,441)
----------
Balance - September 30, 1999 (4,948,916)
Treasury Stock Balance December 31, 1998 -0- -0-
Treasury stock at cost (1,150,000) (2,555,182)
---------- ----------
Balance - September 30, 1999 (1,150,000) (2,555,182)
Total Stockholders' Equity
Balance December 31, 1998 $ 8,966,573
Purchase of treasury stock (2,566,682)
Net Loss ( 989,441)
-----------
Balance - September 30, 1999 $ 5,410,450
See notes to consolidated financial statements
</TABLE>
<PAGE> 9
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
(1) Basis of Presentation
Trans Global Services, Inc. (the "Company" or "Trans Global"), a Delaware
corporation, operates through two subsidiaries, Avionics Research Holdings,
Inc., formerly known as ARC Acquisition Group, Inc.["Holdings"] and Resource
Management International,Inc. ["RMI"]. The Company is engaged in providing
technical temporary staffing services throughout the United States, principally
in the aerospace and aircraft industry.
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal recurring accruals) necessary
to present fairly the financial position of the Company as of September 30, 1999
and the results of its operations for the three and nine months ended September
30, 1999 and 1998. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
together with management's discussion and analysis of financial condition and
results of operations contained in the Company's Form 10-K for the year ending
December 31, 1998. The results of operations for the three and nine months ended
September 30, 1999 are not necessarily indicative of the results for the entire
year or any future
interim period.
(2) Summary of Significant Accounting Policies
The accounting policies followed by the Company are set forth in Note 2 to the
Company's consolidated financial statements included in the Company's Form 10-K
for the year ended December 31, 1998.
(3) Loan Payable-Asset Based Lender
On September 30, 1999 the Company's Credit Agreement with Citizens Business
Credit was amended to reduce the maximum available to $3,000,000. Also, at
September 30, 1999 the Company was in violation of the tangible capital base and
the cash flow covenants of the agreement. As a result, the asset-based lender
may at any time demand payment of the note.
(4) Subsequent Events
On November 1, 1999, the Company entered into an Agreement and Plan of Merger
(the "Agreement") with IT Staffing Ltd., an Ontario corporation ("ITS"), and its
wholly-owned subsidiary. Pursuant to the Agreement, the subsidiary will be
merged with and into the Company, with the result that the Company will become a
wholly-owned subsidiary of ITS. Pursuant to the Agreement, when the merger
becomes effective, each share of the Company's common stock will be converted
into one-quarter of an ITS common share. The merger is subject to stockholder
approval by both the Company and ITS.
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three Months Ended September 30, 1999 and 1998
Revenue from technical temporary staffing services is based on the hourly cost
of payroll plus a percentage. The success of the Company's business is dependent
upon its ability to generate sufficient revenue to enable it to cover its fixed
costs and other operating expenses and to reduce its variable costs. Under its
agreements with its clients, the Company is required to pay its employees and
pay all applicable federal and state withholding and payroll taxes prior to the
receipt of payment from the clients. Furthermore, the Company's payments from
its clients are based upon the hourly rate paid to the employee, without regard
to when payroll taxes are payable with respect to the employee. Accordingly, the
Company's cost of services are greater during the first part of the year, when
federal Social Security taxes and state unemployment and related taxes, which
are based on a specific level of compensation, are due. Thus, until the Company
satisfies its payroll tax obligations, it will have a lower gross margin than
after such obligations are satisfied. Furthermore, to the extent that the
Company experiences turnover in employees, its gross margin will be adversely
affected. For example, in 1999, Social Security taxes are payable on the first
$72,600 of compensation. Once that level of compensation is paid with respect to
any employee, there is no further requirement for the Company to pay Social
Security tax for such employee. Since many of the Company's employees receive
compensation in excess of that amount, the Company's costs with respect to any
employee are significantly higher during the period when it is required to pay
Social Security taxes than it is after such taxes have been paid.
The Company's revenues, derived principally from the aircraft and aerospace
industry, during the three month period ended September 30, 1999 totaled $8.4
million. This reflected a 49% decrease from the comparable period of 1998. The
Company, along with other staffing supply service companies, continues to be
hurt by the slowdown in the aerospace industry resulting in decreased orders.
Companies in the industry have significantly reduced their labor costs in
general, including their use of contract labor. During the three month periods
ended September 30, 1999 and 1998 approximately 62% and 74% of the Company's
revenue was generated from its five largest customers, which were Lockheed
Martin, Bell Helicopter Textron, Boeing Corp, Gulfstream Aerospace and CDI Corp
in 1999 and Boeing Corp., Northrop-Grumman, Lockheed-Martin, Bell Helicopter and
Gulfstream Aerospace in 1998. This trend is continuing in the fourth quarter of
1999.
The Company's gross margins for the quarters ended September 30, 1999 and
September 30, 1998 were 8.9% and 9.9% respectively. The decline in gross margin
during the current period results from the reduced level of business from some
of the Company's higher margin clients.
Selling, general and administrative expenses in the third quarter of 1999
decreased by 20.7% compared to the third quarter of 1998. There were no related
party expenses for the period ended September 30, 1999 compared to $45,000
during the same period one year ago due to the termination of the Company's
management services agreement with Consolidated Technology Group Ltd., now known
as The Sagemark Companies Ltd., ("Sagemark").
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Interest expense during the three month period ended September 30, 1999
decreased by 26.3% compared to the three months ended September 30, 1998. This
decrease is due to the reduced borrowing reflecting a reduced level of revenue
and accounts receivable.
As a result of the foregoing, the Company incurred a loss of approximately
$415,000 or $.16 per share, basic and $.15 per share diluted for the three
months ended September 30, 1999, compared to net income of $112,000 or $.03 per
share, basic and diluted, for the three months ended September 30, 1998.
Nine Months Ended September 30, 1999 and 1998
The Company had revenues of $ 29.0 million for the nine months ended September
30, 1999 reflecting a 45.7% decrease from the revenues of $ 53.5 for the same
period one year earlier. This decrease can be attributed to the slowdown in the
aircraft and aerospace industry. As a result of this slowdown, the Company's
largest clients reduced their overall labor costs including their use of
contract labor. The Company continues to be affected by the slowdown in the
aircraft and aerospace industry during the fourth quarter of 1999. The gross
margin decreased from 8.8% in the nine months ended September 30, 1998 to 7.7%
for the nine months ended September 30, 1999 due to the loss of higher gross
margin revenue from some of the Company's customers. During the nine months
ended September 30, 1999 the Company's five largest customers accounted for
approximately 63% of the revenue generated by the Company compared to 75% for
the same period in 1998. In addition, in 1999 the Company generated 7% from
another customer, CDI Corp.
Selling, general and administrative expenses exclusive of related party expenses
and amortization of intangibles have decreased by 22.9% during the nine month
period ended September 30, 1999 compared to the same period in 1998. This
decline reflects principally the effects of the Company's cost reduction program
which was implemented in 1999 as a result of the reduced revenue level and the
Company's collection of contested tax penalties which it had paid to the IRS in
previous years.
Interest expense during the current nine month period decreased by approximately
$230,000 or 53.3% compared to the nine months ended September 30, 1998. This
decrease is primarily attributable to the lower financing rates payable through
the Company's credit facility with its asset-based lender and to a lesser extent
by the reduced borrowing reflecting a reduced level of revenue and accounts
receivable.
The Company incurred a loss of approximately $989,000, or a $.31 per share loss,
basic and diluted, for the nine months ended September 30, 1999 compared to net
income of $275,000 or $.07 per share, basic and diluted, for the nine months
ended September 30, 1998.
<PAGE> 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
As of September 30, 1999, the Company had working capital of approximately
$209,000, a decrease of $763,000 from December 31, 1998. This decrease is the
result of the Company's loss from operations for the nine months ended September
30, 1999. The most significant current asset at September 30, 1999 was the
Company's accounts receivable, which was approximately $ 3.0 million. These
receivables were offset by payroll and related expenses of $1.2 million and $
1.9 million due to the Company's asset-based lender. The payroll and related
taxes and expenses relate primarily to compensation of the Company's contract
employees and related taxes, which were paid during the first week of October
1999.
Pursuant to the previously reported February 25, 1999 agreement between
Sagemark, its wholly-owned subsidiary and the Company, on May 3, 1999 Sagemark,
through its subsidiary, transferred 1,150,000 shares of the Company's common
stock to the Company in consideration of the cancellation of shares of
Consolidated's Series G 2% Cumulative Redeemable Preferred Stock owned by the
Company, including accrued dividends, and certain other obligations due to the
Company. The transfer of the 1,150,000 shares to the Company reduced Sagemark's
holdings in the Company to 379,994 shares, or approximately 14.2 % of its
outstanding common stock.
The Company has amended its revolving credit agreement with its asset-based
lender effective September 30, 1999 to reduce the maximum availability under the
credit facility from $7,500,000 to $3,000,000. By reducing the credit facility,
the Company will reduce those finance costs associated with the unused line fee.
Additionally, as of September 30, 1999, the Company is not in compliance with
the tangible capital base or cash flow covenants in its credit agreement with
its asset-based lender.
During the first nine months of 1999, the Company has relied primarily on its
cash flow from operations and financing from its asset-based lender to fund its
operations. However, the Company must still improve its working capital and
stockholders' equity in order to increase its revenue from certain major clients
and to attract clients requiring greater working capital.
The Company's working capital is presently sufficient to meet only its immediate
needs. Due to both its low working capital and the ability of its asset-based
lender to demand payment on the note, the Company must increase its revenue,
further reduce expenses, secure additional funding or conclude the merger
agreement entered into with IT Staffing Ltd. to continue its operations. The
failure to have adequate working capital or an ongoing credit facility would
impair the Company's ability to operate. The Company has taken several cost
cutting measures in order to reduce its selling and general administrative
expenses and has reduced those costs by approximately $500,000 during the nine
months ended September 30, 1999. The Company's operations are continuing to
operate at a loss, and the Company anticipates that it will incur a loss for the
fourth quarter of 1999.
The Company entered into an agreement with IT Staffing Ltd. on November 1, 1999,
pursuant to which the Company would be merged with a subsidiary of IT Staffing
and would become a wholly-owned subsidiary of IT Staffing. As a result of the
merger the Company's stockholders would receive one quarter share of IT Staffing
common stock for each share of the Company's common stock owned at the effective
time of the merger. The merger is subject to the approval of the stockholders
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
of both the Company and IT Staffing. The Company believes that the merger with
IT Staffing will provide the Company with the resources to enable it to enhance
its business opportunities.
Year 2000 Issue
Many existing computer programs use only two digits to identify a year in a date
field. These programs were designed and developed without considering the impact
of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the year 2000. This
issue is referred to as the "year 2000" Issue". A significant portion of the
Company's critical computer software, particularly the software relating to
payroll, billing and other employee records, is presently Year 2000 compliant.
The Company is in the process of addressing other software utilized by the
Company to assure Year 2000 compliance. Although the Company believes that it
will not incur significant expense to become Year 2000 compliant, no assurance
can be given that the Company will not incur significant cost in addressing the
Year 2000 issue or that the failure to adequately addresss the Year 2000 issue
will not have a material effect upon the Company.
Forward Looking Statements
The statements in this Form 10-Q that are not descriptions of historical facts
may be forward-looking statements that are subject to risks and uncertainties.
In particular, statements in this form 10-Q that state our intentions, beliefs,
expectations, strategies, predictions or any other statements relating to our
future activities or other future events or conditions are "forward-looking
statements." Forward-looking statements are subject to risks, uncertainties and
other factors, including, but not limited to, those identified under "Risk
Factors", those described in Management's Discussion and Analysis of Financial
Conditions and Results of Operations in the Company's Form 10-K for the year
ended December 31, 1998, those described in Management's Discussion and Analysis
of Financial Conditions and Results of Operations in this Form 10-Q, and those
described in any other filings by the Company with the Securities and Exchange
Commission, as well as general economic conditions, any one or more of which
could cause actual results to differ materially from those stated in such
statements.
Item 6. Exhibits and Reports on From 8-K.
(a) Exhibits
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended September 30, 1999.
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Trans Global Services, Inc.
(Registrant)
-------------------------
Date: November 15, 1999 Joseph G. Sicinski
(Chief Executive Officer)
------------------------
Date: November 15, 1999 Glen R. Charles
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF OPERATIONS FILED
AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> Sep-30-1999
<CASH> 268,523
<SECURITIES> 0
<RECEIVABLES> 3,023,201
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,515,354
<PP&E> 748,792
<DEPRECIATION> 570,968
<TOTAL-ASSETS> 8,716,765
<CURRENT-LIABILITIES> 3,306,315
<BONDS> 0
<COMMON> 38,197
0
0
<OTHER-SE> 5,372,253
<TOTAL-LIABILITY-AND-EQUITY> 8,716,765
<SALES> 29,048,875
<TOTAL-REVENUES> 29,048,875
<CGS> 26,825,174
<TOTAL-COSTS> 26,825,174
<OTHER-EXPENSES> 3,011,445
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 201,697
<INCOME-PRETAX> (989,441)
<INCOME-TAX> 0
<INCOME-CONTINUING> (989,441)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (989,441)
<EPS-BASIC> (.31)
<EPS-DILUTED> (.31)
</TABLE>
