U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For Quarterly Period Ended September 30, 1996.
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From to .
Commission File No. 0-26558
BALTIC INTERNATIONAL USA, INC.
(Exact name of small business issuer as specified in its charter)
TEXAS 76-0336843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1990 Post Oak Blvd., Suite 1630, Houston, Texas 77056
(Address of principal executive offices) (zip code)
Issuer's Telephone Number: (713) 961-9299
Indicate by check mark whether the issuer (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 outstanding of each of the issuer's classes of common stock
as of November 14, 1996: 7,220,022 shares.
BALTIC INTERNATIONAL USA, INC.
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 3
Condensed Statements of Operations -
Three Months Ended September 30,1996 and 1995
and Nine Months Ended September 30, 1996 and 1995 4
Condensed Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 5
Notes to Condensed Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 11
Item 2 - Changes in Securities 11
Item 3 - Defaults on Senior Securities 11
Item 4 - Submission of Matters to a Vote of Security Holders 11
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 12
2
Part I - Financial Information
Item 1 - Financial Statements
BALTIC INTERNATIONAL USA, INC.
Condensed Consolidated Balance Sheets
September 30, December 31,
1996 1995
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 59,597 $ 139,240
Accounts receivable 131,101 187,178
Income taxes receivable - 16,860
Inventory 56,238 14,265
Prepaids and deposits 54,784 6,418
Total current assets 301,720 363,961
PROPERTY AND EQUIPMENT, net 14,690 20,035
INVESTMENT IN AND ADVANCES TO
JOINT OPERATIONS 2,794,979 2,914,834
GOODWILL, NET 245,673 223,593
OTHER ASSETS 39,025 -
Total assets $ 3,396,087 $ 3,522,423
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 320,388 $ 807,470
Short-term debt, net 541,000 324,063
Commitments for guarantees on BIA liabilities 221,375 1,019,521
Other current liabilities 250,868 342,143
Total liabilities 1,333,631 2,493,197
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock:
Series A, $2 convertible, $10 par value, 500,000 shares
authorized, 123,000 shares issued and outstanding 1,230,000 1,230,000
Series B, convertible, $10 par value, 70 shares
authorized, 37 shares issued and outstanding 925,000 -
Common stock, $.01 par value, 20,000,000 shares authorized,
7,097,645 and 5,758,241 shares issued and outstanding 70,976 57,582
Additional paid-in capital 9,662,799 8,703,883
Retained deficit (9,826,319) (8,962,239)
Total stockholders' equity 2,062,456 1,029,226
Total liabilities and stockholders' equity $ 3,396,087 $ 3,522,423
See accompanying notes to condensed consolidated financial statements.
3
BALTIC INTERNATIONAL USA, INC.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
ended September 30, ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES:
Freight revenue $ 185,737 $ 127,211 $ 454,383 $ 482,853
Food distribution 100,256 - 229,574 -
General sales agency revenue 16,500 - 38,500 -
Wet lease agreement with Air Baltic - 600,000 - 600,000
Fee revenue - 1,500,000 - 1,500,000
Aircraft rental income from BIA - 240,000 - 480,000
Commissions from BIA - 35,723 - 78,845
Net equity in earnings of joint operations 119,141 104,697 376,657 306,183
-------- --------- --------- ---------
Total operating revenues 421,634 2,607,631 1,099,114 3,447,881
-------- --------- --------- ---------
OPERATING EXPENSES:
Cost of revenue 166,751 183,456 383,053 739,514
General and administrative 348,334 846,841 1,152,950 1,303,070
Net equity in losses of BIA - 1,404,479 612,385 2,254,401
Total operating expenses 515,085 2,434,776 2,148,388 4,296,985
INCOME (LOSS) FROM OPERATIONS (93,451) 172,855 (1,049,274) (849,104)
OTHER INCOME (EXPENSE)
Interest expense (20,151) (35,539) (47,513) (169,997)
Interest income 17,122 77,806 19,845 193,581
Other 55,590 31,250 352,790 31,250
TOTAL OTHER INCOME (EXPENSE) 52,561 73,517 325,122 54,834
INCOME (LOSS) BEFORE
INCOME TAXES (40,890) 246,372 (724,152) (794,270)
INCOME TAX EXPENSE 19,524 - 47,428 -
NET INCOME (LOSS) $ (60,414) $ 246,372 $ (771,580) $ (794,270)
INCOME (LOSS) PER
COMMON SHARE $ (0.01) $ 0.04 $ (0.14) (0.21)
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
BALTIC INTERNATIONAL USA, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
For the Nine Months
Ended September 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (771,580) $ (794,270)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Net equity in earnings and losses
of joint operations 235,728 (193,632)
Write-off of investment in BIA - 2,141,850
Gain on sale of assets (297,200) -
Other 51,252 72,560
Changes in assets and liabilities (223,198) (432,901)
--------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (1,004,998) 793,607
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net investments in, advances to,
distributions and repayments from joint ventures (2,012,411) (3,480,829)
Distributions and repayments from joint ventures 203,738 -
Proceeds from sale of Air Baltic stock 745,970 -
Repayment of subordinated debt to Air Baltic 290,000 -
Acquisition of property and equipment (1,769) (7,858)
NET CASH USED IN INVESTING ACTIVITIES (774,472) (3,488,687)
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings 500,000 1,081,000
Repayments of notes (155,000) (356,000)
Reduction of deferred lease credits - (77,104)
Debt issuance costs - (6,175)
Issuance of stock, net of related costs 1,439,452 2,360,793
Payment of dividends (84,625) (29,500)
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,699,827 2,973,014
Net increase (decrease) in cash (79,643) 277,934
Cash and cash equivalents, beginning of period 139,240 98,757
Cash and cash equivalents, end of period $ 59,597 $ 376,691
See accompanying notes to condensed consolidated financial statements.
5
BALTIC INTERNATIONAL USA, INC.
Notes to Condensed Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been
prepared by Baltic International USA, Inc. (the "Company") and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation of financial results for the nine months ended September 30,
1996 and 1995, pursuant to the rules and regulations of the Securities and
Exchange Commission. All adjustments and provisions included in these
consolidated statements are of a normal recurring nature.
The information contained herein is condensed from that which would appear in
the annual financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial statements
and related notes thereto contained in the Annual Report on Form 10-KSB filed by
the Company with the Securities and Exchange Commission for the fiscal year
ended December 31, 1995. Accounting measurement at interim dates inherently
involve greater reliance on estimates than at year end. The results of
operations for the interim period presented are not necessarily indicative
of the results which can be expected for the entire year.
NOTE 1 - OPERATIONS AND FINANCIAL CONDITION
The Company owns 49%, and assists in the management of Baltic International
Airlines ("BIA"), a joint venture registered in the Republic of Latvia. The
routes and passenger service operations of BIA were transferred to
a new Latvian carrier, Air Baltic Corporation ("Air Baltic") effective
October 1, 1995. The Company owns an 8.02% interest in Air Baltic. The
Company is also engaged in providing services to Air Baltic and other airlines
through its 51% interest in Airo Catering Services, an aviation catering
company. The Company has a 50% interest in Baltic Catering Services ("BCS"), a
Riga, Latvia-based company. The Company also serves as a cargo marketing and
sales company to Air Baltic and other airlines through Baltic World Air
Freight ("BWAF"). American Distributing Company ("ADC"), a wholly owned
subsidiary, began operations on December 1, 1995 as a consumer products
distribution company.
The Company's financial statements include an investment in BIA which has
incurred losses of approximately $12,600,000 from inception through
September 30, 1996. The Company's future plans for BIA are to continue
operations as a charter and cargo service in the Baltic region.
The Company requires substantial capital to pursue its operating strategies.
To date, the Company has relied upon net cash provided by financing activities
to fund its capital requirements. There can be no assurance that the Company's
business interests will generate sufficient cash in future periods to satisfy
its capital requirements. These factors historically have adversely affected
the Company's capital resources and liquidity and raise substantial doubt about
the Company's ability to continue as a going concern. The accompanying
financial statements do not include any adjustments related to the
recoverability and classification of recorded assets or other adjustments
should the Company be unable to continue as a going concern.
NOTE 2 - JOINT OPERATIONS
The investment in and advances to joint operations are as follows:
September 30, 1996 December 31, 1995
Air Baltic $ 1,790,875 $ 2,630,000
BIA 501,351 -
BCS 246,508 284,834
ACS 91,021 -
RCS 125,224 -
LAMCO 40,000 -
---------- ----------
Total $ 2,794,979 $ 2,914,834
========== ==========
A condensed summary of the financial position (100% basis) of the combined
joint operations accounted for using the equity method of accounting is as
follows:
September 30, 1996 December 31, 1995
Current assets $ 3,094,261 $ 630,658
Property and other assets, net 8,159,253 658,230
Total assets $ 11,253,514 $ 1,288,888
Current liabilities $ 1,163,372 $ 4,089,558
Other liabilities 6,355,604 2,783,006
Stockholders' equity 3,734,538 (5,583,676)
Total liabilities and stockholders'
equity $ 11,253,514 $ 1,288,888
A summary of the results of operations of the combined joint operations
accounted for using the equity method of accounting is as follows:
Combined 100% Basis:
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Operating revenues $ 832,110 $ 3,964,345 $ 2,090,967 $ 10,576,465
Income from operations $ 240,744 $(3,871,669) $ 748,614 $ (4,860,628)
Earnings (loss) $ 240,707 $ (468,270) $ 637,418 $ (2,796,331)
Company Percentage Interest:
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Operating revenues $ 349,173 $ 1,949,566 $ 935,550 $ 5,200,893
Income from operations $ 94,427 $(1,892,742) $ 329,076 $(2,371,610)
Earnings (loss) $ 94,408 $ (226,390) $ 274,557 $(1,364,078)
The above amounts for the periods ended September 30, 1995 include the
scheduled passenger carrier service operations of BIA which was discontinued
on October 1, 1995.
NOTE 3 - SHORT-TERM DEBT
On April 5, 1996, the Company entered into a convertible note agreement in
connection with a $250,000 loan to the Company ("Convertible Note").
Principal and interest at an annual rate of 10% are due on October 5, 1996.
The Company is currently negotiating a renewal of this loan with the lender.
The holder of the Convertible Note may at any time on or after July 5, 1996
convert the Convertible Note to shares of the Company's common stock at a
conversion price equal to the lesser of $1.50 or 70% of the closing bid price
per share of common stock on the trading date immediately preceding the date of
conversion. On July 11, 1996, the holder of the convertible note converted
principal of $134,000 and accrued interest to 306,213 shares of common stock.
On May 16, 1996, the Company entered into a promissory note in connection with
a $250,000 loan to the Company from an officer and director of the Company.
Principal and interest at an annual rate of 12% were due on August 13, 1996.
This loan was renewed with an interest rate of 14% and due on November 30, 1996.
In connection with this renewal, the Company paid a facility fee of $12,500 to
the lender.
NOTE 4 - EQUITY TRANSACTIONS
During the three months and nine months ended September 30, 1996, shareholders
converted an aggregate of eight and 13 shares of Series B Convertible Redeemed
Preferred Stock, respectively, into 362,633 and 495,922 shares of the Company's
common stock, respectively.
During September 1996, stock options underlying 42,000 shares of common stock
were exercised, resulting in an increase in stockholders' equity of $121,332.
NOTE 5 - EARNINGS/LOSS PER COMMON SHARE
The computations of earnings/loss per common share are computed using 6,795,816
and 5,326,747 weighted average shares of common stock for the three months ended
September 30, 1996 and 1995, respectively, and 6,215,284 and 3,885,596 weighted
average shares of common stock for the nine months ended September 30,
1996 and 1995, respectively. Stock warrants and options are considered to be
dilutive for earnings per share purposes if the average market price during the
three month period ending on the balance sheet date exceeds the exercise price
and the Company had earnings for the period.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company earned commission income from BIA for services to BIA as
international promotional sales agent. Commissions are based upon a percentage
of passenger ticket and cargo revenue earned on sales originating
outside of Riga. The Company also charged a management fee to BIA to cover
certain administrative costs and other expenses incurred by the Company on
behalf of BIA. The Company earned $0 and $78,845 in such commissions and
fees for the nine months ended September 30, 1996 and 1995, respectively.
The Company subleased two Boeing 727 aircraft to BIA for an aggregate of
$80,000 per month. For the nine months ended September 30, 1995, the Company
received $480,000 related to these subleases. These aircraft were returned
to the owner in 1996.
NOTE 7 - SUBSEQUENT EVENT
In November 1996, the Company concluded negotiations on terms of a promissory
note in connection with a $2,000,000 loan to the Company. Principal and
interest at an annual rate of 13% will be due in November 1997. In connection
with this promissory note, the Company will issue warrants to the lender to
purchase 500,000 shares of the Company's common stock at a price of $0.75 per
share.
8
BALTIC INTERNATIONAL USA, INC.
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company's revenues are derived from its equity in the net income of its
joint operations and from revenue generated by BWAF and ADC. Since 1994, the
Company has elected to account for its revenue earned from BIA on a cash basis.
Quarter Ended September 30, 1996 and 1995
For the quarter ended September 30, 1996, the Company had revenues of $421,634
compared with $2,607,631 for the quarter ended September 30, 1995. The 83%
decrease is principally due to non-recurring wet lease revenue from Air
Baltic, non-recurring fee revenue and aircraft rental income from BIA in 1995
with no such revenue for 1996. This decrease was offset partially by food
distribution revenue of $100,256 for 1996 with no such revenue for 1995.
The Company's operating expenses for the quarter ended September 30, 1996 were
$515,085 compared to $2,434,776 for the same quarter in 1995. Cost of revenue
decreased by $16,705 primarily as the result of no aircraft rental expense in
1996 as compared to $150,000 in 1995 offset by cost of food distribution revenue
of $76,761 in 1996. The Boeing aircraft were returned to the owner in 1996.
General and administrative expenses decreased from $846,841 in 1995 to
$348,334 in the same quarter of 1996. This decrease was due primarily to the
reserve of the Latavio investment of $468,950 in 1995 with no such reserve in
1996. Net equity in losses of BIA decreased from $1,404,479 in 1995 to $0
for 1996. This decrease is due to BIA ceasing its scheduled passenger carrier
service on October 1, 1995.
Interest expense decreased 43% from $35,539 in the second quarter of 1995 to
$20,151 in 1996, reflecting the conversion of $1,288,137 of notes payable to
equity during the second and third quarters of 1995 and reduced borrowings
incurred through September 30, 1996. Interest income decreased from $77,806
for 1995 to $17,122 for 1996. This decrease is attributable to interest paid by
BIA on outstanding debt to the Company in 1995 with no such income for 1996.
Nine Months Ended September 30, 1996 and 1995
For the nine months ended September 30, 1996, revenues were $1,099,114 compared
to $3,447,881 for the nine months ended September 30, 1995. Year-to-date
revenues were impacted by the same factors that affected the second quarter
results.
Year-to-date operating expenses decreased 50% from $4,296,985 for 1995 to
$2,148,388 for 1996. Such decrease is attributable to the same factors
affecting the second quarter operating expenses.
Interest expense decreased from $169,997 for 1995 to $47,513 for 1996.
Interest income decreased from $193,581 for 1995 to $19,845 for 1996. Such
decreases are attributable to the same factors affecting the second quarter.
The Company recorded a gain of $297,200 on the sale of the 12% Air Baltic stock
to Scandinavian Airline Systems Sweden-Norway-Denmark during the nine months
ended September 30, 1996. No such gain was recorded in 1995.
The Company's consolidated financial statements included elsewhere herein
present the Company's share of the joint operations other than Air Baltic using
the equity method of accounting in accordance with generally accepted
accounting principles. The Company's interest in Air Baltic is accounted for
using the cost method. The following table presents a proforma condensed
combined statement of operations of the Company assuming its proportionate
share of the joint operations accounted for using the equity method is combined
with the Company. Management believes this presentation is informative of the
Company's results of operations given that a significant portion of the
Company's business is conducted through the joint operations.
Proforma Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 1996
<TABLE>
<CAPTION>
Proportionate
Share of Combined
Company Joint Operations Eliminations Company
<S> <C> <C> <C> <C>
Operating revenues $ 1,099,114 $ 935,550 $ (377,559) $ 1,657,105
3Operating expenses 2,148,388 606,474 (103,002) 2,651,860
---------- -------- --------- ----------
Income (loss) from operations (1,049,274) 329,076 (274,557) (994,755)
Other income (expense) 325,122 (12,869) - 312,253
---------- -------- --------- ----------
Income (loss) before income taxes (724,152) 316,207 (274,557) (682,502)
Provision for income taxes 47,428 - - 47,428
Discontinued operations - (41,650) - (41,650)
---------- -------- --------- ----------
Net income (loss) $ (771,580) $ 274,557 $ (274,557) $ (771,580)
========== ======== ========= ==========
</TABLE>
Liquidity and Capital Resources
The Company had $59,597 in cash and cash equivalents at September 30, 1996,
compared to $139,240 at December 31, 1995.
At September 30, 1996, the Company had a working capital deficit of $1,031,911
as compared to $2,129,236 at December 31, 1995. The decrease in the working
capital deficit is due primarily to a decrease in accounts payable and accrued
liabilities of $487,082, a decrease in commitments for guarantees on BIA
liabilities of $798,146, partially offset by a decrease in cash of $79,643 and
an increase in short-term debt of $216,937.
Net cash used in operating activities for the nine months ended September 30,
1996 was $1,004,998 as compared to net cash provided of $793,607 for the same
period of 1995. Such decrease primarily was due to the decrease in charges to
BIA reflected as increases in advances to the joint operation. Net cash used in
investing activities was $774,472 for the nine months ended September 30, 1996
compared to $3,488,687 for the nine months ended September 30, 1995. The
decrease was due primarily to the proceeds from the sale of the Air Baltic
stock to SAS. Net cash provided by financing activities was $1,699,827 for the
nine months ended September 30, 1996 compared to $2,973,014 for the nine months
ended September 30, 1995.
The Company's consolidated balance sheet included elsewhere herein presents the
Company's share of the joint operating using the equity method of accounting in
accordance with generally accepted accounting principles. The Company's
interest in Air Baltic is accounted for using the cost method. The following
table presents a proforma condensed combined balance sheet of the Company
assuming its proportionate share of the joint operations accounted for using the
equity method is combined with the Company. Management believes this
presentation is informative of the Company's financial condition since the
majority of the Company's underlying investment in its joint operations
consists of net current assets.
Proforma Condensed Combined Balance Sheet
as of September 30, 1996
<TABLE>
<CAPTION>
Proportionate
Share of Combined
Company Joint Operations Eliminations Company
<S> <C> <C> <C> <C>
Current assets $ 301,720 $ 780,909 $ - $ 1,082,629
Investments in joint operations 2,794,979 - (2,794,979) -
Property and other assets, net 299,388 3,402,234 (851,758) 2,849,864
---------- ---------- ---------- ----------
$ 3,396,087 $ 4,183,143 $(3,646,737) $ 3,932,493
========== ========== ========== ==========
Current liabilities $ 1,333,631 $ 536,406 $ - $ 1,870,037
Other liabilities - 3,114,246 (3,114,246) -
Stockholders' and partners' equity 2,062,456 532,491 (532,491) 2,062,456
---------- ---------- ---------- ----------
$ 3,396,087 $ 4,183,143 $(3,646,737) $ 3,932,493
========== ========== ========== ==========
</TABLE>
The Company requires substantial capital to pursue its operating strategies.
To date, the Company has relied upon net cash provided by financing activities
to fund its capital requirements and will continue to do so for the foreseeable
future. The Company secured debt financing in the amount of $2,000,000 in
November 1996 as discussed in the footnotes to the financial statements which
will assist the Company in its near term financing needs. However, the
Company has no firm commitments for external sources of financing upon which the
Company will rely for all of its planned 1997 business activities.
10
BALTIC INTERNATIONAL USA, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings, None
Item 2. Changes in Securities, None
Item 3. Defaults Upon Senior Securities, None
Item 4. Submission of Matters to a Vote of Security-Holders, None
Item 5. Other Information, None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits, None
(b) The Company filed a Current Report on Form 8-K dated August 30,
1996 pursuant to BDO Seidman, LLP informing the Company that it
was resigning from its position as the Company's accounting firm.
The Company filed a Current Report on Form 8-K dated October 16,
1996 to satisfy certain continued listing requirements necessary
in order to maintain the listing of its common stock on
The Nasdaq SmallCap Market.
The Company filed a Current Report on Form 8-K dated November 8,
1996 pursuant to the Company engaging Arthur Andersen LLP as its
independent accountants.
11
BALTIC INTERNATIONAL USA, INC.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BALTIC INTERNATIONAL USA, INC.
(Registrant)
Date: November 18, 1996 BY: /s/ Robert L. Knauss
------------------------------
Robert L. Knauss,
Chairman of the Board and
Chief Executive Officer
Date: November 18, 1996 BY: /s/ James W. Goodchild
------------------------------
James W. Goodchild,
Chief Operating and Financial
Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 59597 59597
<SECURITIES> 0 0
<RECEIVABLES> 131101 131101
<ALLOWANCES> 0 0
<INVENTORY> 56238 56238
<CURRENT-ASSETS> 301720 301720
<PP&E> 14690 14690
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 3396087 3396087
<CURRENT-LIABILITIES> 1333631 1333631
<BONDS> 0 0
0 0
2155000 2155000
<COMMON> 70976 70976
<OTHER-SE> (163520) (163520)
<TOTAL-LIABILITY-AND-EQUITY> 3396087 3396087
<SALES> 302493 722457
<TOTAL-REVENUES> 421634 1099114
<CGS> 166751 383053
<TOTAL-COSTS> 515085 2148388
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 20151 47513
<INCOME-PRETAX> (40890) (724152)
<INCOME-TAX> 19524 47428
<INCOME-CONTINUING> (60414) (771580)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (60414) (771580)
<EPS-PRIMARY> (0.01) (0.14)
<EPS-DILUTED> (0.01) (0.14)
</TABLE>
