<PAGE>
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 the Quarterly Period Ended March 31, 1998
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 number 0-27560
-------
ACT Teleconferencing, Inc.
- --------------------------------------------------------------------------------
(Name of small business issuer as specified in its charter)
Colorado 84-1132665
- ------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1658 Cole Blvd., Suite 130, Golden, Colorado 80401
- --------------------------------------------------------------------------------
(Address of principle executive offices) (Zip Code)
(303) 235-9000 (303) 233-0895
- --------------------------------------------------------------------------------
(Issuer's telephone number, including (Issuer's facsimile number,
area code) including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]
As of April 30, 1998, 3,615,458 shares of the issuer's common stock were
outstanding.
This report contains 13 pages.
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ACT TELECONFERENCING, INC.
FORM 10-QSB
Table of Contents
<TABLE>
<CAPTION>
PART I. Financial Information Page No.
<S> <C>
Item 1. Financial Statements 3
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flow 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 6. Exhibit Index 10
Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
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PART I -- FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
ACT Teleconferencing, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, 1997
1998
--------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,439,674 $ 451,434
Accounts receivable (net of allowances for doubtful accounts 3,396,494 2,885,125
of $25,238 and $18,992 for 1998 and 1997, respectively)
Prepaid expenses 438,786 203,673
Inventory 374,377 136,116
Available for sale marketable securities - 50,000
--------------------------------------------
Total current assets 6,649,331 3,726,348
Equipment:
Telecommunications equipment 2,818,613 2,651,395
Office equipment 2,153,304 1,910,606
Less: accumulated depreciation (1,267,627) (1,094,938)
--------------------------------------------
Total equipment net 3,704,290 3,467,063
Goodwill and other non-current assets 796,263 736,300
--------------------------------------------
Total assets $11,149,884 $ 7,929,711
============================================
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
<S> <C> <C>
Notes payable $ 946,609 $ 540,014
Accounts payable 1,639,540 1,349,337
Accrued liabilities 884,873 777,526
Current portion of long term debt 296,853 253,251
Income taxes payable 466,764 293,238
--------------------------------------------
Total current liabilities 4,234,639 3,213,366
Long-term debt 2,863,807 613,714
Deferred income taxes 118,941 117,454
Minority interest 724,907 607,244
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares
Authorized; none issued
Common stock, no par value; 10,000,000 shares
Authorized; 3,615,458 and 3,612,758 shares issued
and outstanding in 1998 and 1997, respectively 6,174,559 6,158,584
Accumulated deficit (2,889,227) (2,729,069)
Currency translation adjustment (77,742) (51,582)
Total shareholders' equity 3,207,590 3,377,933
--------------------------------------------
Total liabilities and shareholders' equity $11,149,884 $ 7,929,711
============================================
</TABLE>
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ACT Teleconferencing, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
-----------------------------------------
<S> <C> <C>
Net revenues $ 4,093,236 $ 2,117,654
Costs and expenses:
Cost of sales (1,984,658) (869,586)
Selling, general and administration costs (1,992,025) (1,137,103)
-----------------------------------------
Total costs and expenses (3,976,683) (2,006,689)
Income (loss) before taxes and minority interest 116,153 110,965
Provision for income taxes (168,007) (29,988)
-----------------------------------------
Income (loss) before minority interest (51,454) 80,977
Minority interest in earnings of consolidated subsidiary (108,704) (67,817)
-----------------------------------------
Net income (loss) $ (160,158) $ 13,160
=========================================
Basic and diluted earnings per share $(0.04) $0.00
=========================================
Weighted average number of shares outstanding 3,615,194 2,952,430
=========================================
</TABLE>
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ACT Teleconferencing, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1998 1997
-----------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ (160,158) $ 13,160
Adjustments to reconcile net income to
net cash used for operating activities:
Depreciation 172,689 59,615
Amortization of goodwill 6,657 4,510
Deferred income tax 1,487 (1,020)
Minority interest 117,663 67,817
-----------------------------------
Cash flow before changes in operating assets and liabilities: 138,338 144,082
Accounts receivable (511,369) (444,742)
Inventory (238,261) 1,406
Prepaid expenses and other assets (301,733) (57,656)
Accounts payable and accrued liabilities 397,550 340,597
Income taxes payable 173,526 25,357
-----------------------------------
Net cash provided by (used for) operating activities (341,949) 9,044
INVESTING ACTIVITIES
Property and equipment purchases (409,916) (301,918)
Sale of marketable securities 50,000 -
-----------------------------------
Net cash flow used by investing activities (359,916) (301,918)
FINANCING ACTIVITIES
Net proceeds from issuance (repayment) of debt 2,700,290 3,028
Net proceeds from issuance of common stock 15,975 15,000
-----------------------------------
Net cash provided by financing activities 2,716,265 18,028
Effect of change in exchange rate on cash (26,160) (24,496)
-----------------------------------
Net increase (decrease) in cash and cash equivalents $1,988,240 $(299,342)
Cash and cash equivalents, beginning of year $ 451,434 $ 621,742
Cash and cash equivalents, end of year 2,439,674 322,400
===================================
</TABLE>
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ACT Teleconferencing, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary of a fair presentation have
been included. Operating results for the three-month period ending March 31,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1997.
BUSINESS
Act Teleconferencing, Inc (the Company) is engaged in the business of providing
high-quality audio, data, and video conferencing products and services to
business clients. The Company operates in the United State, the United Kingdom,
the Netherlands, Belgium, France and Australia.
LONG TERM DEBT
At March 31, 1998, the Company had a $2,000,000 loan with Sirrom Capital
Corporation and Equitas, L.P. bearing interest at 13.50%. The note is secured by
a second lien on all eligible assets. Lenders will receive a warrant to purchase
6.0% of the company's fully diluted outstanding shares at a strike price of
$7.00 per share. In addition, beginning in year 2000 through 2002, additional
shares will accrue to the Lenders at a rate representing 1.0% of the fully
diluted shares outstanding per year until the loan is repaid in full. The loan
expires in March 31, 2003.
NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share is computed based upon the weighted average number
of shares of common stock outstanding during the period. Options and warrants
are not included in the computations since their effect is presently either
anti-dilutive or not material. In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, Earnings per Share, which was adopted
on December 31, 1997. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options has been excluded.
COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) was ($186,318) and ($11,336) for the quarters ended
March 31, 1998 and 1997, respectively. The difference between net loss and
comprehensive loss solely relates to foreign currency translation.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
The Management's Discussion and Analysis section of this report contains
forward-looking statements, which are subject to certain risks and
uncertainties. Certain such statements are repeated at the end of this
Management's Discussion and Analysis section together with specific
cautionary statements identifying factors that could cause actual results
to differ materially from current expectations contained in each such
statement. Forward-looking statements also may be implicit but not readily
identified within the context of other statements. In general, among the
factors that could affect the Company's actual results and could cause
results to differ from those contained in the forward-looking statements
are the continued ability of the Company to generate revenue growth in
audio teleconferencing, the general rate of development of the market for
videoconferencing services, and the available opportunities to explore new
international markets. Other factors could also cause actual results to
vary materially from the anticipated results covered in such forward-
looking statements.
OVERVIEW
The Company completed a strong first quarter in terms of revenue growth. First
quarter 1998 revenues grew by 93% over the first quarter of 1997, reflecting
continued growth in the market for audio teleconferencing services as well as
additional market share gains made by the Company.
Net loss after taxes and minority interest amounted to $160,158 in the first
quarter of 1998; a decline of $173,318 from the first quarter of 1997, due
mainly to continued investment in the Company's new European and Asia Pacific
hub operations.
The Company anticipates continued growth in teleconferencing revenues in its
established operations in North America and the United Kingdom. Revenues and
net income from these operations grew by 121%.
The market for videoconferencing continues to grow in terms of both the quality
of equipment and transmission as well as the diversity of application. The
Company is presently engaged in both video equipment and videobridging market
sectors.
Approximately 80% of the Company's revenues are derived from audio conferencing
and 20% from videoconferencing.
COMPONENTS OF REVENUE AND EXPENSE
The Company derives revenues principally from fees charged to clients for audio
and video conference "bridging" services which connect multiple parties to a
conference call, from fees for enhanced services and from the sale of
videoconferencing equipment units.
The costs of teleconferencing services consist of local and long-distance
telephone services, depreciation on equipment, salaries, benefits, and office
expenses of conference operators.
Selling, general and administrative costs consist of salaries, benefits, and
office expenses of the Company's administrative, market development, and sales
organizations.
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1998, COMPARED TO QUARTER ENDED MARCH, 1997
Net Revenues. Net revenues increased by 93% compared to the quarter ended March
31, 1997, to $4.1 million for the quarter ended March 31, 1998, primarily due to
increased sales of audio teleconferencing services. Revenue growth resulted
mainly from repeat sales to established customers and increased sales of
enhanced services as well as from new sales to new customers. During the
period, domestic (North
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American) operations accounted for 45% of net revenues, compared to 49% for the
first quarter of 1997. International revenues accounted for 55% of revenues
compared to 51% in the first quarter of 1997.
Cost of Teleconferencing Services. Cost of teleconferencing services increased
by 128% to $1,984,658 for the first quarter of 1998, compared to $869,586 for
the first quarter of 1997, reflecting the impact of increased sales levels and
new capacity expansions. Gross margin (net revenues less costs of conferencing
services divided by net revenues) decreased for the first quarter ended March
31, 1998 to 51.5% percent, compared to 58.9% achieved during the first quarter
of 1997. The decrease in gross margin reflects the entry into new markets where
lower prices and higher fixed costs are initially experienced to achieve certain
base volumes.
Selling, General and Administrative Costs. Selling, General, and Administrative
expenses for the first quarter were $1,992,025, or 49% of revenue, compared to
$1,137,103 or 54% of revenue for the first quarter of 1997. The 75% increase in
such expenses reflects an aggressive focus on audio and video conferencing sales
efforts, as well as development costs for the Company's new business units in
Europe and Asia Pacific and the entry into internet conferencing.
Income (Loss) Before Taxes and Minority Interest. Income before taxes and
minority interest amounted to $116,553, compared to $110,965 for the quarter
ending March 31, 1997. The 5% improvement was caused by the combination of
increased revenues, improved productivity and higher new business development
costs as described above.
Taxes on Income and Minority Interest. Taxes on income and minority interest
amounted to $276,711 for the quarter ended March 31, 1998, compared to $97,805
for the quarter ended March 31, 1997, primarily due to taxes paid on and
minority interest in earnings achieved by the Company's 60% majority-owned
United Kingdom subsidiary which pays full tax. The Company paid no United
States or other international income tax due to net operating losses incurred in
its United States and other international operations in previous years.
Net income (loss). Net loss amounted to $160,158 or a reduction of $173,318 for
the quarter.
LIQUIDITY AND CAPITAL RESOURCES (THREE MONTHS ENDED MARCH 31, 1998)
During the three months ended March 31, 1998, net cash increased by
approximately $2.0 million from December 1997. At March 31, 1998, the Company
had cash and cash equivalents of $2,439,674 compared to cash and cash
equivalents on hand at December 31, 1997 of $451,434.
The Company raised net proceeds of $2.0 million pursuant to the completion of a
subordinated debt financing arrangement executed with Sirrom Capital Corporation
and Equitas LP based in Nashville, Tennessee. Finance thus raised will be used
primarily to finance the growth in working capital due to sales growth.
Cash from operating activities before funding operating assets such as accounts
receivable amounted to $138,338 for the quarter ended March 31, 1998, compared
to $144,082 for the quarter ended March 31, 1997. Cash after financing operating
assets and liabilities amounted to a net outflow of $341,949 reflecting mainly
the significant growth in accounts receivable, inventory and prepaids compared
to net proceeds of $9,044 in 1997.
During the three-month period, the Company invested $409,916 in additional
equipment, to provide ongoing new technology and capacity to its United States,
European and Asia Pacific operations. The gross cash outflow of $701,865 (after
capital investment and before financing arrangements) was funded by a
combination of debt and lease finance amounting to $2.7 million and resulting in
a net cash inflow (before effect of exchange rate changes) amounting to $2.0
million.
The Company believes that, given the present rate of sales and profit growth in
its core audio teleconferencing business, it will have sufficient cash resources
to meet its needs for the next twelve months. The Company has further plans to
expand capacity and open new operations in new geographic
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locations and to develop its videoconferencing and internet conferencing
businesses. These expansion plans will be financed using a mix of lease
financing for capital equipment and the anticipated conversion of certain
remaining share warrants during the remainder of the year.
The company completed a post-effective amendment registration statement
concerning 712,497 publicly traded warrants, which are exercisable until March
2, 1999 at $5.00 per share. The gross proceeds from the above warrants, should
they be fully converted, would amount to approximately $3.5 million which would
also be used to fund the geographical expansion of the business.
FORWARD-LOOKING STATEMENTS
Statements made above, certain of which are summarized below, are forward-
looking statements that involve risks and uncertainties, and actual results may
be materially different. Factors that could cause actual results to differ
materially from those in the forward-looking statement include (but are not
limited to) the following:
THE COMPANY ANTICIPATES CONTINUED GROWTH IN TELECONFERENCING REVENUES IN ITS
ESTABLISHED OPERATIONS IN NORTH AMERICA AND THE UNITED KINGDOM. A significant
downturn in economic conditions generally or the development of alternative
technologies could render audio teleconferencing less effective and could affect
the rate of growth of teleconferencing revenues.
THE COMPANY BELIEVES THAT, GIVEN THE PRESENT RATE OF SALES AND PROFIT GROWTH IN
ITS CORE AUDIO TELECONFERENCING BUSINESS, IT HAS SUFFICIENT CASH RESOURCES TO
MEET ITS FINANCING NEEDS FOR THE COMING YEAR. Failure to maintain ongoing
profit margins, resulting in a significantly higher level of cash utilization,
could result in the Company deferring other expansion plans or could cause it to
seek additional financing in the capital markets for its future growth plans and
working capital needs.
THESE EXPANSION PLANS WILL BE FINANCED USING A MIX OF LEASE FINANCING FOR
CAPITAL EQUIPMENT AND THE ANTICIPATED CONVERSION OF CERTAIN REMAINING SHARE
WARRANTS DURING THE REMAINDER OF THE YEAR. If the Company's common stock
declines substantially or some other unforeseen event discourages warrant-
holders from exercising all or a substantial part of these warrants, the Company
would seek other financing for its growth.
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PART II -- OTHER INFORMATION
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
EXHIBIT INDEX
Exhibit No. Description
3.1/2/ Restated Articles of Incorporation of the Company dated
April 15, 1996
3.2/2/ Bylaws of the Company, amended as of April 15, 1996
4.1/1/ Form of specimen certificate for Common Stock of the Company
4.2/1/ Form of Unit Purchase Option to be issued by the Company to the
Underwriter
4.3/1/ Impound Agreement
4.4/1/ Lock-up Letter Agreement
10.1/1/ Stock Option Plan of 1991, as amended, authorizing 400,000 shares
of Common Stock for issuance pursuant to the Plan
10.2/1/ Form of Stock Option Agreement
10.3/1/ Form of Common Stock Purchase Warrant
10.4/1/ Form of Placement Agent Warrant
10.5/1/ Denver West Office Building Lease dated April 1, 1993, by and
between Denver West Office Building No. 6 Venture and the
Company, as amended
10.6/1/ Leases for United Kingdom facilities (First floor of Howard House)
dated September 29, 1993 and April 17, 1995, between Garfunkel &
Wanderer Limited and Reichwald Brothers
10.7/1/ Letter agreement dated May 31, 1995 with Worldcom regarding lease
of Amsterdam facilities
10.8/1/ Sublease Agreement with Integraf Corporation dated August 1995
for ACT Videoconferencing, Inc. premises
10.9/1/ Term Loan Agreement dated August 11, 1994, between the Company and
Norwest Bank, N.A., Boulder Colorado
10.10/1/ Split Dollar Insurance Agreement dated March 1, 1990, between the
Company and Gerald D. Van Eeckhout
10.11/1/ Service Agreement dated April 10, 1992 between David Holden and
ACT Teleconferencing Limited
10.14/1/ Agreement between Company and Gerald D. Van Eeckhout limiting his
compensation in 1996 and 1997
10.15/1/ Memorandum dated December 22, 1995 from director Seifert amending
Mr.Van Eeckhout's compensation
10.17/1/ Agreement to Exchange Stock between Apogee Robotics, Inc. and
Company
10.18/1/ Agreement between Company and Ronald J. Bach to borrow proceeds
from sale of Apogee Robotics common stock
10.19/3/ Form of Stock Option Plan of 1996
27.1 Financial Data Schedule
/1/ Exhibit incorporated by reference to the Company's Registration Statement on
Form SB-2, filed with the Securities and Exchange Commission on October 10,
1995, and amendments thereto. Exhibits incorporated by reference carry
exhibit numbers identical to those in the Registration Statement.
/2/ Incorporated by reference to the exhibit of the same number to the Company's
Form 10-QSB for the Quarter ended June 30, 1996, File No. 0-27560.
/3/ Incorporated by reference to the Company's Proxy Statement filed with the
Securities and Exchange Commission on April 30, 1997, File No. 0-27560.
REPORTS ON FORM 8-K
On January 14, 1998, the Company filed a Form 8-K describing the
Company's acquisition of 80% of the issued capital in MultiMedia and
Teleconferencing Systems Limited (M.a.T.S.) for a minimum purchase price
of $745,464 [$155,474 cash plus $589,990 of ACT common stock (81,378
shares x $7.25 per share)] and a maximum purchase price of $1,285,474
[$155,474 cash plus $1,130,000 of ACT common stock (155,862 common
shares at $7.25 per share)].
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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.
ACT TELECONFERENCING, INC.
DATE: May 15, 1997 By: /s/ Gavin J. Thomson
-----------------------
Gavin J. Thomson,
Chief Financial Officer
(Duly authorized officer and
Principal Financial Officer)
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
- --------------- ------------------------------------------------------------------------ --------------------------
<C> <S> <C>
3.1 Restated Articles of Incorporation of the Company dated April 15, 1996 Incorporated by reference
3.2 Bylaws of the Company, amended as of April 15, 1996 Incorporated by reference
4.1 Form of specimen certificate for Common Stock of the Company Incorporated by reference
4.2 Form of Unit Purchase Option to be issued by the Company to the
Underwriter Incorporated by reference
4.3 Impound Agreement Incorporated by reference
4.4 Lock-up Letter Agreement Incorporated by reference
10.1 Stock Option Plan of 1991, as amended, authorizing 400,000 shares of
Common Stock for issuance pursuant to the Plan Incorporated by reference
10.2 Form of Stock Option Agreement Incorporated by reference
10.3 Form of Common Stock Purchase Warrant Incorporated by reference
10.4 Form of Placement Agent Warrant Incorporated by reference
10.5 Denver West Office Building Lease dated April 1, 1993, by and between
Denver West Office Building No. 6 Venture and the Company, as amended Incorporated by reference
10.6 Leases for United Kingdom facilities (First floor of Howard House)
dated September 29, 1993 and April 17, 1995, between Garfunkel &
Wanderer Limited and Reichwald Brothers Limited, Landlord, and ACT
Teleconferencing Limited, Tenant Incorporated by reference
10.7 Letter agreement dated May 31, 1995 with Worldcom regarding lease of
Amsterdam facilities Incorporated by reference
10.8 Sublease Agreement with Integraf Corporation dated August 1995 for ACT
videoconferencing, Inc. premises Incorporated by reference
10.9 Term Loan Agreement dated August 11, 1994, between the Company and
Norwest Bank, N.A., Boulder, Colorado Incorporated by reference
10.10 Split Dollar Insurance Agreement dated March 1, 1990, between the
Company and Gerald D. Van Eeckhout Incorporated by reference
10.11 Service Agreement dated April 10, 1992 between David Holden and ACT
Teleconferencing Limited Incorporated by reference
10.14 Agreement between Company and Gerald D. Van Eeckhout limiting his
compensation in 1996 and 1997 Incorporated by reference
10.15 Memorandum dated December 22, 1995 from director Seifert amending Mr.
Van Eeckhout's compensation Incorporated by reference
10.17 Agreement to Exchange Stock between Apogee Robotics, Inc. and Company Incorporated by reference
10.18 Agreement between Company and Ronald J. Bach to borrow proceeds from
sale of Apogee Robotics common stock Incorporated by reference
10.19 Form of Stock Option Plan of 1996 Incorporated by reference
27.1 Financial Data Schedule Filed electronically
</TABLE>
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<TABLE> <S> <C>
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's unaudited March 31, 1998 financial statements and is qualified in it's
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,439,674
<SECURITIES> 0
<RECEIVABLES> 3,421,732
<ALLOWANCES> (25,238)
<INVENTORY> 374,377
<CURRENT-ASSETS> 6,649,331
<PP&E> 4,971,917
<DEPRECIATION> (1,267,627)
<TOTAL-ASSETS> 11,149,884
<CURRENT-LIABILITIES> 4,234,639
<BONDS> 0
0
0
<COMMON> 6,174,559
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,149,884
<SALES> 4,093,236
<TOTAL-REVENUES> 4,093,236
<CGS> 1,984,658
<TOTAL-COSTS> 3,976,683
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 116,553
<INCOME-TAX> (168,077)
<INCOME-CONTINUING> (160,158)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (160,158)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
