SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A-3
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the Quarterly Period Ended December 31, 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 number 1-14150
THE COMPANY DOCTOR
(Name of small business issuer as specified in its charter)
Delaware 72-1234136
(State of Incorporation) (I.R.S.Employer Identification No.)
5215 North O'Connor Blvd., Suite 1800
Irving, Texas 75039
(Address of principal executive offices)
(972) 401-8300
(IssuerOs telephone number)
Check whether the issuer (1) filed all reports required to be
filled 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 __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13, or 15 (d) of the Exchange Act
after the distribution of securities under a plan confirmed by court.
Yes __ No__
State the number of shares outstanding of each of the issuerOs
classes of common equity, as of the latest practicable date.
There were 5,017,008 shares of the Issuer's common stock, at par value
of $.01 per share,
outstanding as of December 31, 1996.
Transitional Small Business Disclosure Format (check one): Yes__ No_X
Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
Unaudited
Assets
<S>Current assets <C> <C>
Cash and cash equivalents $1,806,904 $5,636,433
Restricted cash 550,000 500,000
Short-term investments 1,646,214 4,250,357
Accounts receivable
Trade, less allowance for doubtful
accounts of $245,000 at December 31, 1996
and $105,000 at June 30, 1996 1,927,273 1,097,308
Related parties 227,938 113,117
Other 87,468 85,348
Prepaid expenses 311,214 97,767
Total current assets 6,557,011 8,780,330
Property and equipment 2,583,397 1,536,898
Less accumulated depreciation and
amortization (1,306,429) (659,394)
1,276,968 877,504
Other assets
Intangibles, net 9,014,383 1,688,314
Other assets 743,377 563,406
Investments 1,592,835 1,630,453
Total other assets 11,350,595 3,882,173
Total assets $19,184,574 $13,540,007
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $602,194 $1,271,357
Notes payable - due to sellers 3,158,207 987,010
Current maturities of capital lease
obligations 56,188 52,501
Accounts payable and accrued expenses 1,122,594 338,077
Claims payable 407,545 350,000
Total current liabilities 5,445,728 2,998,945
Long-term liabilities
Capital lease obligations, net of
current maturities 200,012 79,644
Notes payable - due to sellers 243,590 -
Claims payable 1,054,353 1,393,107
Total liabilities 6,943,683 4,471,696
Common stock subject to mandatory
registration rights, 430,004 (December
31, 1996) and $0 (June 30, 1996) shares
issued and outstanding 3,982,500 -
Stockholders' equity
Preferred stock, $.01 par value,
5,000,000 shares authorized Series A
convertible, no shares issued - -
Common stock, $.01 par value; 25,000,000
shares authorized; 4,587,004 and
4,676,494 shares issued and outstanding
at December 31, 1996 and June 30, 1996,
respectively 45,871 46,765
Additional paid-in-capital 9,567,936 10,255,346
Accumulated equity (1,355,416) (1,233,800)
Total stockholders' equity 8,258,391 9,068,311
Total liabilities and stockholders equity $19,184,574 $13,540,007
</TABLE>
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Three Months Ended
December 31,
1996 1995
(Unaudited)
<S> <C> <C>
Revenues $2,655,003 $1,036,533
Cost of services provided 1,413,042 512,554
General and administrative expenses 1,314,361 470,562
Marketing expenses 52,855 4,553
Development and acquisition costs 134,597 -
2,914,855 987,669
Income (loss) from operations (259,852) 48,864
Other income (expense)
Interest expense (133,369) (22,786)
Interest income and other 77,945 -
Total other income (expenses) (55,424) (22,786)
Net income (loss) before income taxes (315,276) 26,078
Income tax expense 9,000 -
Net income (loss) $(324,276) $26,078
Net income (loss) per common share $(.06) $.01
Weighted average common shares
outstanding 5,017,008 2,261,799
</TABLE>
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
December 31,
1996 1995
(Unaudited)
<S> <C> <C>
Revenues $5,444,001 $1,986,173
Cost of services provided 2,629,690 934,478
General and administrative expenses 2,750,640 918,655
Marketing expenses 114,927 29,203
Development and acquisition costs 222,482 -
5,717,739 1,882,336
Income (loss) from operations (273,738) 103,837
Other income (expense)
Interest expense (179,075) (48,766)
Interest income 174,197 -
Total other income (expenses) (4,878) (48,766)
Net (loss) before income taxes (278,616) 55,071
Income tax benefit 157,000 -
Net (loss) income $(121,616) $55,071
Net (loss) income per common share $ (.02) $ .02
Weighted average common shares 5,031,509 2,210,001
outstanding
</TABLE>
Consolidated Statements of Cash Flow
<TABLE>
<CAPTION>
For the Six Months Ended
December 31,
1996 1995
(Unaudited)
<S> <C> <C>
Cash flows from operating activities
Net (loss) income $(121,616) $55,071
Adjustments to reconcile net income to
net cash (used in) provided by operating
activities
Depreciation and amortization 340,005 69,246
Deferred tax asset (175,000) -
Adjustment to claims payable (123,372) -
Change in assets and liabilities
Accounts receivable (242,544) (74,952)
Prepaid expenses (207,331) (31,212)
Other assets (4,971) (32,190)
Checks written in excess of bank - (18,265)
balance
Accounts payable and accrued 635,801 (39,680)
expenses
Claims payable (157,837) -
64,751 (140,969)
Net cash (used in) provided by (56,865) (85,898)
operating activities
Cash flows from investing activities
Purchases of property and equipment (217,609) (40,762)
Cash acquired from medical practices 337,484 -
Purchase of investments (408,239) -
Purchase of intangibles (414,004) -
Net cash (used in) provided by (702,368) (40,762)
investing activities
Cash flows from financing activities
(Payments on) proceeds from line-of- (669,163) 81,690
credit and note payable
Proceeds from sales of equity 12,130 -
Payments on notes payable and due to (2,372,713) -
seller
Net proceeds from private placement - 445,000
preferred stock
Deferred offerings costs paid - (269,687)
Payments on capital leases (40,550) (119,539)
Net cash (used in) provided by (3,070,296) 137,464
financing activities
Cash (decrease) increase (3,829,529) 10,804
Cash at beginning of period 5,636,433 0
Cash at end of period $1,806,904 $10,804
</TABLE>
Supplemental disclosures of interest paid:
Interest paid on borrowings for the six months ended December
31, 1995 and December 31, 1996 was $48,766 and $39,348,
respectively.
Consolidated Statements of Cash Flow
Continued from previous page.
Supplemental disclosure of noncash investing and financing
activities:
In the six months ended December 31, 1996, the Company added
three medical practices, and reported each on a Form 8-K. The
purchase prices combined were allocated as follows:
<TABLE>
<CAPTION>
<S> <C>
Assets acquired
Cash $ 337,484
Accounts receivable 704,362
Property and equipment 138,731
Prepaid expense and other 6,116
1,186,693
Liabilities assumed
Accounts payable and accrued expenses 247,716
Net assets acquired 938,977
Fair value of common stock issued 3,282,066
Due to sellers - accounts and notes
payable - current 4,481,944
Due to sellers - notes payable - long-
term 305,556
$7,130,589
</TABLE>
Additionally, the Company acquired $164,605 of property and equipment
under capital leases.
Note 1 - Summary of Accounting Policies
The summary of the Company's significant accounting policies are
incorporated by reference to the Company's Annual Report on Form 10-
KSB for the fiscal year ended June 30, 1996.
The accompanying unaudited condensed financial statements reflect all
adjustments which, in the opinion of management, are necessary for a
fair presentation of the results of operations, financial position
and cash flows. The results of the interim period are not
necessarily indicative of the results for the full year.
Reclassifications
Certain amounts in the December 31, 1995 consolidated financial
statements have been reclassified to conform with the December 31,
1996 presentation.
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
Forward-Looking Statements
The statements contained in this Report on Form 10-QSB that are not
purely historical are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding the
Company's expectations, hopes, intentions or strategies regarding the
future. All forward-looking statements included in this document are
based on information available to the Company on the date hereof, and
the Company assumes no obligation to update any such forward-looking
statements. It is important to note that the Company's actual
results could differ materially from those in such forward-looking
statements. Among the factors that could cause actual results to
differ materially are the risk factors set forth in the Company's
Registration Statement on Form SB-2 (Registration No. 33-99530-D).
The reader should consult these risk factors as well as risk factors
listed from time to time in the Company's reports on Forms 10-QSB, 10-
KSB and filings under the Securities Act of 1933, as amended.
These forward-looking statements include the plans and objectives of
management for future operations, including plans and objectives
relating to the possible further capitalization of the insurance
subsidiary, acquisitions of additional complementary medical
practices, establishment and management of new clinics, and
obtainment of additional financing.
The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties.
Assumptions relating to the foregoing involve judgments with respect
to, among other things, the Company's ability to secure financing for
acquisitions and capital expenditures, future economic, competitive
and market conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes
that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could be inaccurate and,
therefore, there can be no assurance that the forward-looking
statements included in this Form 10-QSB will prove to be accurate.
In addition, the business and operations of the Company are subject
to substantial risks which increase the uncertainty inherent in such
forward-looking statements. These risk factors are discussed in
detail in the Company's Registration Statement on Form SB-2 which was
declared effective by the Securities and Exchange Commission on
February 6, 1996 (Registration No. 33-99530-D). Any of the other
factors disclosed under "Risk Factors" in such Registration Statement
could cause the Company's revenues or net income, or growth in
revenues or net income, to differ materially from prior results.
Budgeting and other management decisions are subjective in many
respects and thus susceptible to interpretations and periodic
revisions based on actual experience and business developments, the
impact of which may cause the Company to alter its finance,
marketing, capital expenditure or other budgets, which may in turn
affect the Company's results of operations. In light of these
significant uncertainties inherent in forward-looking information
included herein, the inclusion of such information should not be
regarded as a representation by the Company or any other person that
the objectives or plans of the Company will be achieved.
Liquidity and Capital Resources
As of December 31, 1996, the Company's principal sources of liquidity
included cash and cash equivalents of $1,806,904, restricted cash of
$550,000 and other current assets totaling $4,200,107 resulting in
total current assets of $6,557,011. Current liabilities were
$5,445,728 which resulted in working capital of $1,111,283 and a
current ratio of 1.20 to 1. The Company also had investments of
$1.593 million in "other assets", consisting of U.S. treasury notes
maturing in excess of one year from December 31, 1996, and therefore
classified as long-term assets. These U.S. treasury notes could be
sold and converted to cash at any time, and would effectively
increase working capital to $2,704,118 and increase the current ratio
to 1.50 to 1.
During the six months ended December 31, 1996, the Company's
liquidity decreased primarily due to acquisitions of complementary
medical practices undertaken by the Company's affiliate, The
Physician Group, and due to the acquisition and capitalization of the
insurance subsidiary. The Company anticipates that, in future
periods, the Company and The Physician Group will seek to conclude
additional acquisitions of physicians' practices and the Company's
continued capitalization of the insurance subsidiary. Based on this
expectation, the Company has initiated discussions with institutional
lenders for the purpose of securing a working capital and/or
acquisition credit facility. Should the Company be unsuccessful in
securing a facility of this nature, or in securing other financing,
the Company could be required to reduce or eliminate acquisition
activities. The Company will require additional financing if
acquisitions continue in future periods at historical rates.
The Company currently has no commitments for capital
expenditures, although the Company anticipates that its working
capital needs and capital expenditures will increase as the Company
continues its expansion. The expense of opening of new facilities,
which may include the leasing or purchase of capital equipment
including office, computer and medical equipment, can be substantial.
The Company estimates that each of the facilities managed by it
requires a minimum of $80,000 of medical equipment. To the extent
capital equipment can be leased at a reasonable cost, the Company
anticipates leasing such capital equipment in order to conserve
working capital. Conversely, if the interest expense associated with
the leasing of capital equipment is unacceptable to the Company, the
Company may purchase such equipment from the funds allocated to the
opening of new facilities. The Company may also acquire equipment in
acquisitions of practices.
In November 1995, the Company raised $500,000 of gross proceeds
($397,500 in net proceeds) by issuing a total of 400,000 shares of
Series A Convertible Preferred Stock. Each share of Preferred Stock
automatically converted into one share of the Company's Common Stock
on the completion of the Company's initial public offering. Proceeds
of the private offering were used to reduce accounts payable, to pay
expenses associated with the offering and to fund working capital.
The Company closed its initial public offering in February 1996. The
Company sold a total of 1,840,000 Units, each Unit consisting of one
share of Common Stock and one Warrant to purchase an additional share
of Common Stock. The Units were sold at a price of $5.25 per Unit
providing the Company with gross offering proceeds of $9.66 million.
After payment of expenses associated with the offering, the Company
received proceeds in excess of $7.9 million. Since the offering, the
Company has used a significant portion of the net proceeds from the
offering: 1) to finance the acquisition and capitalization of an
insurance company subsidiary; 2) to add five complementary medical
clinics; 3) to establish and begin managing a new clinic; 4) to
expand sales and marketing programs; and 5) for other operational
purposes.
The transactions relating to the five medical practices now managed
by the Company were each reported on Form 8-K. The transactions were
effective: 1) February 1996, in Lancaster, Texas (a Dallas suburb);
2) May 1996, in Baytown, Texas (a Houston suburb); 3) July 1996, in
El Paso, Texas 4) July 1996, in Carrollton, Texas (a Dallas suburb);
and 5) August 1996, in central Fort Worth, Texas. The acquisition of
the insurance company subsidiary occurred on June 30, 1996, as
reported on Form 8-K dated July 9, 1996. The cash payments due in
four of the five medical practice transactions and the insurance
subsidiary acquisition were paid in the quarter ended September 30,
1996. The acquisition of the insurance subsidiary contributed assets
including cash of $1.1 million and short-term investments of
$999,000, consisting of $949,000 in U.S. treasury bills and $50,000
in a certificate of deposit. Those assets are partially offset by
the insurance subsidiary claims of $1.462 million estimated to be
payable over the course of several years.
In connection with the initial public offering, certain stockholders
deposited a total of 150,000 shares of common stock into an escrow
account. The shares of common stock were to be released to the
stockholders only if the Company's earnings per share for the year
ended December 31, 1996 equaled or exceeded $.25 per share. The
earnings requirement was not satisfied, and the 150,000 shares shall
be canceled and returned to the Company's authorized but unissued
common stock.
Results of Operations
The following table sets forth, for the periods indicated, the
percentage of total revenues represented by certain items included in
the Company's Statements of Operations:
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1996 1995
<S> <C> <C>
Revenues
Total revenues 100.0% 100.0%
Costs
Cost of services provided 48.3 47.0
General and administrative 50.5 46.3
Marketing expense 2.1 1.5
Development/acquisition costs 4.1 -
Total costs 105.0 94.8
(Loss) income from operations (5.0) 5.2
Other income (expense)
Interest income 3.2 -
Interest expense (3.3) (2.5)
Total other income (expenses) (.1) (2.5)
(Loss) before income taxes (5.1) 2.7
Income tax benefit (expense) 2.9 -
Net income (2.2)% 2.7%
</TABLE>
Comparison of Six Months Ended December 31, 1996 and 1995
Revenues. Net revenues for the six months ended December 31, 1996
increased by $3,457,828 or 174.1% to $5,444,001 from the $1,986,173
revenue level achieved for the same six month period ended December
31, 1995. Revenues are derived primarily from the management of
physician practices engaged in the diagnosis, treatment and
management of work-related injuries and illnesses and from other
occupational health care services such as employment-related physical
examinations, drug and alcohol testing, functional capacity testing
and other related programs. The growth in the current period is
attributable to managements efforts related to four factors: 1) the
addition of five medical practices; 2) the Company's ability to
capture additional market share; 3) the further development of the
facilities managed by the Company, and 4) the start-up of a clinic in
south Fort Worth, Texas in April 1996. The Company anticipates all
four factors will continue to improve future revenues. Same facility
growth in the five medical practices acquired and the start-up clinic
in south Ft. Worth are anticipated to parallel growth in existing
clinics in the future. The Company has experienced same facility
revenue growth of 21% on its four existing facilities in the six
months ended December 31, 1996 over the same six months one year ago.
The addition of the five medical practices commencing February 1996
generated revenue in the six months ended December 31, 1996, whereas
there was no revenue from these facilities in the six months ended
December 31, 1995. Revenues in the six month period ended December
31 reflect some seasonality. From November through January, factors
such as plant closings, vacations and holidays result in fewer
occupational injuries and illnesses. Also, employers generally hire
fewer employees in the calendar year's fourth quarter, thus reducing
the number of pre-hiring physical examinations and drug and alcohol
tests during this period. Accordingly, revenues and net income
during the Company's first and second fiscal quarters of each year
(quarters ended September and December), will tend to be somewhat
lower than the remaining quarters of the fiscal year.
Cost of Services Provided. Cost of services provided for the six
months ended December 31, 1996 was $2,629,690, an increase of
$1,695,212 or 181.4% from the comparable 1995 period. As a percent
of net revenues, cost of services was 48.3%, an increase of 1.2% from
the 47.1% level of the same six month period one year ago. Although
these expenses are largely variable, they were negatively affected by
the more pronounced decline in revenue due to seasonal factors.
General and Administrative. General and administrative expenses for
the six months ended December 31, 1996, were $2,750,640, an increase
of $1,831,985, or 199.4%, over expenses of $918,655 in the same
period in 1995. As a percent of revenues, general and administrative
expenses were 50.5%, an increase of 4.2% from 46.3% for the same six
month period a year ago. The increase over the prior year was
accounted for by the larger revenue base, the increased costs
associated with becoming a public company, indirect expenses related
to the expansion activity commenced in February 1996, and some
general and administrative expenses for the insurance subsidiary.
Since these expenses are largely fixed, they were negatively impacted
by the historical seasonal decline in revenues.
Marketing Expenses. Marketing expenses were $114,927 at December 31,
1996 compared to $29,203 at December 31, 1995, or 2.1% compared to
1.5% of revenues during the respective periods. The addition of
medical practices was the primary factor contributing to the increase
over the six months ended December 31, 1995. The Company does plan
to maintain the current level of activity into the future to continue
to market to existing clients and new markets.
Development and Acquisition Costs. The Company had no development
and acquisition costs in the December 1995 quarter, but had $222,482
of such costs in the six months ended December 31, 1996. These costs
equaled 4.1% of revenues in the 1996 period and were a result of the
Company's expansion activities in two major areas: (1) pursuing and
negotiating affiliations or agreements with physicians who have
established occupational medicine practices or patient bases which
can be served in an occupational medical setting; and (2) development
costs for the insurance subsidiary.
Other Income or Expense. Interest income for the six months ended
December 31, 1996 of $174,197 was 3.2% of revenues, as compared to no
interest income for the same six months in 1995. Interest income was
earned from funds invested from the proceeds of the initial public
offering and from the interest bearing investments held by the
insurance subsidiary. Interest expense increased in the six months
ended December 31, 1996 to $179,075 from $48,776 for the six months
ended December 31, 1995. A significant portion of the
existing debt at December 31, 1996 was incurred in connection with
the acquisition of five clinics approximately mid-way through the six
month period. Accordingly, interest expense increased in the current
six months and the Company anticipates interest expense to remain
significant until the debt is repaid.
Net Income. As a result of the factors described above, in
particular, the factors contributing to increased revenues, the
Company had a net loss of $278,616 before income tax in the six months
ended December 31, 1996, or (5.1)% of revenues, as compared to $55,071
of net income, or 2.8% of revenues, in the six months ended December
31, 1995. In the six month period ended December 31, 1996, net
loss after a net income tax benefit of $157,000 totaled $121,616,
or (2.2)% of revenues, as compared to $55,071 net income, or 2.8% of
revenues in the six months ended December 31, 1995. At June 30,
1996, the Company had approximately $1.149 million of net operating
loss carryforwards (for income tax reporting purposes) which expire
in the years 2008 through 2010. However, the use of net operating
loss carryforwards may be limited or reduced due to the change in
ownership as a result of the February 1996 public offering, and,
accordingly, the Company may be able to utilize only a portion of its
net operating loss carryforwards. The impairment of the tax benefit
as a result of the net operating loss carryforwards was reduced from
$324,000 in the six months ended December 31, 1996 due to the
addition of medical practices during that period, and the historical
profitability of such practices, resulting in a $175,000 deferred tax
benefit on the income statement. Additionally, the Company has accrued
$18,000 of franchise taxes due certain states resulting in a $157,000
net deferred tax benefit.
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
27 Financial data schedule
(b) Reports on Form 8-K
<TABLE>
<CAPTION>
Type Date of Event Event Reported
<S> <C> <C>
Form 8-K November 4, 1996 Authorization of plan to
repurchase outstanding
common stock.
Form 8-K September 20, 1996 Acquisition of Beltline
North Occupational Health
Clinic.
Form 8-K/A August 21, 1996 Financial statements and
proforma for acquisition
of The Doctors Inn,
Incorporated.
Form 8-K/A August 28, 1996 Financial statements and
proforma for acquisition
of the Northside Family
Medical Center.
</TABLE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
THE COMPANY DOCTOR
(Registrant)
Date: May 14, 1997 By: /s/ Shaun P. Mahoney
Shaun P. Mahoney
Chief Financial Officer
Date: May 14, 1997 By: /s/ Donald F. Angle
Donald F. Angle, M.D.
Chairman, President, Chief
Executive Officer,
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-END> DEC-31-1996 DEC-31-1996
<CASH> 1,806,904 1,806,904
<SECURITIES> 1,646,214 1,646,214
<RECEIVABLES> 2,487,679 2,487,679
<ALLOWANCES> 245,000 245,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 6,557,011 6,557,011
<PP&E> 2,583,397 2,583,397
<DEPRECIATION> 1,306,429 1,306,429
<TOTAL-ASSETS> 19,184,574 19,184,574
<CURRENT-LIABILITIES> 5,445,728 5,445,728
<BONDS> 0 0
0 0
0 0
<COMMON> 9,613,807 9,613,807
<OTHER-SE> (1,355,416) (1,355,416)
<TOTAL-LIABILITY-AND-EQUITY> 19,184,574 19,184,574
<SALES> 2,655,003 5,444,001
<TOTAL-REVENUES> 2,655,003 5,444,001
<CGS> 1,413,042 2,629,690
<TOTAL-COSTS> 2,914,855 5,717,739
<OTHER-EXPENSES> (77,945) (174,197)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 133,369 179,075
<INCOME-PRETAX> (315,276) (278,616)
<INCOME-TAX> 9,000 (157,000)
<INCOME-CONTINUING> (324,276) (121,616)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (324,276) (121,616)
<EPS-PRIMARY> (.06) (.02)
<EPS-DILUTED> 0 0
</TABLE>
