<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED JUNE 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM TO
Commission file number 0-25366
-------
AUSTINS STEAKS & SALOON, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 86-0723400
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
6940 "O" Street, Suite 334
Lincoln, Nebraska 68510
(Address of principal executive offices)
(402) 466-2333
(Issuer's telephone number)
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 July 31, 1996, there were 2,331,052 shares of the issuer's common stock
outstanding.
<PAGE>
Part I: Financial Statements
Item 1 - FINANCIAL STATEMENTS
AUSTINS STEAKS & SALOON, INC.
Consolidated Balance Sheets
as of June 30, 1996 and December 31, 1995
June 30,
1996 December 31,
(unaudited) 1995
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ - $ -
Inventories 150,500 111,913
Prepaid expenses & other current assets 203,300 310,938
Preopening costs - 255,512
---------- ----------
Total current assets 353,800 678,363
---------- ----------
Equipment 1,963,948 1,761,768
Leasehold improvements 3,126,499 2,852,730
---------- ----------
5,090,447 4,614,498
Accumulated depreciation & amortization (991,314) (763,093)
---------- ----------
Equipment & leasehold improvements, net 4,099,133 3,851,405
---------- ----------
Intangibles, net 687,076 701,797
Note receivable from officer - 50,000
Other assets 1,027,870 1,092,058
---------- ----------
$6,167,879 $6,373,623
---------- ----------
---------- ----------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 97,554 $ 305,850
Accounts payable 763,876 419,180
Interest payable 13,124 -
Unredeemed gift certificates 40,320 125,777
Other notes payable-shareholders 25,000 -
Notes payable to bank 855,914 550,000
Real estate mortgage note payable 397,175 400,049
Reserve for loss on abandonment 202,784 -
---------- ----------
Total current liabilities 2,395,747 1,800,856
---------- ----------
STOCKHOLDERS' EQUITY
Common stock ($0.01 par value; 7,500,000
and 20,000,000 shares authorized; 2,331,052
and 1,910,000 shares issued and outstanding) 23,311 19,100
Additional paid-in capital 5,487,511 4,991,722
Accumulated deficit (1,738,690) (438,055)
---------- ----------
Total stockholders' equity 3,772,132 4,572,767
---------- ----------
$6,167,879 $6,373,623
---------- ----------
---------- ----------
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30 ended June 30
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $2,658,244 $2,522,292 $5,451,150 $5,050,151
Costs and expenses:
Cost of sales 1,845,120 1,674,292 3,848,303 3,355,213
Restaurant operating expenses 688,724 591,346 1,516,609 1,163,401
Amortization of preopening costs - 68,336 - 118,191
--------- --------- --------- ---------
Restaurant costs and expenses 2,533,844 2,333,974 5,364,912 4,636,805
--------- --------- --------- ---------
Restaurant operating income 124,400 188,318 86,238 413,346
General and administrative 178,317 228,016 795,738 478,509
Provision for loss on restaurant closing - - 250,000 -
--------- --------- --------- ---------
Loss from operations (53,917) (39,698) (959,500) (65,163)
Other expenses (income):
Interest (income) expense, net 38,281 (30,976) 85,623 (47,284)
--------- --------- --------- ---------
Loss before income taxes and cumulative
effect on change in accounting principle (92,198) (8,722) (1,045,123) (17,879)
Income tax benefit - 3,000 - 6,000
--------- --------- --------- ---------
Loss before cumulative
effect on change in accounting principle (92,198) (5,722) (1,045,123) (11,879)
--------- --------- --------- ---------
--------- --------- --------- ---------
Cumulative effect on prior years
of change in accounting principle (see Note 1b) - - (255,512) -
--------- --------- --------- ---------
Net loss $(92,198) $(5,722) $(1,300,635) $(11,879)
--------- --------- ----------- ---------
Net loss per share $(0.05) $(0.00) $(0.67) $(0.01)
------ ------ ------ ------
Weighted average number of common
shares outstanding 1,974,031 1,900,000 1,937,016 1,789,503
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statement Of Changes In Stockholders' Equity
for the six months ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-In (Accumulated
Shares Dollars Capital Deficit) Total
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1995 1,910,000 $19,100 $4,991,722 $ (438,055) $ 4,572,767
Issuance of shares 421,052 4,211 495,789 - 500,000
Net loss - - - $(1,300,635) $(1,300,635)
---------- ---------- ----------- ----------- -----------
Balances, June 30, 1996 2,331,052 $23,311 $5,487,511 $(1,738,690) $ 3,772,132
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statements Of Cash Flows
for the six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,300,635) $ (11,879)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Cumulative effect of change in accounting principle 255,512 -
Depreciation and amortization 255,816 147,125
Loss on sale of equipment 7,199 -
Deferred income taxes - (6,000)
Reserve for loss on restaurant closing 250,000 -
Write-off of note receivable from officer 50,000 -
Write-off of other assets 169,914 -
Write off of equipment 23,529 -
Changes in assets and liabilities:
Inventories (38,587) 3,170
Prepaid expenses and other current assets 107,638 (25,236)
Preopening costs - 10,429
Other assets - (435,470)
Accounts payable 344,696 (139,771)
Interest payable 13,124 -
Unredeemed gift certificates (85,457) (90,303)
Due to stockholder and related parties - (10,506)
Reserve for loss on abandonment (47,216) -
---------- ----------
Net cash provided by (used in) operating activities 5,533 (558,441)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the maturity of certificates of deposit - 290,000
Proceeds from sale of equipment 9,500 -
Purchase of equipment and leasehold improvements (529,051) (724,720)
Increase in other assets (105,726) -
---------- ----------
Net cash used in investing activities (625,277) (434,720)
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of cash overdraft (208,296) -
Payments on debt (2,874) (990,000)
Proceeds from debt 830,914 535,925
Proceeds from the issuance of common stock - 3,407,500
---------- ----------
Net cash provided by financing activities 619,744 2,953,425
---------- ----------
Net increase in cash and cash equivalents - 1,960,264
Cash and cash equivalents, beginning of period - 117,912
--------- ---------
Cash and cash equivalents, end of period $ - $2,078,176
---------- ----------
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Notes To Consolidated Financial Statements
(unaudited)
1. Summary of Significant Accounting Policies
a) Basis Of Presentation
In the opinion of management, the accompanying unaudited financial
statements contain all normal recurring adjustments necessary for a
fair presentation of financial position and results of operations and
cash flows for the periods presented.
A summary of the significant accounting policies followed by Austins
Steaks & Saloon, Inc. ("Austins" or the "Company") are set forth in
the Notes To Financial Statements in the company's 1995 Annual Report
on Form 10-KSB filed with the Securities and Exchange Commission.
These financial statements should be read in conjunction with the
financial statements included in the 1995 Annual Report on Form 10-
KSB.
b) Change in Method of Accounting
As of January 1, 1996, the Company changed the method of accounting
for pre-opening costs. Labor costs and certain other costs relating
to opening of new restaurants will be expenses as incurred.
Previously, such costs were capitalized and amortized over a 12 month
period on a straight-line basis. Although some retailers capitalize
pre-opening costs, the Company believes expensing such costs as
incurred is preferable and results in a more meaningful presentation
of the Company's working capital. The cumulative effect of the change
of $225,412 represents the reversal of the capitalized pre-opening
costs as of December 31, 1995. The effect of this change for the six
month period ending June 30, 1996, was to decrease the loss before
cumulative effect of the change in accounting principle by $95,167
($0.05 per average common share). On a pro forma basis, had this
change occurred effective January 1, 1995, net loss would decrease by
$11,432 for the six month period ending June 30, 1995 with a negligible
effect on loss per average common share.
2. Loss on Closing of Restaurant
On March 21, 1996 the Company closed its Columbia, Missouri
restaurant. This restaurant was closed due to its operating
performance not meeting the Company's expectations. The estimated
closing costs of $250,000 consist of the non-realizable value of the
equipment and leasehold improvements, expected loss on lease, and the
related costs to dispose of the unit.
<PAGE>
3. Other Assets
Other assets consisted of the following:
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(unaudited) 1995
----------- ------------
<S> <C> <C>
Investment - land $ 533,183 $ 533,183
Liquor licenses 451,489 342,637
Deposits - 92,466
Organization costs, net 42,149 55,172
Other 1,049 68,600
---------- ----------
$1,027,870 $1,092,058
---------- ----------
---------- ----------
</TABLE>
4. Notes Payable
Notes payable consisted of the following:
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(unaudited) 1995
----------- ------------
<S> <C> <C>
Note payable to shareholder:
Paul C. Schorr, III (due on demand, interest rate equal to
the rate presently being charged by First National Bank of Omaha) 25,000 -
-------- --------
$ 25,000 $ -
-------- --------
-------- --------
Notes payable to bank:
First National Bank of Omaha (due December 31, 1996,
interest rate at bank's prime rate) 700,000 550,000
First State Bank Santa Fe (due January 24, 1997, interest at
Wall Street Journal prime rate plus 2.0%, collateralized by New
Mexico liquor license #2668) 85,139 -
First State Bank Santa Fe (due October 22, 1996, interest at
Wall Street Journal prime rate plus 2.0%, collateralized by
New Mexico liquor license #2532) 70,775 -
-------- --------
$855,914 $550,000
-------- --------
-------- --------
Real estate mortgage note payable (Amrep Southwest, Inc.,
due December 31, 1996, interest at 11% per annum, collateralized
by Real Estate) $397,175 $400,049
-------- --------
-------- --------
</TABLE>
On June 12, 1996, notes payable to shareholders totaling $500,000 were exchanged
for 421,052 shares of common stock.
<PAGE>
5. Authorized Shares
Pursuant to stockholder approval at the Company's 1995 annual meeting, the
number of shares of common stock authorized was reduced from 20,000,000 to
7,500,000 shares. This change was filed in the office of the Secretary of State
of Delaware on January 24, 1996, and became effective on that date.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
The Company currently operates eight steakhouse restaurants: Four are located in
Omaha, Nebraska; and one each is located in Lincoln, Nebraska; Scottsdale,
Arizona; Santa Fe, New Mexico; and Albuquerque, New Mexico. The Omaha
restaurants were opened in September 1989, January 1992, December 1992, and
January 1996; the Santa Fe restaurant was opened in April 1994; the Lincoln
restaurant in December 1994; the Albuquerque restaurant was opened in February
1995; and the Scottsdale restaurant was opened in December 1995. On March 21,
1996 the company closed its Columbia, Missouri restaurant which opened in
November 1993.
RESULTS OF OPERATIONS
The following table sets forth for the periods presented the percentage
relationship to net sales of certain items included in the Consolidated
Statement of Operations.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
------------------ ----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
Costs and expenses:
Cost of sales 69.4 66.4 70.6 66.5
Restaurant operating expenses 25.9 23.4 27.8 23.0
Amortization of pre-opening costs - 2.7 - 2.3
------ ------ ------ ------
Restaurant costs and expenses 95.3 92.5 98.4 91.8
------ ------ ------ ------
Restaurant operating income 4.7 7.5 1.6 8.2
------ ------ ------ ------
General and administrative 6.7 9.0 14.6 9.4
Provision for loss on restaurant closing - - 4.6 -
------ ------ ------ ------
Loss from operations (2.0) (1.5) (17.6) (1.2)
Other expenses (income):
Interest (income) expense, net 1.5 (1.2) 1.6 (0.9)
Loss before income taxes and cumulative effect
on change of accounting principle (3.5) (0.3) (19.2) (0.3)
Income tax (benefit) - (0.1) - (0.1)
------ ------ ------ ------
Loss before cumulative effect
on change of accounting principle (3.5) (0.2) (19.2) (0.2)
Cumulative effect on prior years change in
accounting principle - - (4.7) -
------ ------ ------ ------
Net loss (3.5)% (0.2)% (23.9)% (0.2)%
------ ------ ------ ------
------ ------ ------ ------
Store data:
Number of restaurants open, beginning of period 8 7 8 6
Number of restaurants open, end of period 8 7 8 7
</TABLE>
<PAGE>
QUARTER AND YEAR-TO-DATE ENDED JUNE 30, 1996 COMPARED TO QUARTER
ENDED JUNE 30, 1995
Net sales for the second quarter ended June 30, 1996 were $2.7 million, a 5%
increase from the second quarter 1995 revenues of $2.5 million. For the six
months ended June 30, 1996, net sales increased 8% to $5.5 million from net
sales of $5.1 million in the comparable 1995 period. For the quarter ended June
30, 1996 net sales include the operations of eight restaurants for the entire
period. Net sales for the quarter ended June 30, 1995 include the operations of
seven restaurants for the entire period. For the year-to-date ended June 30,
1996, net sales include the operations of seven restaurants for the entire
period, an eighth restaurant (Columbia) for approximately three months and a
ninth restaurant (Old Market) for five months. For the six months ended June
30, 1995, net sales include operation of six restaurants for the entire period,
and a seventh restaurant (Albuquerque) for four months. The increase in net
sales is due to the additional restaurants in operations during 1996. During
the first six months of 1996, same store sales for restaurants open for more
than one year decreased by 18% primarily because of decreased revenues from the
Company's three mature Omaha stores. Increased competition, road construction,
and the effect of expanded gambling with two new riverboat casinos opening
within a 10 mile vicinity of the Omaha stores contributed to the decrease.
Excluding the three mature Omaha units, same store sales decreased 2% during the
first six months of 1996 compared to the prior year. The Company has increased
food promotions to help enhance same store sales.
Cost of sales (consisting primarily of food, beverage, and restaurant labor
costs) increased 10% to $1.8 million (or 69.4% of net sales) during the second
quarter of 1996, compared to $1.7 million (or 66.4% of net sales) in the 1995
second quarter. For the six month period ended June 30, 1996, cost of sales
were $3.8 million (or 70.6% of net sales), a 15% increase from $3.4 million (or
66.5% of net sales) in the comparable 1995 period. The increase in cost of
sales is primarily due to the additional restaurants in operation during 1996,
as noted above. The Company expect cost of sales to approximate their current
levels in future periods, when expressed as a percentage of net sales. The cost
of sales increased as a percentage of net sales from the first quarter to the
second quarter due to an increase of in-store promotions.
Restaurant operating expenses were $689,000 (or 25.9% of net sales) during the
second quarter of 1996, compared to $591,000 (or 23.4% of net sales) in the
comparable 1995 period. During the first six months of 1996, the costs rose 30%
to $1.5 million (or 27.8% of net sales) from $1.2 million (or 23.0% of net
sales) in the first six months of 1995. Restaurant operating expenses represent
primarily the costs of occupancy (including rent, depreciation, maintenance, and
utilities), and various related costs. The increase, as a percentage of net
sales, during the first six months of 1996 is due primarily to the relatively
fixed nature of occupancy and advertising costs of the Company's new locations
and lower same store sales volumes, as noted above.
Amortization of pre-opening costs for 1995 was $68,000 (or 2.7% of net sales)
for the second quarter and $118,000 (or 2.3% of net sales) for the six months
ended June 30, 1995. The decrease is due to the $255,512 cumulative effect of
the change in accounting principle during the first quarter of 1996. There was
$63,348 of additional pre-opening costs expensed currently in the first quarter
of 1996 related to the Company's Omaha-Old Market restaurant. This amount has
been included in the restaurant operating expenses for the 1996 six month
period.
<PAGE>
General and administrative costs decreased 22% during the second quarter of 1996
to $178,000 (or 6.7% of net sales) from $228,000 (or 9.0% of net sales) in the
comparable 1995 period. For the six months ended June 30, 1996, these costs
rose 66% to 796,000 (or 14.6% of net sales) from $479,000 (or 9.4% of net sales)
in the comparable 1995 period. The first six month period increase was primarily
due to the write-off of various abandoned assets including restaurant
architectural prototype costs, computer equipment, development costs incurred
for sites not to be developed, and receivables from the Company's former
President and Chief Executive Officer which have been determined to be
noncollectible at this time, including the $50,000 note receivable from officer.
Also included in general and administrative costs during the first six months of
1996 was approximately $73,000 in marketing development costs associated with
the introduction of the Sadie Austin's identity. The decrease in the second
quarter general and administrative costs from 1995 to 1996 was due to the
decrease in corporate management personnel and controlling other overhead costs.
Interest expense approximated $38,000 during the second quarter of 1996 compared
to net interest income of $31,000 in the comparable period. Year-to-date 1996
interest expense was $86,000 compared to net interest income of $47,000 in the
same six month period of 1995. The interest expense was due to the Company's
borrowing funds compared to 1995 when the Company was earning interest income
from investments.
As reported in the first quarter, the Company closed its Columbia, Missouri
restaurant on March 21, 1996 due to its operating performance not meeting the
Company's expectations. The estimated closing costs of $250,000 consist of the
non-realizable value of the equipment and leasehold improvements, expected loss
on lease, and the related costs to dispose of the unit. Rock Bottom, Inc. signed
an agreement with Austins on July 16, 1996 for $154,000 to purchase the
equipment in the store and assumed the Columbia store lease.
As a result of the factors described above, the Company had a net loss during
the 1996 second quarter of $92,000, and a net loss for the first six months of
1996 of $1.3 million. This compares to net loss of $6,000 in the second quarter
of 1995, and $12,000 for the first six month period of 1995. The increase in
net loss is primarily due to the decrease in restaurant operating income
resulting from decreased same-store sales, the increase in general and
administrative costs, interest expense, restaurant closing costs, and the
cumulative effect of the change in accounting.
Liquidity and Capital Resources
The Company currently has $700,000 borrowed under an agreement with First
National Bank of Omaha, at a variable interest rate which was 9.25% at June 30,
1996. Of this amount, $275,000 was used to purchase the leasehold and other
improvements from the former tenant of the real property on which the Company's
Scottsdale, Arizona restaurant is located, and a favorable sublease of the
property. The total purchase price was $325,000. Due to the signing of the
closing agreement for the Columbia store, the Company has decreased the
outstanding balance by $154,000 on July 16, 1996. The Company will also begin
paying down the principal $5,000 a week starting August 1, 1996. This bank
agreement expires on December 31, 1996 at which time it is expected that the
agreement will be renewed, or a new agreement will be negotiated.
<PAGE>
The Company also renegotiated the maturity date on the real estate mortgage note
from October 31, 1996 to December 31, 1996.
On January 30, 1996, the Company obtained a credit line from Norwest Bank
Nebraska, N.A. of which The Schorr Family Company, Inc., a corporation in which
Paul C. Schorr III, Chairman of the Company's Board of Directors, is President
and Chief Executive Officer guaranteed $300,000 of such indebtedness. As of
June 12, 1996, The Schorr Family Company, Inc. paid such indebtedness to Norwest
Bank Nebraska, N.A. and the Company acknowledged a direct indebtedness to The
Schorr Family Company, Inc. of $300,000. On March 18, 1996 the Company borrowed
$200,000 from Roger D. Sack, a Director of the Company, at an interest rate of
1% over Norwest Bank Nebraska, N.A. base rate. As of June 12, 1996, The Schorr
Family Company, Inc. and Roger D. Sack agreed to contribute the total $500,000
of indebtedness to the Company in exchange for a total of 421,052 shares of
Common Stock of the Company. The number of shares was determined by averaging
the average bid and asked prices of the Common Stock of the Company for the 10
trading days preceding June 12, 1996. The Schorr Family Company, Inc. owns
807,631 shares or 34.65% of the outstanding stock of the Company and Roger D.
Sack owns 720,421 shares or 30.91% of the outstanding stock of the Company.
This transaction was approved by the Board of Directors.
The Company's capital requirements relate principally to the development of new
restaurants, the operation of existing restaurants and the addition of patios on
existing stores. Capital expenditures for the first six months of 1996 were
$529,000 compared to $725,000 for the comparable period in 1995.
Currently, the Company is in the process of selling two liquor licenses in New
Mexico and the Rio Rancho real estate. These sales will increase working
capital and repay the related $553,000 debt we owe on these three items.
A major shareholder has expressed the ability and intent to fund working capital
and approved capital expenditure requirements through December 31, 1996 to the
extent that the Company is not able to fund such requirements with internal
funds, refinancing of existing debt, and additional financing obtained.
<PAGE>
Part II: Other Information
Item 3. - EXHIBITS
a) Exhibit 27 - Financial Data Schedule
<PAGE>
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 hereunto duly authorized.
Austins Steaks & Saloon, Inc.
Date: August 14, 1996 By:/s/ Tish Gade-Jones
------------------------------ --------------------------
Tish Gade-Jones
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 150,500
<CURRENT-ASSETS> 353,800
<PP&E> 5,090,447
<DEPRECIATION> 991,314
<TOTAL-ASSETS> 6,167,879
<CURRENT-LIABILITIES> 2,395,747
<BONDS> 0
0
0
<COMMON> 23,311
<OTHER-SE> 3,772,132
<TOTAL-LIABILITY-AND-EQUITY> 6,167,879
<SALES> 5,451,150
<TOTAL-REVENUES> 5,451,150
<CGS> 5,364,912
<TOTAL-COSTS> 5,364,912
<OTHER-EXPENSES> 1,045,738
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,623
<INCOME-PRETAX> (1,045,123)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,045,123)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (255,512)
<NET-INCOME> (1,300,635)
<EPS-PRIMARY> (.67)
<EPS-DILUTED> 0
</TABLE>
