UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______to ______
LARK TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 73-1461841
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
9545 KATY FREEWAY, SUITE 465
HOUSTON, TX 77024
(Address of principal executive offices)
(713) 464-7488
(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 [ ]
APPLICABLE ONLY TO ISSUER 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 a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of July 31, 1999, there were 3,319,546 shares of Common Stock, par value
$0.001 per share, outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
LARK TECHNOLOGIES, INC.
INDEX TO FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1999.
Part I Financial Information (unaudited)
PAGE
Item 1. Financial Statements
Balance Sheet........................................1
Statements of Income.................................2
Statements of Cash Flows.............................3
Notes to Financial Statements........................4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations .............7
Part II Other Information..........................................9
Item 1. Legal Proceedings..........................................9
Item 2. Changes in Securities......................................9
Item 3. Defaults Upon Senior Securities............................9
Item 4. Submission of Matters to a Vote of Security Holders .......9
Item 5. Other Information..........................................9
Item 6. Exhibits and Reports on Form 8-K...........................9
Signatures............................................................10
i
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LARK TECHNOLOGIES, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30, 1999
---------------
(UNAUDITED)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 134,917
Accounts receivable (net) ................................... 682,256
Due from related parties .................................... 854
Inventory ................................................... 201,953
Prepaid expenses ............................................ 67,525
---------------
Total current assets .................................................... 1,087,505
Property and equipment, net ............................................. 1,001,551
Other assets, net ....................................................... 16,749
===============
Total assets ............................................................ $ 2,105,805
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................ $ 672,975
Notes payable ............................................... 315,265
Capital lease obligations-current portion ................... 241,124
Accrued expenses ............................................ 102,905
Customer deposits ........................................... 148,780
Deposits from related parties ............................... 86,889
---------------
Total current liabilities ............................................... 1,567,938
Capital lease obligations-long term portion ............................. 33,648
---------------
Total Liabilities: ...................................................... 1,601,586
Stockholders' equity
Preferred stock, $0.001 par value:
Authorized shares - 2,000,000
None issued and outstanding
Common stock, $0.001 par value:
Authorized shares - 8,000,000
Issued shares:3,324,046 and outstanding shares:3,319,546 3,324
Additional paid-in capital .................................. 2,450,754
Treasury Stock at cost ...................................... (4,946)
Amounts due from shareholders ............................... (15,045)
Accumulated deficit ......................................... (1,929,869)
---------------
Total stockholders' equity .............................................. 504,219
---------------
Total liabilities and stockholders' equity .............................. $ 2,105,805
===============
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LARK TECHNOLOGIES, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------ ------------ ------------ ------------
1998 1999 1998 1999
------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Laboratory Services ............. $ 998,244 $ 1,001,089 $ 2,376,591 $ 2,243,939
Costs and expenses:
Costs of services ............... 471,163 496,727 1,012,834 1,282,162
Sales, general and administrative 495,173 541,252 1,089,409 1,172,159
Research and development ........ 20,374 (8,811) 50,742 (395)
------------ ------------ ------------ ------------
Total costs and expenses ............ 986,710 1,029,168 2,152,985 2,453,926
------------ ------------ ------------ ------------
Operating income (loss) ............. 11,534 (28,079) 223,606 (209,987)
Other income and (expense):
Interest expense ................ (7,457) (16,932) (15,180) (34,189)
Interest income ................. 5,830 2,843 11,679 5,589
------------ ------------ ------------ ------------
Total other income (expense) ........ (1,627) (14,089) (3,501) (28,600)
------------ ------------ ------------ ------------
Income (Loss) before income taxes ... 9,907 (42,168) 220,105 (238,587)
Provision for income taxes .......... 470 0 9,470 0
------------ ------------ ------------ ------------
Net income (loss) ................... $ 9,437 ($ 42,168) $ 210,635 ($ 238,587)
============ ============ ============ ============
Basic and diluted earnings (loss)
per common share ................ $ 0.00 ($ 0.01) $ 0.06 ($ 0.07)
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LARK TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
----------------------------
1998 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ........................................ $ 210,635 ($ 238,587)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities
Depreciation and amortization ............. 113,443 151,826
Changes inoperating assets and liabilities:
Accounts receivable ..................... 57,418 (83,461)
Inventory ............................... (27,353) (62,174)
Prepaid expenses ........................ 18,432 12,599
Due from related parties ................ 55,369 13,326
Accounts payable ........................ 39,035 41,529
Accrued expenses ........................ (55,526) (27,887)
Deposits ................................ (185,428) (42,237)
------------ ------------
Net cash provided by (used in) operating activities ...... 226,025 (235,066)
INVESTING ACTIVITIES
Purchases of property and equipment ....... (115,598) (75,889)
------------ ------------
Net cash used in investing activities .................... (115,598) (75,889)
FINANCING ACTIVITIES
Proceeds from issuance of notes payable ... -- 150,000
Principal payments on notes payable ....... (15,009) (62,877)
Principal payments on capital lease ....... (27,667) (106,757)
------------ ------------
Net cash provided by (used in) financing activities ...... (42,676) (19,634)
------------ ------------
Net increase (decrease) in cash and cash equivalents ..... 67,751 (330,589)
Cash and cash equivalents at beginning of period ......... 626,003 465,506
------------ ------------
Cash and cash equivalents at end of period ............... $ 693,754 $ 134,917
============ ============
NONCASH FINANCING ACTIVITIES:
Capital lease to acquire equipment ........ $ 143,689
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
3
<PAGE>
LARK TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Lark Technologies, Inc., a Delaware corporation (the "Company"), was
formed on November 16, 1994, as a wholly-owned subsidiary of SuperCorp Inc.
("SuperCorp"), for the purpose of merging with Lark Sequencing Technologies,
Inc., a Delaware corporation ("Sequencing"), as outlined in a merger agreement
("Merger Agreement") entered into by SuperCorp and Sequencing on October 28,
1994. SuperCorp approved the Merger Agreement on September 5, 1995 and by the
stockholders of Sequencing on September 12, 1995. As a consequence of the
merger, all of the shares of common and preferred stock of Sequencing were
exchanged for 1,800,000 shares of Common Stock of the Company with a par value
of $0.001 per share and the 200,000 shares of Common Stock of the Company held
by SuperCorp were distributed to the shareholders of SuperCorp. The Company has
succeeded to all of the business previously undertaken by Sequencing. Lark
provides specialized laboratory services for DNA sequencing to biotechnology
researchers.
2. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information in footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to these rules and regulations. The
accompanying unaudited interim financial statements reflect all adjustments
which the Company considers necessary for a fair presentation of the results of
operations for the interim periods covered and for the financial condition of
the Company at the date of the interim balance sheet. All such adjustments are
of a recurring nature. Results for the interim periods are not necessarily
indicative of results for the year.
For financial reporting purposes, the merger of the Company and Sequencing
has been accounted for as a recapitalization of Sequencing, and the historical
financial statements of Sequencing prior to the merger became the financial
statements of the Company.
3. INVENTORY
Historically this caption has reflected the Company's work in process
inventory only. Now, it also includes a component of finished goods, QPCR Assay
kits held for resale, which are valued at $149,656.
4. NOTES PAYABLE
On June 30, 1999, the Company renewed its revolving line of credit and
extended the maturity to December 31, 1999. Under the terms of its revolving
line, the company may borrow up to $450,000 at the bank's prime rate (8.00% at
June 30, 1999) plus 2%. The borrowing base of this line of credit is equal to
80% of certain accounts receivable that are no more than 90 days old. On June
30, 1999 the Company had a borrowing base of $423,675 against which $286,787 was
outstanding. Under the terms of the revolving line of credit agreement, the
Company is required to maintain certain financial ratios and a specific level of
net worth. As of June 30, 1999, the Company was in compliance with all required
financial ratios and specific net worth requirements.
On March 13, 1998, the Company arranged an advised discretionary credit
line for the financing of equipment with the same bank used for the line of
credit described above. Under the terms of this discretionary credit, the
Company was able to borrow up to $600,000 secured by the equipment purchased
with the proceeds of the borrowings. This discretionary credit line provided for
the borrowings of up to 75% of the purchase price of
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<PAGE>
equipment at the bank's prime plus 1.5%. This credit line provided for repayment
terms up to 36 months and matured on May 31, 1999. On January 5, 1999, the
Company borrowed $22,000 against this line of credit for the purchase of lab
equipment. Although this credit facility was not renewed, the $22,000 loan
(above) continued with its original terms continued.
6. EARNINGS PER SHARE
The following table sets forth the weighted average shares outstanding for
the computation of basic and diluted earnings per share:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDING FOR THE SIX MONTHS ENDING
JUNE 30, JUNE 30,
---------------------------- ----------------------------
1998 1999 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding: . 3,324,046 3,319,546 3,324,046 3,319,546
Dilutive securities - employee stock options: 27,143 1,138 23,816 3,616
------------ ------------ ------------ ------------
Weighted average common shares outstanding
assuming full dilution: .................... 3,351,189 3,320,684 3,347,862 3,323,162
============ ============ ============ ============
</TABLE>
Options to purchase 163,000 and 250,240 shares of common stock were
outstanding during 1998 and 1999 respectively, but were not included in the
computation of diluted earnings per share because the effect would be
antidilutive.
7. DISTRIBUTION AGREEMENT
Effective January 1, 1996, the Company announced a new service,
Differential Display ("DD"). The Company entered into a distribution agreement
with a third party, which provided the Company with a significant amount of
specialized training and scientific know-how relating to the DD services. The
Company agreed to purchase supplies and equipment related to this service
exclusively from the third party. The DD services were to be sold on an
exclusive basis by the third party and its distributor, but Lark was allowed to
sell the DD services through its own sales force worldwide. The third party was
obligated to pay the Company an agreed upon transfer price for DD services that
the third party or its distributor sells. The Company was to pay the third party
an agreed upon royalty for DD services that the Company sells. This agreement
expired December 31, 1998 and the Company continues to offer DD services for its
own account.
8. COMMITMENTS AND CONTINGENCIES
STOCK OPTIONS
During May and June of 1999, the Company issued options to certain
employees in conjunction with a salary reduction plan instituted May 1, 1999,
with an exercise price of $0.75 per share.
PATENT LICENSE AGREEMENT
Effective June 15, 1995, the Company entered into an exclusive patent
sub-license agreement regarding senescence technology with another biotech
company. The agreement grants to the Company an exclusive license to certain
"Licensed Patent Rights" of this third party and requires the Company to perform
research and development efforts as defined in the agreement. The Company is
required to pay the third party a royalty of 25% to 50% of all consideration the
Company receives as a result of sales of licensed products and licensed
processes or a sub-license or assignment of the Company's rights under the
agreement. If the Company does not meet the research and development milestones
as defined in the agreement, or is unable to successfully commercialize the
results of the research and development efforts, the agreement will terminate.
Otherwise, the agreement will terminate upon the dissolution of the Company or
the expiration of the "Licensed Patent Rights". The Company may also terminate
the agreement with 60 days written notice to the third party.
On October 6, 1998, the Company announced the restructuring of its
senescence technology development program. Sennes Drug Innovations, Inc., the
Company's licensor for the senescence technology, which originated
5
<PAGE>
with a third party, recently appointed a new president. This appointment was
allowed by the settlement of various technology transfer issues between the
third party and Sennes. This new president will represent the Sennes
technologies, including the senescence gene technology licensed to the Company,
to third parties. The Company's license for senescence technologies remains
intact.
The senescence technology includes genes involved in regulating the four
senescence gene pathways. Senescence is the normal physiological process that
controls cellular immortality. Immortal cells are closely related to cancer and
can add insights into aging and abnormal development.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Financial Statements and the accompanying Notes herein, and is qualified
entirely by the foregoing and by other more detailed financial information
appearing elsewhere.
GENERAL
Lark Technologies, Inc. ("Lark" or "the Company") is a successor in
interest, through a merger effected in September 1995, to Lark Sequencing
Technologies, Inc., which was incorporated under the business corporation laws
of the State of Delaware on May 4, 1990.
Lark is a leading molecular biology Contract Research Organization (CRO)
providing services to the pharmaceutical and biotechnology industries worldwide.
Lark's service portfolio consists of various DNA sequencing and molecular
biology services as follows:
o AUTOMATED DNA SEQUENCING SERVICES. Lark applies automated sequencing
techniques to generate high throughput DNA sequence and fast turnaround
screening information, including genome-sequencing, shotgun sequencing and
shotgun library construction services.
o GENETIC STABILITY TESTING SERVICES. Lark's genetic stability testing
services are used to characterize Master Cell Banks, Manufacturers'
Working Cell Banks and Post Production Cell Samples from bacterial, yeast
and cell cultures. Genetic stability testing is used to analyze a
production strain's stability and demonstrate that the expression system
has not undergone any mutations or rearrangements that would affect the
integrity of the product. This service assists companies producing
genetically manufactured products to optimize production yields, determine
product purity, and support regulatory submissions. This service was
introduced in late 1996.
o QUANTITATIVE PCR SERVICES. Lark uses Quantitative PCR techniques to
measure the distribution and expression of target DNA or RNA in a
customer's sample from cultured cells, microorganisms, or tissues such as
brain, lung, liver, and kidneys.
o ARRAY SERVICES. Lark uses automated PCR techniques to produce molecular
materials used in the construction of biochip arrays.
o MOLECULAR BIOLOGY SERVICES. Lark offers a variety of molecular biology
services including library screening, library prescreening, southern blot
analysis, subcloning, plasmid preparation and PCR amplification. Lark
consults with its customers to customize a broad range of molecular
biology projects.
o DIFFERENTIAL DISPLAY SERVICE. Lark uses differential display techniques
for analyzing differences in gene expression caused by the introduction of
various drug compounds, viruses or stimulatory factors. Differential
display can be useful in identifying novel genes and gene functions. By
understanding how and when a gene is expressed or repressed, targeted
interventions can be developed to maximize results and minimize harmful
side effects. This service is used to discover novel genes as well as to
characterize pharmaceutical effects.
In 1995 Lark undertook a senescence gene discovery program for its own
account. Although several genes were discovered in this program, lack of gene
functionality coupled with license issues caused Lark to reduce its funding for
this program. Lark continues to work towards license issue resolution and
eventual potential sublicense agreements.
7
<PAGE>
RESULTS OF OPERATIONS
GROSS REVENUES. Gross revenues increased .3% from $998,244 to $1,001,089
for the three-month periods ended June 30, 1998 and 1999, respectively. Gross
revenue decreased 5.6% from $2,376,591 to $2,243,939 for the six-month periods
ended June 30, 1998 and 1999 respectively. The increase in revenues for the
quarter was mainly due to the additional sales by the UK lab. The decrease in
revenues for the year to date was mainly attributable to the absence of ongoing
project work for a single large customer that was present in 1998 but not in
1999. That customer accounted for 40% of the revenues for the first half of
1998.
COSTS OF SERVICES. Costs of services consist primarily of labor and
laboratory supplies. Costs of services increased 5.4% from $471,163 to $496,727
for the three-month periods ended June 30, 1998 and 1999, respectively. Costs of
services increased 26.6% from $1,012,834 to $1,282,162 for the six-month periods
ended June 30, 1998 and 1999 respectively. Changes in the mix of projects
performed for customers at Lark's Houston facility combined with the costs of
our new, fully staffed lab in the UK accounted for the increase. Costs of
services as a percentage of revenue were 47.2% and 49.6% for the three-month and
42.6% and 57.1% for the six-month periods ended June 30, 1998 and 1999,
respectively.
SALES, GENERAL AND ADMINISTRATIVE EXPENSES. Sales, general and
administrative expenses consist primarily of salaries and related costs,
depreciation, amortization, legal and professional costs, rent, travel, and
advertising. Sales, general and administrative expenses increased 9.3% from
$495,173 to $541,252 for the three-month periods ended June 30, 1998 and 1999,
respectively. Sales, general and administrative expenses increased 7.6% from
$1,089,409 to $1,172,159 for the six-month period ended June 30, 1998 and 1999,
respectively. These increases were mainly due to the addition of employee sales
representatives located on both US coasts to gain more consistent sales coverage
in those important markets. Sales, general and administrative expenses as a
percentage of revenue were 49.6% and 54% for the three-month and 45.8% and 52.2%
for the six-month periods ended June 30, 1998 and 1999, respectively.
RESEARCH AND DEVELOPMENT. Research and development costs decreased 143%
from $20,374 to ($8,811) for the three-month periods ended June 30, 1998 and
1999, respectively. Research and development costs decreased 100.7% from $50,742
to ($395) for the six months ended June 30, 1998 and 1999, respectively. The
decrease in research and development costs was attributable to the cancellation
of the sponsored research agreement project. The credit in the second quarter
1999 resulted when prior period costs originally charged to R&D were correctly
reclassified to Sales expenses. The costs were for the rework of the Company's
web site. Research and development costs as a percentage of revenue were 2% and
- -.9% for the three-month and 2.1% and -.02% for the six-month periods ended June
30, 1998 and 1999, respectively.
VARIABILITY OF FUTURE OPERATING RESULTS. For the first half of 1999, the
Company continued the trend it started in 1998 toward a broader base of
services. The Company experienced a slight revenue increase and increased costs
during the quarter ended June 30, 1999 due in large part to its concentration of
selling and marketing efforts on the new services now offered and the
establishment of the new lab now operating in the UK. The Company added these
new services and the new lab in order to broaden the Company's revenue base and
to participate more actively in the European markets. As the Company completes
the transition to it's new format, somewhat lower revenues and net losses will
be experienced until the new programs being implemented become fully effective.
Once these changes are fully in place, the Company's revenue and net income have
the potential for much higher levels than have been historically achieved. The
company continues to seek large contracts and diversify its customer base.
LIQUIDITY AND CAPITAL RESOURCES. Operating cash flow was $226,025 and
($235,066) for the six-month periods ended June 30, 1998 and 1999, respectively.
The negative operating cash flows for the quarter ending June 30, 1999 occurred
primarily as a result to the net loss reported for the period. This negative
operating cash flow was partially offset by the $150,000 borrowed by the Company
under the terms of the revolving line of credit.
During the first quarter of 1999, the Company borrowed $22,000 from its
current bank under the terms of its advised discretionary credit line. On June
30, 1999, the Company renewed its revolving loan facility through December 31,
1999, and may now borrow up to $450,000 under the terms of the new credit line.
See note 3
8
<PAGE>
to financial statements for further details of the companies borrowing
facilities.
MATERIAL COMMITMENTS. The Company currently has no outstanding material
commitments.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ending
June 30, 1999.
INDEX OF EXHIBITS
2.1(1) The Agreement of Merger of November 18, 1994, between Lark
Technologies, Inc. and Lark Sequencing Technologies, Inc. providing
for the merger of Lark Sequencing Technologies, Inc. into the
Company.
3.1(1) Bylaws of Lark Technologies, Inc., as amended.
3.2(1) The Certificate of Incorporation of Lark Technologies, Inc., as
amended.
10.1(1) 1990 Stock Option Plan adopted by the Company.
10.13(2) Agreement entered into by and between the Company and Genomyx
Corporation.
10.14(2) The portion of the Minutes of the Executive Session of the Meeting
of the Board of Directors of the Company held December 8, 1995,
establishing and defining the bonus plan for 1996 under which the
chief executive officer, chief financial officer, and other
employees may receive cash bonuses as part of their compensation.
(1) INCORPORATED by reference from the Company's Registration Statement on Form
S-4 dated August 14, 1995, Commission File No. 33-90424. The exhibit numbering
system used in Form S-4 differed from that used in this Form 10-QSB (8a, 2d, 2c,
6b, 6c, 6d-1, and 6f, respectively).
(2) Incorporated by reference from the Company's Form 10-QSB for the quarterly
period ended March 31, 1996.
9
<PAGE>
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.
Lark Technologies, Inc.
(Registrant)
DATE AUGUST 16, 1999 /S/ VINCENT P. KAZMER
Vincent P. Kazmer
President and Chief Executive Officer
DATE AUGUST 16, 1999 /S/ DOUGLAS B. WHEELER
Douglas B. Wheeler
Vice President, Finance
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 134,917
<SECURITIES> 0
<RECEIVABLES> 718,735
<ALLOWANCES> (36,478)
<INVENTORY> 201,953
<CURRENT-ASSETS> 1,087,505
<PP&E> 2,256,073
<DEPRECIATION> (1,254,521)
<TOTAL-ASSETS> 2,105,805
<CURRENT-LIABILITIES> 1,567,938
<BONDS> 0
0
0
<COMMON> 3,324
<OTHER-SE> 500,895
<TOTAL-LIABILITY-AND-EQUITY> 2,105,805
<SALES> 1,001,089
<TOTAL-REVENUES> 1,001,089
<CGS> 496,727
<TOTAL-COSTS> 1,029,168
<OTHER-EXPENSES> (14,089)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,932
<INCOME-PRETAX> (42,168)
<INCOME-TAX> 0
<INCOME-CONTINUING> (42,168)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (42,168)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
