10QSB

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-QSB

(Mark One)

[X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2000

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _________ to ____________

Commission File Number: 000-23-661

ROCKWELL MEDICAL TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)

Michigan	38-3317208
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

28025 Oakland Oaks Drive
Wixom, Michigan 48393

(Address of Principal executive offices)

(248) 449-3353

Issuer’s telephone number

(None)

(Former name, former address and former fiscal year, if changed since last report)

      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 [ ]

      State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: 4,855,105 Common Shares outstanding and 3,625,000 Common Share Purchase Warrants outstanding as of August 8, 2000.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Rockwell Medical Technologies, Inc. and Subsidiary

Consolidated Balance Sheet

As of June 30, 2000

(Whole dollars)
(Unaudited)

				June 30, 2000
			Assets
Cash and Cash Equivalents				$	479,918
Accounts Receivable, net of allowance for doubtful accounts of $53,000					874,356
Inventory					602,802
Other Current Assets					95,438
		Total Current Assets			2,052,514
Property and Equipment, net					644,992
Other Non-current Assets					95,328
Excess of Purchase Price over Fair Value of Net Assets Acquired, net					1,040,082
			Total Assets	$	3,832,916
			Liabilities and Shareholders' Equity
Accounts Payable				$	527,476
Accrued Liabilities					264,911
			Total Current Liabilities		792,387
Shareholders' Equity:
Common Shares, no par value, 4,855,105 shares issued and outstanding					8,787,591
Common Share Purchase Warrants, 3,625,000 warrants issued and outstanding					251,150
Accumulated Deficit					(5,998,212	)
					3,040,529
	Total Liabilities and Shareholders’ Equity			$	3,832,916

The accompanying notes are an integral part of the consolidated financial statements.

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Rockwell Medical Technologies, Inc. and Subsidiary

Consolidated Income Statements

For the three months and six months ended June 30, 2000 and June 30, 1999

(Whole dollars)
(Unaudited)

		Three Months			Three Months			Six Months			Six Months
		Ended			Ended			Ended			Ended
		June 30, 2000			June 30, 1999			June 30, 2000			June 30, 2000
Sales		$	1,690,450		$	1,537,046		$	3,324,648		$	3,121,256
Cost of Sales			1,495,329			1,387,837			2,932,120			2,824,041
	Gross Profit		195,121			149,209			392,528			297,215
Selling, General and Administrative			557,458			526,072			1,005,863			1,056,963
Operating Loss			(362,337	)		(376,863	)		(613,335	)		(759,748	)
Interest Income, net			10,672			10,622			23,620			35,369
	Net Loss	$	(351,665	)	$	(366,241	)	$	(589,715	)	$	( 724,379	)
Average shares outstanding			4,854,928			4,838,111			4,854,663			4,834,281
Basic and Diluted Loss per Share		$	(.07	)	$	(.08	)	$	(.12	)	$	( .15	)

The accompanying notes are an integral part of the consolidated financial statements.

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Rockwell Medical Technologies, Inc. and Subsidiary

Consolidated Statements of Cash Flows

For the six months ended June 30, 2000 and June 30, 1999

(Whole dollars)
(Unaudited)

					2000			1999
Cash Flows from Operating Activities:
	Net loss				$	(589,715	)	$	(724,379	)
	Adjustments to reconcile net loss to net cash used for operating activities:
		Depreciation and Amortization				195,441			202,303
		Compensation recognized for stock options				24,650			50,570
		Changes in Working Capital:
			Decrease (Increase) in Accounts Receivable			106,333			(125,374	)
			Decrease (Increase) in Inventory			(189,562	)		(125,870	)
			Decrease (Increase) in Other Assets			(21,752	)		17,721
			Increase (Decrease) in Accounts Payable			186			(121,240	)
			Increase (Decrease) in Other Liabilities			(76,111	)		13,059
				Net Change in Working Capital		(180,906	)		(341,704	)
				Net Cash Used in Operations		(550,530	)		(813,210	)
Cash Flows from Investing Activities:
	Purchase of Equipment					(62,845	)		(27,995	)
				Cash Used in Investing Activities		(62,845	)		(27,995	)
Cash Flows from Financing Activities:
				Cash Provided by Financing Activities		—			—
Increase (Decrease) in Cash						(613,375	)		(809,178	)
Cash at Beginning of Period						1,093,293			1,933,197
Cash at End of Period					$	479,918		$	1,124,019

The accompanying notes are an integral part of the consolidated financial statements.

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Rockwell Medical Technologies, Inc. and Subsidiary

Notes to Consolidated Financial Statements

1. Description of Business

      Rockwell Medical Technologies, Inc. (the “Company”) manufactures, sells and distributes hemodialysis concentrates and other ancillary medical products and supplies used in the treatment of patients with End Stage Renal Disease “ESRD”. The Company supplies medical service providers who treat patients with kidney disease. The Company’s products are used to cleanse patients’ blood and replace nutrients lost during the kidney dialysis process. The Company primarily sells its products in the United States.

      The Company is regulated by the Federal Food and Drug Administration under the Federal Drug and Cosmetics Act, as well as by other federal, state and local agencies. Rockwell Medical Technologies, Inc. has received 510(k) approval from the FDA to market hemodialysis solutions and powders. The Company also has 510(k) approval to sell its Dri-Sate Dry Acid Concentrate product line and its Dri-Sate Mixer that were introduced during 1999.

2. Summary of Significant Accounting Policies

Basis of Presentation

      The consolidated financial statements of the Company include the accounts of Rockwell Medical Technologies, Inc. and its wholly owned subsidiary, Rockwell Transportation, Inc. All intercompany balances and transactions have been eliminated.

      In the opinion of management, all necessary adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The operating results for the three-month and six-month periods ended June 30, 2000 are not necessarily indicative of the results to be expected for the year ending December 31, 2000.

      A description of the Company’s significant accounting policies can be found in the footnotes to the Company’s annual consolidated financial statements for the year ended December 31, 1999 included in its Annual Report on Form 10-KSB dated March 30, 2000.

3. Cash and Cash Equivalents

      The Company had cash and certificates of deposits of $ 480,000 at June 30, 2000. Of that total, $ 150,000 was in a restricted certificate of deposit that serves as collateral for a letter of credit related to the lease of a Company facility. Excluding this certificate of deposit, the Company had available cash balances of $ 330,000 as of June 30, 2000.

4. Related Party Transactions

      During the six month period ended June 30, 1999, the Company paid fees to the consulting firm of Wall Street Partners, Inc. for financial and management services. Amounts paid for the first six months of 1999 were $ 120,000. The sole principal of the consulting firm was Mr. Gary L. Lewis who served as Chairman of the Board of Directors of the Company until March 14, 2000. Effective January 1, 2000, the consulting agreement with Wall Street Partners, Inc. was not renewed by the Company and therefore, the Company has no obligation to make further payments to the consulting firm.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Three Month and Six Month Periods Ending June 30, 2000 and June 30, 1999

      Sales for the second quarter of 2000 increased by 10% over the second quarter of 1999 to $ 1,690,000. The Company’s sales increased due to higher sales volume, an improved customer profile and an improved product mix. Sales of the Company’s Dri-Sate™Dry Acid Concentrate product line increased by more than 77 % compared to the second quarter of 1999. The Company’s initiative to increase its ancillary product sales resulted in over a 50 % increase in ancillary sales from the year earlier quarter. Ancillary product sales represented 12.0 % of net sales compared to 8.7 % in the second quarter of 1999.

      In the second quarter of 2000, the Company realized a $ 46,000 or 30% increase in gross profit and its gross profit margins increased to 11.5 % from 9.7% in the second quarter of 1999. Margins improved due to a more favorable product mix and customer profile. However, the Company experienced higher distribution costs in the second quarter as compared to the second quarter of 1999 that reduced gross margins by approximately two percent. Distribution costs were higher than the second quarter of 2000 as a result of truck fleet additions in advance of new business additions coupled with higher operating expenses. Gross profit margins may be adversely impacted during the remainder of 2000 as a result of start-up costs related to the Company’s second manufacturing facility.

      Selling, General and Administrative expenses were up 6% or $ 31,000 compared to the second quarter of 1999. The Company increased its expenditures for sales and marketing and incurred higher personnel costs. The Company increased its trade advertising and direct marketing expenditures during the second quarter of 2000. The Company did not renew its consulting agreement with Wall Street Partners, Inc. in 2000 resulting in $ 60,000 less in expenses in the second quarter compared to the second quarter of 1999. The Company also increased its investor relations activities and expenditures.

      Interest Income remained the same as the year earlier period.

      Net earnings were a loss of ($.07) per share compared to ($.08) in the second quarter of 1999. Overall, the Company’s second quarter 2000 net loss was $ 351,000 compared to $ 366,000 in the second quarter of 1999.

Results of Operations for the six months ended June 30, 2000 and June 30, 1999

      Sales revenue in the first six months of 2000 was $ 3,325,000 compared to $ 3,121,000 in the first six months of 1999 or an increase of $ 203,000 or 6.5%. This increase in sales was primarily due to an increase in sales of Dri-Sate™Dry Acid Concentrate with unit volume up 125% over the first six months of 1999. Ancillary product sales represented 11.6 % of sales in the first six months of 2000 compared to 10.2% in the first six months of 1999. The increased sales of Dri-Sate™Dry Acid Concentrate and ancillary sales were partially offset by a decrease in sales volumes of liquid acid concentrate products due to reduced sales of lower margin distributor products and due to the migration of certain customers to Dri-Sate™Dry Acid Concentrate.

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      Gross Profit margins improved to 12.6 % of sales from 9.8% of sales in the first half of 1999. The margin improvement was largely due to a combination of higher sales volumes, improved product mix and a more favorable customer profile. The Company incurred increased distribution costs. Gross profit increased 32% or $ 95,000 in the first half of 2000 compared to the first half of 1999.

      Selling, general and administrative expense of $ 1,006,000 decreased by 5.1% or $ 52,000 in the first six months of 2000 from the first six months of 1999. Consulting expenses were reduced by $ 120,000 as a result of electing not to renew the consulting agreement with Wall Street Partners in 2000. The Company increased its sales and marketing efforts on its Dri-Sate™Dry Acid Concentrate product line which included increased trade show participation, trade publication advertising and direct marketing efforts. The Company increased its expenditures for investor relations activities in the first half of 2000 compared to the first half of 1999.

      Interest income decreased by $ 12,000 in the first six months of 2000 compared to the first six months of 1999 due to reduced funds available for investment.

      The Company’s operating loss decreased by $ 135,000 or 19% in the first six months of 2000 compared to the first six months of 1999. Overall, the Company’s loss in the first six months of 2000 was $ 590,000 compared to a loss of $ 724,000 in the first six months of 1999. Basic and fully diluted loss per share improved by $ .03 per share and was ($.12) in the first six months of 2000 as compared to a loss per share of ($.15) in the first six months of 1999.

Liquidity and Capital Resources

      The Company has utilized cash since its inception and anticipates that it will continue to utilize cash to fund its development and operating requirements. The Company anticipates that it will continue to improve its operating performance during 2000. However, in order to expand its operations and to execute its growth strategy, the Company will require additional funds. The Company is seeking to raise additional capital to finance its operations and expansion.

      During the first six months of 2000, the Company utilized $ 613,000 in cash to fund its operations, to fund increases in working capital and for capital expenditures. Cash requirements to fund operations in the first six months of 2000 aggregated $ 370,000 while working capital increased by $ 181,000. The Company increased its inventory by $ 190,000 in the first half of 2000 which included increases in the Company’s inventory of ancillary products and its Dri-Sate™Dry Acid Concentrate product line in order to support anticipated sales growth in those product lines. The Company had capital expenditures of $ 63,000 in the first half of 2000.

      The Company had cash and certificates of deposits of $ 480,000 at June 30, 2000. Of that total, $ 150,000 was in a restricted certificate of deposit that serves as collateral for a letter of credit related to the lease of a Company facility. Excluding this certificate of deposit, the Company had available cash balances of $ 330,000 as of June 30, 2000.

      During the first quarter of 2000, the Company entered into a lease agreement to add a second manufacturing facility to expand its production and distribution capabilities. The Company has received financing commitments for the majority of the capital expenditures related to this facility. In addition, the Company will require additional financing for working capital to operate this facility.

      The Company is seeking to finance its expansion and operations through debt and equity financing arrangements. The Company anticipates that it will require up to $ 2 million to fund its business development and growth initiatives in 2000. The Company has entered into discussions for the purpose of raising additional debt and equity capital with prospective lenders and investors. There is no assurance that the Company will be successful in raising additional equity capital. If the Company is unsuccessful in raising sufficient additional funds to satisfy its financing requirements, it may be required to alter its growth strategy, curtail its expansion plans or take other measures to conserve its cash resources.

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PART II — OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

      At the Company’s annual meeting of its shareholders held May 17, 2000, the shareholders re-elected Mr. Robert L. Chioini to the board of directors for a three year term expiring in 2003. Votes cast in favor were 3,201,971 while votes cast against were 12,900. Total votes abstained were 1,639,526. Mr. Kenneth L. Holt continues to serve as a Class II director with a term expiring in 2002 and Mr. Ronald D. Boyd continues to serve as a Class I director with a term expiring in 2001.

No other matters were submitted to a vote of the shareholders at the annual meeting.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits Exhibit No	Description
10.13	Employment agreement dated as of March 20, 2000 between the Company and Mr. Robert L. Chioini.
27.1	Financial Data Schedule
27.2	Financial Data Schedule

    (b) Reports on Form 8-K
        (None)

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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.

	ROCKWELL MEDICAL TECHNOLOGIES, INC.
	(Registrant)
Date: August 11, 2000	/s/ Robert L. Chioini Robert L. Chioini President, Chief Executive Officer and Director (Principal Executive Officer)
Date: August 11, 2000	/s/ THOMAS E. KLEMA Thomas E. Klema Vice President of Finance, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

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Exhibit Index

Exhibit No (a) Exhibits	Description
10.13	Employment agreement dated as of March 20, 2000 between the Company and Mr. Robert L. Chioini.
27.1	Financial Data Schedule
27.2	Financial Data Schedule

EX-10.13 2 ex10-13.txt EMPLOYMENT AGREEMENT 1 EMPLOYMENT AGREEMENT This Employment Agreement (this "Agreement") is entered into as of March 20, 2000 between Rockwell Medical Technologies, Inc., a Michigan corporation (the "Company"), and Robert L. Chioini ("Employee"). In consideration of the mutual covenants contained in this Agreement, the Company and Employee agree as follows: 1. Employment During the term of this Agreement (as defined in Sections 2 and 4), the Company shall employ Employee, and Employee hereby accepts such employment by the Company, on a full time basis, in accordance with the terms and conditions set forth in this Agreement. (a) Duties. Employee shall serve in such capacities and shall perform such duties, services and responsibilities and have such authority and powers for, and on behalf of, the Company as are established from time to time by, or in accordance with procedures established by, the Board of Directors of the Company. (b) Performance. Employee shall perform the duties called for under this Agreement to the best of his ability and shall devote all of his business time, energies, efforts and skill to such duties during the term of his employment and shall not seek or accept employment with any other employer or business or engage in any other business of any nature whatsoever, in any capacity whatsoever, unless approved in writing in advance by the Board of Directors of the Company. 2. Term Subject to Section 17 below, the term of Employee's employment under this Agreement shall begin on the date first written above and shall continue for three years unless earlier terminated pursuant to Section 4. 3. Compensation, Expenses and Benefits As full compensation for Employee's performance of his duties pursuant to this Agreement, the Company shall pay Employee during the term of this Agreement, and Employee shall accept as full payment for such performance, the following amounts and benefits: (a) Salary. As salary for Employee's services to be rendered under this Agreement, the Company shall pay Employee an annual salary of $275,000 the first year, $300,000 the second year and $325,000 the third year, which may be adjusted upwards from time to time by the Board of Directors of the Company. (b) Bonus. In addition to his salary, Employee shall be entitled to a minimum 2 bonus of $20,000 each quarter, or a greater amount, if determined by the Board of Directors of the Company. (c) Business Expenses. The Company shall pay or reimburse Employee for all reasonable, ordinary and necessary travel, entertainment, meals, lodging and other out-of-pocket expenses incurred by Employee in connection with the Company's business, for which Employee submits appropriate receipts. (d) Benefits. Employee shall be eligible to participate in all fringe benefits, if any, including insurance and other employee benefit plans, applicable to other similar executive officers of the Company, when and if adopted and made available during the term of this Agreement to employees with similar periods of service, subject to any eligibility or other requirements for participating in such fringe benefits and to the actual existence of the respective plans. (e) Automobile. The Company shall pay the Employee's automobile related expenses. 4. Termination (a) Death. Employee's employment under this Agreement shall terminate immediately upon Employee's death. (b) Disability. Employee's employment under this Agreement shall terminate, at the Company's option, immediately upon notice to Employee given after Employee's "total disability," but no earlier than the later of (i) the day after six (6) consecutive months during which Employee suffers from a "total disability," and (ii) the day that Employee is eligible to begin receiving disability benefits under any disability insurance policy or its equivalent provided to employees, including the Employee, under Section 3(d) above. "Total disability" shall mean Employee's physical or mental condition which renders Employee unable to perform the duties contemplated by Section 1 above. If the Company and Employee are unable to agree whether Employee is suffering from a "total disability," the question shall be decided by a physician mutually agreed upon and paid for by the Company, whose determination shall be final and binding. If Employee and the Company are unable to agree on a physician, Employee and the Company shall each choose one physician who shall mutually choose a third physician, whose determination shall be final and binding. Employee shall continue to receive compensation pursuant to Section 3 during the period prior to termination of Employee's employment pursuant to this Section 4(b), less any disability benefits Employee receives pursuant to the insurance policy or its equivalent provided by Section 3(d) with respect to such period, if any. (c) With Cause. The Company shall have the right, upon written notice to Employee, to terminate Employee's employment under this Agreement for "cause." Such termination shall be effective immediately upon Employee's receipt of such written notice. "Cause" means material breach by Employee of this Agreement, any material breach by Employee of his fiduciary duties to the Company, gross neglect, gross abuse of office amounting to a breach of trust, fraud, any willful violation of any law, rule or regulation (other than traffic violations and similar offenses), which violation resulted in a conviction and shall have a 3 material adverse effect upon the Company, any act of theft or dishonesty by Employee, or any action by Employee (or failure to act). (d) Without Cause. The Company and Employee shall each have the right, upon written notice to the other, to terminate Employee's employment under this Agreement without cause. Such termination shall be effective 30 days after receipt of such notice. 5. Effects of Termination (a) If Employee's employment under this Agreement is terminated pursuant to Sections 4(a), (b) or (c), if Employee resigns pursuant to Section 4(d) or if either party gives notice to the other party of its intention not to renew this Agreement in accordance with Section 17, the Company's obligations under this Agreement, including its obligations under Section 3, shall end except for the Company's obligation to: (i) reimburse Employee (or his estate) for all out-of-pocket expenses incurred and unpaid pursuant to Section 3(c) and all benefits actually due pursuant to Sections 3(d), accrued and unpaid through the date of termination; and (ii) pay to Employee (or his estate) any salary and bonus compensation, pursuant to Sections 3(a) and 3(b), actually earned, accrued and unpaid through the date of termination. (b) If the Company terminates Employee's employment under this Agreement pursuant to Section 4(d), or if the Company provides notice pursuant to Section 17 that it wishes to terminate this Agreement at the end of the initial term, the Company shall provide the benefits set forth in Section 3(d) for a period of twelve months beginning after the 30 days' written notice and shall pay Employee an amount equal to two-times the Employee's annual compensation (including bonus) within the year described herein, payable in equal monthly installments over a period of twelve months beginning after the 30 days' written notice, subject to earlier termination upon the occurrence of any of the events described in Sections 4(a) or (c). The Employee shall also be entitled to accelerate the vesting of any and all stock options which are not currently vested. Except for the payment and benefits set forth in the preceding sentence, Employee shall be entitled to no other compensation, payment or benefit from the Company upon termination by the Company pursuant to Section 4 (d) above or section 17 below. (c) Termination of Employee's employment under this Agreement shall not affect either party's rights and obligations under Sections 3 (subject to the limitations set forth in Sections 5(a) and (b)), 5, 7, 8, 9, 10 and 11, and such rights and obligations shall continue and survive the termination of Employee's employment and this Agreement, for any reason, notwithstanding any breach of this Agreement by Employee or by the Company. 6. Conflicts of Interest While employed by the Company, Employee shall not, directly or indirectly, unless approved in writing by the Chairman of the Board of the Company: (a) participate in any way in the benefits of transactions between the Company and its suppliers or customers, or have personal financial transactions with any of the Company's suppliers or customers, including, without limitation, having a financial interest in the Company's suppliers or customers, or making loans to, or receiving loans from, the 4 Company's suppliers or customers; (b) realize a personal gain or advantage from a transaction in which the Company has an interest or use information obtained in connection with Employee's employment with the Company for Employee's personal advantage or gain; or (c) accept any offer to serve as an officer, director, partner, consultant, agent or manager with, or to be employed in a technical capacity by, a person or entity which does business with the Company. 7. Solicitation of Employees and Consultants Upon termination of Employee's employment with the Company under this Agreement, with or without cause, by either the Company or Employee, Employee shall not for a period of three years following the date of such termination, directly or indirectly: (a) solicit or attempt to hire any person who is then employed by, or is a consultant to, the Company or who was employed by, or was a consultant to, the Company at any time during the two year period before the termination of Employee's employment with the Company under this Agreement; or (b) encourage any such person to terminate his or her employment or consultation with the Company. 8. Covenant Not to Compete During the term of Employee's employment under this Agreement and (i) for a period of three years following the termination of Employee's employment with the Company under this Agreement (the "Period"), Employee shall not, directly or indirectly, himself, or through or for an individual, person or entity wherever located: (a) engage in any activities, perform any services in connection with any products, or sell any products, which are similar to the activities or services performed by, or products sold by, the Company during the term of Employee's employment under this Agreement; or (b) be employed by, consult with, own any capital stock of, or have any financial interest of any kind in, any individual, person or entity, wherever located, which conducts a business reasonably similar to the Company's business; provided, that Employee may own, for investment purposes only, up to 3% of the stock of any publicly traded business whose stock is either listed on a national stock exchange or on the Nasdaq National Market System (if Employee is not otherwise affiliated with such business). 9. Solicitation of Company Customers Upon termination of Employee's employment with the Company under this Agreement, with or without cause, by either the Company or Employee, Employee shall not, directly or 5 indirectly, at any time within the Period, solicit any entity that was a customer of the Company at any time within the two year period before the date of such termination to perform services or supply products for such customer of a similar nature to those services performed or products provided by the Company to such customer during the term of such employment under this Agreement. 10. Confidentiality; Return of Documents Employee further agrees that Employee will not, at any time, for so long as any Confidential Information (as defined below) shall remain confidential or otherwise remain wholly or partially protectable, either during the term of Employee's employment with the Company under this Agreement or thereafter, use or disclose, directly or indirectly, to any person or entity outside the Company any Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean all business and technical information of any nature and in any form which at the time or times concerned is not generally known to those persons engaged in business similar to that conducted or contemplated by the Company (other than by the act or acts of an employee not authorized by the Company to disclose such information) and which relates to any one or more of the aspects of the present or past business of the Company or an affiliate of the Company or any of their respective predecessors, including, without limitation, patents and patent applications, inventions and improvements (whether or not patentable), development projects, policies, processes, formulas, techniques, know-how and other facts relating to manufacturing, sales, advertising, promotions, financial matters, or other trade secrets. Upon termination of Employee's employment with the Company for any reason, all documents, procedural manuals, guides, specifications, plans, drawings, designs and similar materials, diaries, records, notebooks, and similar repositories of or containing Confidential Information, including all copies thereof, then in Employee's possession or control, whether prepared by Employee or others, shall be left with, or forthwith returned by Employee to, the Company. 11. Company's Remedies Employee acknowledges and agrees that the covenants and undertakings contained in Sections 1(b), 6, 7, 8, 9 and 10 of this Agreement relate to matters which are of a special, unique and extraordinary character and that a violation of any of the terms of such Sections will cause irreparable injury to the Company, the amount of which will be difficult, if not impossible, to estimate or determine and which cannot be adequately compensated. Therefore, Employee agrees that the Company, in addition to any other available remedies under applicable law, shall be entitled, as a matter of course, to an injunction, restraining order or other equitable relief from any court of competent jurisdiction, restraining any violation or threatened violation of any such terms by Employee and such other persons as the court shall order. 12. Employee's Remedies Employee's remedy against the Company for breach of this Agreement and/or wrongful termination of his employment is the collection of any compensation due him as provided in Sections 3 and 5 and such other remedies available to Employee under law or in equity. 13. Assignment 6 The Company shall not be required to make any payment under this Agreement to any assignee or creditor of Employee, other than to Employee's legal representative on death. Employee's obligations under this Agreement are personal and may not be assigned, delegated or transferred in any manner and any attempt to do so shall be void. Employee, or his legal representative, shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any right of Employee under this Agreement. The Company may assign this Agreement without Employee's consent to any successor to the Company's business. This Agreement shall be binding upon, and shall inure to the benefit of, the Company, Employee and their permitted successors and assigns. 14. Company's Obligations Unfunded Except for any benefits under any benefit plan of the Company that are required by law or by express agreement to be funded, it is understood that the Company's obligations under this Agreement are not funded, and it is agreed that the Company shall not be required to set aside or escrow any monies in advance of the due date of the payment of such monies to Employee. 15. Notices (a) To Employee. Any notice to be given under this Agreement by the Company to Employee shall be deemed to be given if delivered to Employee in person or three business days after mailed to him by certified or registered mail, postage prepaid, return receipt requested, to: Robert L. Chioini 3180 Windwood Lane West Bloomfield, MI 48324 With a copy to Patrick J. Bagley, Esq. Bagley and Langan PLLC 4540 Highland Road Waterford, Michigan 48328 or at such other address as Employee shall have advised the Company in writing. (b) To the Company. Any notice to be given under this Agreement by Employee to the Company shall be deemed to be given three business days after mailed by certified or registered mail, postage prepaid, return receipt requested, to: Thomas Klema, CFO Rockwell Medical Technologies, Inc. 28025 Oakland Oaks Wixom, Michigan 48393 7 With a copy to: Rockwell Medical Technologies, Inc. 28025 Oakland Oaks Wixom, Michigan 48393 Attn: Compensation Committee Board of Directors or at such other address as the Company shall have advised Employee in writing. 16. Amendments This Agreement shall not be amended, in whole or in part, except by an agreement in writing signed by the Company and Employee. 17. Renewal of Term Not less than 30 days prior to the end of the Term, either party may notify the other party that it wishes to terminate this Agreement at the end of the Term. If no such notification is given, the Term of this Agreement will be extended for an additional one year period with the same terms and conditions as set forth herein (other than with respect to the length of the Term), subject to the rights of termination as provided herein. 18. Entire Agreement This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and all prior agreements or understandings, oral or written, are merged in this Agreement and are of no further force or effect. The parties acknowledge that they are not relying on any representations, express or implied, oral or written, except for those stated in this Agreement. 19. Captions The captions of this Agreement are included for convenience only and shall not affect the construction of any provision of this Agreement. 20. Governing Law and Forum This Agreement shall be governed by, and interpreted in accordance with, the laws of the state of Michigan, except for any provisions of Michigan law which direct the application of other states' laws, and except that if any provision of this Agreement would be illegal, void, invalid or unenforceable under such Michigan laws, then the laws of such other jurisdiction which would render such provisions valid and enforceable shall govern so far as is necessary to sustain the validity and enforceability of the terms of this Agreement. Each party consents to be subject to personal jurisdiction of the courts of Michigan, and any lawsuit or other court action or 8 proceeding relating to, or arising out of, this Agreement or Employee's employment with the Company shall be instituted only in the state or federal court of proper jurisdiction in the state of Michigan. 21. Severability All provisions, agreements, and covenants contained in this Agreement are severable, and in the event any of them shall be held to be illegal, void or invalid by any competent court or under any applicable law, such provision shall be changed to the extent reasonably necessary to make the provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void or invalid in its entirety, the remaining provisions of this Agreement shall not in any way be affected or impaired, but shall remain binding in accordance with their terms. 22. No Waiver No waiver of any provision of this Agreement shall be valid unless in writing and signed by the party against whom enforcement of the waiver is sought. The waiver by either party of any breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement as of the date and year first above written. ROCKWELL MEDICAL TECHNOLOGIES, INC. By: /s/ Thomas E. Klema -------------------------------- THOMAS E. KLEMA Its: Vice President, Secretary and Treasurer /s/ Robert L. Chioini -------------------------------- ROBERT L. CHIOINI EX-27.1 3 ex27-1.txt FINANCIAL DATA SCHEDULE

<ARTICLE> 5 <PERIOD-TYPE> 3-MOS <FISCAL-YEAR-END> DEC-31-2000 <PERIOD-START> APR-01-2000 <PERIOD-END> JUN-30-2000 <CASH> 0 <SECURITIES> 0 <RECEIVABLES> 0 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 0 <PP&E> 0 <DEPRECIATION> 0 <TOTAL-ASSETS> 0 <CURRENT-LIABILITIES> 0 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 0 <TOTAL-LIABILITY-AND-EQUITY> 0 <SALES> 1,690,450 <TOTAL-REVENUES> 1,690,450 <CGS> 1,495,329 <TOTAL-COSTS> 1,495,329 <OTHER-EXPENSES> 557,457 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> (351,665) <INCOME-TAX> 0 <INCOME-CONTINUING> (351,665) <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> (351,665) <EPS-BASIC> (.07) <EPS-DILUTED> (.07)

EX-27.2 4 ex27-2.txt FINANCIAL DATA SCHEDULE

<ARTICLE> 5 <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> DEC-31-2000 <PERIOD-START> JAN-01-2000 <PERIOD-END> JUN-30-2000 <CASH> 479,918 <SECURITIES> 0 <RECEIVABLES> 927,356 <ALLOWANCES> 53,000 <INVENTORY> 602,802 <CURRENT-ASSETS> 2,052,514 <PP&E> 1,384,516 <DEPRECIATION> 739,524 <TOTAL-ASSETS> 3,832,916 <CURRENT-LIABILITIES> 792,387 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 8,787,591 <OTHER-SE> 251,150 <TOTAL-LIABILITY-AND-EQUITY> 3,832,916 <SALES> 3,324,648 <TOTAL-REVENUES> 3,324,648 <CGS> 2,932,120 <TOTAL-COSTS> 2,932,120 <OTHER-EXPENSES> 1,005,863 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> (589,715) <INCOME-TAX> 0 <INCOME-CONTINUING> (589,715) <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> (589,715) <EPS-BASIC> (.12) <EPS-DILUTED> (.12)

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.13

   1




                              EMPLOYMENT AGREEMENT


         This Employment Agreement (this "Agreement") is entered into as of
March 20, 2000 between Rockwell Medical Technologies, Inc., a Michigan
corporation (the "Company"), and Robert L. Chioini ("Employee").

         In consideration of the mutual covenants contained in this Agreement,
the Company and Employee agree as follows:

         1. Employment

         During the term of this Agreement (as defined in Sections 2 and 4), the
Company shall employ Employee, and Employee hereby accepts such employment by
the Company, on a full time basis, in accordance with the terms and conditions
set forth in this Agreement.

            (a) Duties. Employee shall serve in such capacities and shall
perform such duties, services and responsibilities and have such authority and
powers for, and on behalf of, the Company as are established from time to time
by, or in accordance with procedures established by, the Board of Directors of
the Company.

            (b) Performance. Employee shall perform the duties called for under
this Agreement to the best of his ability and shall devote all of his business
time, energies, efforts and skill to such duties during the term of his
employment and shall not seek or accept employment with any other employer or
business or engage in any other business of any nature whatsoever, in any
capacity whatsoever, unless approved in writing in advance by the Board of
Directors of the Company.

         2. Term

         Subject to Section 17 below, the term of Employee's employment under
this Agreement shall begin on the date first written above and shall continue
for three years unless earlier terminated pursuant to Section 4.

         3. Compensation, Expenses and Benefits

         As full compensation for Employee's performance of his duties pursuant
to this Agreement, the Company shall pay Employee during the term of this
Agreement, and Employee shall accept as full payment for such performance, the
following amounts and benefits:

            (a) Salary. As salary for Employee's services to be rendered under
this Agreement, the Company shall pay Employee an annual salary of $275,000 the
first year, $300,000 the second year and $325,000 the third year, which may be
adjusted upwards from time to time by the Board of Directors of the Company.

            (b) Bonus. In addition to his salary, Employee shall be entitled to
a minimum




   2





bonus of $20,000 each quarter, or a greater amount, if determined by the Board
of Directors of the Company.

            (c) Business Expenses. The Company shall pay or reimburse Employee
for all reasonable, ordinary and necessary travel, entertainment, meals, lodging
and other out-of-pocket expenses incurred by Employee in connection with the
Company's business, for which Employee submits appropriate receipts.

            (d) Benefits. Employee shall be eligible to participate in all
fringe benefits, if any, including insurance and other employee benefit plans,
applicable to other similar executive officers of the Company, when and if
adopted and made available during the term of this Agreement to employees with
similar periods of service, subject to any eligibility or other requirements for
participating in such fringe benefits and to the actual existence of the
respective plans.

            (e) Automobile. The Company shall pay the Employee's automobile
related expenses.

         4. Termination

            (a) Death. Employee's employment under this Agreement shall
terminate immediately upon Employee's death.

            (b) Disability. Employee's employment under this Agreement shall
terminate, at the Company's option, immediately upon notice to Employee given
after Employee's "total disability," but no earlier than the later of (i) the
day after six (6) consecutive months during which Employee suffers from a "total
disability," and (ii) the day that Employee is eligible to begin receiving
disability benefits under any disability insurance policy or its equivalent
provided to employees, including the Employee, under Section 3(d) above. "Total
disability" shall mean Employee's physical or mental condition which renders
Employee unable to perform the duties contemplated by Section 1 above. If the
Company and Employee are unable to agree whether Employee is suffering from a
"total disability," the question shall be decided by a physician mutually agreed
upon and paid for by the Company, whose determination shall be final and
binding. If Employee and the Company are unable to agree on a physician,
Employee and the Company shall each choose one physician who shall mutually
choose a third physician, whose determination shall be final and binding.
Employee shall continue to receive compensation pursuant to Section 3 during the
period prior to termination of Employee's employment pursuant to this Section
4(b), less any disability benefits Employee receives pursuant to the insurance
policy or its equivalent provided by Section 3(d) with respect to such period,
if any.

            (c) With Cause. The Company shall have the right, upon written
notice to Employee, to terminate Employee's employment under this Agreement for
"cause." Such termination shall be effective immediately upon Employee's receipt
of such written notice. "Cause" means material breach by Employee of this
Agreement, any material breach by Employee of his fiduciary duties to the
Company, gross neglect, gross abuse of office amounting to a breach of trust,
fraud, any willful violation of any law, rule or regulation (other than traffic
violations and similar offenses), which violation resulted in a conviction and
shall have a




   3





material adverse effect upon the Company, any act of theft or dishonesty by
Employee, or any action by Employee (or failure to act).

            (d) Without Cause. The Company and Employee shall each have the
right, upon written notice to the other, to terminate Employee's employment
under this Agreement without cause. Such termination shall be effective 30 days
after receipt of such notice.

         5. Effects of Termination

            (a) If Employee's employment under this Agreement is terminated
pursuant to Sections 4(a), (b) or (c), if Employee resigns pursuant to Section
4(d) or if either party gives notice to the other party of its intention not to
renew this Agreement in accordance with Section 17, the Company's obligations
under this Agreement, including its obligations under Section 3, shall end
except for the Company's obligation to: (i) reimburse Employee (or his estate)
for all out-of-pocket expenses incurred and unpaid pursuant to Section 3(c) and
all benefits actually due pursuant to Sections 3(d), accrued and unpaid through
the date of termination; and (ii) pay to Employee (or his estate) any salary and
bonus compensation, pursuant to Sections 3(a) and 3(b), actually earned, accrued
and unpaid through the date of termination.

            (b) If the Company terminates Employee's employment under this
Agreement pursuant to Section 4(d), or if the Company provides notice pursuant
to Section 17 that it wishes to terminate this Agreement at the end of the
initial term, the Company shall provide the benefits set forth in Section 3(d)
for a period of twelve months beginning after the 30 days' written notice and
shall pay Employee an amount equal to two-times the Employee's annual
compensation (including bonus) within the year described herein, payable in
equal monthly installments over a period of twelve months beginning after the 30
days' written notice, subject to earlier termination upon the occurrence of any
of the events described in Sections 4(a) or (c). The Employee shall also be
entitled to accelerate the vesting of any and all stock options which are not
currently vested. Except for the payment and benefits set forth in the preceding
sentence, Employee shall be entitled to no other compensation, payment or
benefit from the Company upon termination by the Company pursuant to Section 4
(d) above or section 17 below.

            (c) Termination of Employee's employment under this Agreement shall
not affect either party's rights and obligations under Sections 3 (subject to
the limitations set forth in Sections 5(a) and (b)), 5, 7, 8, 9, 10 and 11, and
such rights and obligations shall continue and survive the termination of
Employee's employment and this Agreement, for any reason, notwithstanding any
breach of this Agreement by Employee or by the Company.

         6. Conflicts of Interest

         While employed by the Company, Employee shall not, directly or
indirectly, unless approved in writing by the Chairman of the Board of the
Company:

            (a) participate in any way in the benefits of transactions between
the Company and its suppliers or customers, or have personal financial
transactions with any of the Company's suppliers or customers, including,
without limitation, having a financial interest in the Company's suppliers or
customers, or making loans to, or receiving loans from, the


   4



Company's suppliers or customers;

            (b) realize a personal gain or advantage from a transaction in which
the Company has an interest or use information obtained in connection with
Employee's employment with the Company for Employee's personal advantage or
gain; or

            (c) accept any offer to serve as an officer, director, partner,
consultant, agent or manager with, or to be employed in a technical capacity by,
a person or entity which does business with the Company.

         7. Solicitation of Employees and Consultants

         Upon termination of Employee's employment with the Company under this
Agreement, with or without cause, by either the Company or Employee, Employee
shall not for a period of three years following the date of such termination,
directly or indirectly:

            (a) solicit or attempt to hire any person who is then employed by,
or is a consultant to, the Company or who was employed by, or was a consultant
to, the Company at any time during the two year period before the termination of
Employee's employment with the Company under this Agreement; or

            (b) encourage any such person to terminate his or her employment or
consultation with the Company.

         8. Covenant Not to Compete

         During the term of Employee's employment under this Agreement and (i)
for a period of three years following the termination of Employee's employment
with the Company under this Agreement (the "Period"), Employee shall not,
directly or indirectly, himself, or through or for an individual, person or
entity wherever located:

            (a) engage in any activities, perform any services in connection
with any products, or sell any products, which are similar to the activities or
services performed by, or products sold by, the Company during the term of
Employee's employment under this Agreement; or

            (b) be employed by, consult with, own any capital stock of, or have
any financial interest of any kind in, any individual, person or entity,
wherever located, which conducts a business reasonably similar to the Company's
business; provided, that Employee may own, for investment purposes only, up to
3% of the stock of any publicly traded business whose stock is either listed on
a national stock exchange or on the Nasdaq National Market System (if Employee
is not otherwise affiliated with such business).

         9. Solicitation of Company Customers

         Upon termination of Employee's employment with the Company under this
Agreement, with or without cause, by either the Company or Employee, Employee
shall not, directly or



   5




indirectly, at any time within the Period, solicit any entity that was a
customer of the Company at any time within the two year period before the date
of such termination to perform services or supply products for such customer of
a similar nature to those services performed or products provided by the Company
to such customer during the term of such employment under this Agreement.

         10. Confidentiality; Return of Documents

         Employee further agrees that Employee will not, at any time, for so
long as any Confidential Information (as defined below) shall remain
confidential or otherwise remain wholly or partially protectable, either during
the term of Employee's employment with the Company under this Agreement or
thereafter, use or disclose, directly or indirectly, to any person or entity
outside the Company any Confidential Information. For purposes of this
Agreement, "Confidential Information" shall mean all business and technical
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in business similar to that
conducted or contemplated by the Company (other than by the act or acts of an
employee not authorized by the Company to disclose such information) and which
relates to any one or more of the aspects of the present or past business of the
Company or an affiliate of the Company or any of their respective predecessors,
including, without limitation, patents and patent applications, inventions and
improvements (whether or not patentable), development projects, policies,
processes, formulas, techniques, know-how and other facts relating to
manufacturing, sales, advertising, promotions, financial matters, or other trade
secrets. Upon termination of Employee's employment with the Company for any
reason, all documents, procedural manuals, guides, specifications, plans,
drawings, designs and similar materials, diaries, records, notebooks, and
similar repositories of or containing Confidential Information, including all
copies thereof, then in Employee's possession or control, whether prepared by
Employee or others, shall be left with, or forthwith returned by Employee to,
the Company.

         11. Company's Remedies

         Employee acknowledges and agrees that the covenants and undertakings
contained in Sections 1(b), 6, 7, 8, 9 and 10 of this Agreement relate to
matters which are of a special, unique and extraordinary character and that a
violation of any of the terms of such Sections will cause irreparable injury to
the Company, the amount of which will be difficult, if not impossible, to
estimate or determine and which cannot be adequately compensated. Therefore,
Employee agrees that the Company, in addition to any other available remedies
under applicable law, shall be entitled, as a matter of course, to an
injunction, restraining order or other equitable relief from any court of
competent jurisdiction, restraining any violation or threatened violation of any
such terms by Employee and such other persons as the court shall order.

         12. Employee's Remedies

         Employee's remedy against the Company for breach of this Agreement
and/or wrongful termination of his employment is the collection of any
compensation due him as provided in Sections 3 and 5 and such other remedies
available to Employee under law or in equity.

         13. Assignment


   6


         The Company shall not be required to make any payment under this
Agreement to any assignee or creditor of Employee, other than to Employee's
legal representative on death. Employee's obligations under this Agreement are
personal and may not be assigned, delegated or transferred in any manner and any
attempt to do so shall be void. Employee, or his legal representative, shall
have no rights by way of anticipation or otherwise to assign or otherwise
dispose of any right of Employee under this Agreement. The Company may assign
this Agreement without Employee's consent to any successor to the Company's
business. This Agreement shall be binding upon, and shall inure to the benefit
of, the Company, Employee and their permitted successors and assigns.

         14. Company's Obligations Unfunded

         Except for any benefits under any benefit plan of the Company that are
required by law or by express agreement to be funded, it is understood that the
Company's obligations under this Agreement are not funded, and it is agreed that
the Company shall not be required to set aside or escrow any monies in advance
of the due date of the payment of such monies to Employee.

         15. Notices

            (a) To Employee. Any notice to be given under this Agreement by the
Company to Employee shall be deemed to be given if delivered to Employee in
person or three business days after mailed to him by certified or registered
mail, postage prepaid, return receipt requested, to:

                Robert L. Chioini
                3180 Windwood Lane
                West Bloomfield, MI  48324

                With a copy to

                Patrick J. Bagley, Esq.
                Bagley and Langan PLLC
                4540 Highland Road
                Waterford, Michigan 48328


or at such other address as Employee shall have advised the Company in writing.

            (b) To the Company. Any notice to be given under this Agreement by
Employee to the Company shall be deemed to be given three business days after
mailed by certified or registered mail, postage prepaid, return receipt
requested, to:

                Thomas Klema, CFO
                Rockwell Medical Technologies, Inc.
                28025 Oakland Oaks
                Wixom, Michigan 48393




   7


         With a copy to:

         Rockwell Medical Technologies, Inc.
         28025 Oakland Oaks
         Wixom, Michigan 48393
         Attn:    Compensation Committee
                  Board of Directors

or at such other address as the Company shall have advised Employee in writing.

         16. Amendments

         This Agreement shall not be amended, in whole or in part, except by an
agreement in writing signed by the Company and Employee.


         17. Renewal of Term

         Not less than 30 days prior to the end of the Term, either party may
notify the other party that it wishes to terminate this Agreement at the end of
the Term. If no such notification is given, the Term of this Agreement will be
extended for an additional one year period with the same terms and conditions as
set forth herein (other than with respect to the length of the Term), subject to
the rights of termination as provided herein.

         18. Entire Agreement

         This Agreement constitutes the entire agreement between the parties
with respect to the subject matter of this Agreement and all prior agreements or
understandings, oral or written, are merged in this Agreement and are of no
further force or effect. The parties acknowledge that they are not relying on
any representations, express or implied, oral or written, except for those
stated in this Agreement.

         19. Captions

         The captions of this Agreement are included for convenience only and
shall not affect the construction of any provision of this Agreement.

         20. Governing Law and Forum

         This Agreement shall be governed by, and interpreted in accordance
with, the laws of the state of Michigan, except for any provisions of Michigan
law which direct the application of other states' laws, and except that if any
provision of this Agreement would be illegal, void, invalid or unenforceable
under such Michigan laws, then the laws of such other jurisdiction which would
render such provisions valid and enforceable shall govern so far as is necessary
to sustain the validity and enforceability of the terms of this Agreement. Each
party consents to be subject to personal jurisdiction of the courts of Michigan,
and any lawsuit or other court action or


   8


proceeding relating to, or arising out of, this Agreement or Employee's
employment with the Company shall be instituted only in the state or federal
court of proper jurisdiction in the state of Michigan.

         21. Severability

         All provisions, agreements, and covenants contained in this Agreement
are severable, and in the event any of them shall be held to be illegal, void or
invalid by any competent court or under any applicable law, such provision shall
be changed to the extent reasonably necessary to make the provision, as so
changed, legal, valid and binding. If any provision of this Agreement is held
illegal, void or invalid in its entirety, the remaining provisions of this
Agreement shall not in any way be affected or impaired, but shall remain binding
in accordance with their terms.

         22. No Waiver

         No waiver of any provision of this Agreement shall be valid unless in
writing and signed by the party against whom enforcement of the waiver is
sought. The waiver by either party of any breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.

         IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the date and year first above written.


                             ROCKWELL MEDICAL TECHNOLOGIES, INC.

                             By:      /s/ Thomas E. Klema
                                --------------------------------
                                        THOMAS E. KLEMA


                             Its: Vice President, Secretary and Treasurer

                                       /s/ Robert L. Chioini
                                --------------------------------
                                        ROBERT L. CHIOINI

EX-27.1

 

<ARTICLE> 5

                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                             APR-01-2000
<PERIOD-END>                               JUN-30-2000
<CASH>                                               0
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                       0
<CURRENT-LIABILITIES>                                0
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                             0
<OTHER-SE>                                           0
<TOTAL-LIABILITY-AND-EQUITY>                         0
<SALES>                                      1,690,450
<TOTAL-REVENUES>                             1,690,450
<CGS>                                        1,495,329
<TOTAL-COSTS>                                1,495,329
<OTHER-EXPENSES>                               557,457
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              (351,665)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                          (351,665)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 (351,665)
<EPS-BASIC>                                      (.07)
<EPS-DILUTED>                                    (.07)


 

EX-27.2

 

<ARTICLE> 5

                             
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                             JAN-01-2000
<PERIOD-END>                               JUN-30-2000
<CASH>                                         479,918
<SECURITIES>                                         0
<RECEIVABLES>                                  927,356
<ALLOWANCES>                                    53,000
<INVENTORY>                                    602,802
<CURRENT-ASSETS>                             2,052,514
<PP&E>                                       1,384,516
<DEPRECIATION>                                 739,524
<TOTAL-ASSETS>                               3,832,916
<CURRENT-LIABILITIES>                          792,387
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                     8,787,591
<OTHER-SE>                                     251,150
<TOTAL-LIABILITY-AND-EQUITY>                 3,832,916
<SALES>                                      3,324,648
<TOTAL-REVENUES>                             3,324,648
<CGS>                                        2,932,120
<TOTAL-COSTS>                                2,932,120
<OTHER-EXPENSES>                             1,005,863
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              (589,715)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                          (589,715)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 (589,715)
<EPS-BASIC>                                      (.12)
<EPS-DILUTED>                                    (.12)