U.S. 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 March 31, 1999
[ ] Transition Report Under Section 13 or 15(d) of
the Exchange Act
For the transition period from _________ to__________.
Commission file number 0-23075
PELICAN PROPERTIES, INTERNATIONAL CORP.
---------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 65-0616879
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2 Fenwick Road
Fort Monroe, Virgina 23651
--------------------------
(Address of Principal Executive Office)
(305) 251-4060
--------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [ ] No [ X ]
The number of shares outstanding of the issuer's common stock, par value $.001
per share as of May 1, 1999 was 5,642,518.
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
Table of Contents
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM. 1 Financial Statements
Condensed consolidated Balance Sheets
March 31, 1999 and December 31, 1998 2
Condensed Consolidated Statements of Operations--
Three Months Ended March 31, 1999 and March 31, 1998 3
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999 and March 31, 1998 4
Condensed Notes to Consolidated Financial Statements 5 - 6
ITEM 2 Management's Discussion and Analysis or Plan of Operation 7-10
PART II. OTHER INFORMATION
- ---------------------------
Items 1 - 6 11
27. Financial Data Schedule (for SEC use only) 12
SIGNATURES
1
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31 December 31
ASSETS 1999 1998
------------ ------------
CURRENT ASSETS
Cash $ 327,828 $ 121,623
Investments 224,903 1,082,488
Accounts receivable 164,009 290,798
Other receivable 1,079 224,047
Inventories 72,915 72,551
Other current assets 13,742 35,690
------------ ------------
Total current assets 804,476 1,827,197
PROPERTY AND EQUIPMENT, net 16,119,155 16,059,223
NOTE RECEIVABLE 500,000 500,000
OTHER ASSETS, net 54,070 80,651
------------ ------------
TOTAL ASSETS $ 17,477,701 $ 18,467,071
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued expenses $ 200,811 $ 473,128
Other current liabilities 249,799 101,464
Current maturities of long-term debt 3,208,801 1,035,423
Income taxes payable 123,090 161,684
------------ ------------
Total current liabilities 3,782,501 1,771,699
------------ ------------
LONG-TERM LIABILITIES
Deferred income taxes 2,692,732 2,692,732
Long-term debt, less current maturities 6,400,000 9,336,205
------------ ------------
Total long-term liabilities 9,092,732 12,028,937
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock (6%), par value $.001;
1,000,000 shares authorized of series A
convertible cumulative 6%, -- --
none issued or outstanding
Common stock, par value $.001; 100,000,000
shares authorized 5,094,185 shares issued
and outstanding 5,094 5,094
Additional Paid-in Capital 3,278,588 3,278,588
Accumulated earnings 1,318,786 1,382,753
------------ ------------
Total stockholders' equity 4,602,468 4,666,435
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 17,477,701 $ 18,467,071
============ ============
2
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
----------------------------------------------
Three Months Ended
----------------------------------------------
(Historical) (Proforma)
Mar 31 Mar 31 Mar 31
1999 1998 1998
----------------------------------------------
<S> <C> <C> <C>
REVENUES $ 1,359,875 $ 1,307,387 $ --
COST OF REVENUES 609,821 258,843 --
-------------------------------------------------
GROSS PROFIT 750,054 1,048,544 --
-------------------------------------------------
EXPENSES:
General & administrative 617,702 372,615 50,891
Operating 325,591 134,752 --
Interest expense 226,394 114,816 --
Depreciation & amortization 206,156 84,453 --
--------------------------------------------------
Total expenses 1,375,843 706,636 50,891
-------------------------------------------------
Loss from continuing operations
before other income (expenses) (625,789) 341,908 (50,891)
OTHER INCOME (EXPENSES) 23,230 (67,565) (46,119)
-------------------------------------------------
Loss from continuing operations
before income taxes (602,559) 274,343 (97,010)
Provision for income taxes (tax benefit) (226,742) 116,195 (36,524)
-------------------------------------------------
Loss from continuing operations (375,817) 158,148 (60,486)
Income (loss) from discontinued
operations (net of income taxes) -- -- 218,634
-------------------------------------------------
Income (loss) before extraordinary gain (375,817) 158,148 158,148
Extraordinary gain (net of income taxes) 311,848 -- --
-------------------------------------------------
NET INCOME (LOSS) $ (63,969) $ 158,148 $ 158,148
=================================================
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE:
Continued operations $ (0.074) $ 0.032 $ (0.013)
Discontinued operations -- -- 0.055
Extraordinary gain 0.061 -- --
-------------------------------------------------
Net income (loss) $ (0.013) $ 0.032 $ 0.032
=================================================
Weighted average number of shares
basic and diluted 5,094,185 4,700,203 4,700,203
=================================================
</TABLE>
3
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(Historical) (Proforma)
1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations $ (63,969) $ 158,148 $ (60,486)
Adjustments to reconcile income from continuing
operations to net cash (used) provided
by continuing operations:
Depreciation and amortization 206,156 84,453 --
Non-cash compensation -- 2,500 --
Extraordinary Item - Forgiveness of debt (500,000) -- --
Impaired assets written-off and disposed of -- 28,593 --
Changes in operating assets and liabilities
Investments 857,585
Accounts receivable 126,789 25,153 --
Inventories (364) 7,432 --
Other receivable 222,968 14,810 --
Other assets 48,529 5,639 --
Accounts payable and accrued expenses (272,317) 2,633 10,625
Deferred revenues -- (74,288) --
Other current liabilities 148,335 (114,950) 648
Deffered tax liability -- 2,196 --
Income Tax payable (38,592) -- --
--------- --------- --------
Net cash provided by (used in)
continuing operations 735,120 142,319 (49,213)
Net cash provided by (used in)
discontinued operations -- 191,532
--------- --------- --------
Net cash provided by (used in)
operating activities 735,120 142,319 142,319
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures-discontinued operations -- (56,319)
Capital expenditures-continued operations (266,088) (56,319)
--------- --------- --------
Net cash (used) provided by investing
activities (266,088) (56,319) (56,319)
--------- --------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payments on long-term debt-discontinued
operations (15,763)
Principal payments on long-term debt-continued
operations (262,827) (15,763)
Proceeds from issuance of common stock 500 500
--------- --------- --------
Net cash (used) provided by
financing activities (262,827) (15,263) (15,263)
--------- --------- --------
NET INCREASE IN CASH 206,205 70,737 70,737
CASH, BEGINNING OF PERIOD 121,623 63,335 63,335
--------- --------- --------
CASH, END OF PERIOD $ 327,828 $ 134,072 $ 134,072
========= ========= =========
</TABLE>
4
<PAGE>
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The quarterly financial information included herein is
unaudited. However, in the opinion of management, all adjustments, consisting of
normal recurring accruals, considered necessary for a fair presentation, have
been included. Operating results for the three months ended March 31, 1999, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1999. A description of the Company's accounting policies and
other financial information is included in its audited consolidated financial
statements for the year ended December 31, 1998.
The March 31, 1999 unaudited condensed consolidated financial statements include
the accounts of Pelican Properties, International Corp. and its wholly-owned
subsidiaries Ohio Key I, Inc. and Ohio Key II, Inc.
On May 29, 1998, the Company, through its wholly-owned subsidiaries Ohio Key I,
and Ohio Key II, sold its only revenue-producing asset known as Sunshine Key RV
Resort and Marina. The Company's operating results for the quarter ended March
31, 1998 were segregated and reported as discontinued operations in the
accompanying pro-forma condensed consolidated statements of operations and cash
flows. The Company's March 31, 1998 condensed consolidated statement of
operations and statement of cash flows are shown both as historical and proforma
for comparison purposes.
NOTE 2 - EARNINGS (LOSS) PER SHARE
- ----------------------------------
The net income (loss) per share is computed by dividing the net income (loss)
for the period by the weighted average number of shares outstanding (as adjusted
retroactively for the dilutive effect of prior years common stock options) for
the period plus the dilutive effect of outstanding common stock options,
warrants, and preferred shares considered common stock equivalents. Stock
options and other common stock equivalents are excluded from the 1999 and 1998
net income (loss) per share calculation, as their effect would be antidilutive.
Basic and diluted earnings per share amounts are equal because the Company has
a loss from continuing operations and consideration of the redeemable preferred
stock, options, warrants and their equivalents would result in anti-dilutive
effects to earnings per share.
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION
- -------------------------------------------
Included in the Company's March 31, 1999 statement of operations is a non-cash
extraordinary gain in the amount of $311,850, net of $188,150 in taxes. This
resulted from an early extinguishment of debt as a result of refinancing
mortgage notes payable secured by the Chamberlin Hotel.
5
<PAGE>
NOTE 4 - YEAR 2000
- ------------------
The Securities and Exchange Commission has issued Staff Legal bulletin
No. 5 (CF/IM) stating that public operating companies should consider whether
there will be any anticipated costs, problems and uncertainties associated with
the year 2000 issue, which affects many existing computer programs that use only
two digits to identify a year in the date field. The Company anticipates that
its business operations will electronically interact with third parties
minimally and the issues raised by Staff Legal Bulletin No. 5 are not applicable
in any material way to the Company's business or operations. The Company
presently utilizes a hotel reservation software system that is not year 2000
compliant. Management has already scheduled the upgrade of this system in id
year 1999, which is necessary for other operational enhancement as well as
incorporating year 2000 compliance. The cost of this upgrade is immaterial and
is not expected to impact the Company's overall expenses. Additionally, the
Company intends to purchase or lease future computer systems that will have
already addressed the year 2000 issue.
NOTE 5- EXTRAORDINARY GAIN - FORGIVENESS OF INDEBTEDNESS
- --------------------------------------------------------
EARLY PAY-OFF OF MORTGAGE INDEBTEDNESS
During February 1999, the Company was offered a $500,000 discount by a creditor
for the early payoff of certain mortgage indebtedness owed by the Company. As a
result, the Company refinanced the loans with a third party, satisfied the
mortgage with the creditor and recorded a net of tax gain in the amount of
$311,850.
NOTE 6 - SUBSEQUENT EVENTS
- --------------------------
CURRENT DEBT MATURITY
The Company is currently in the process of refinancing debt approximately in the
amount of $4,972,000. $971,628 of the related Company debt is scheduled to
mature on June 29, 1999. Failure to refinance the debt could adversely impact
the Company's financial position, results of operations and cash flows.
NEW SUBSIDIARIES
Substantially all assets and liabilities of the three individual hotels were
merged separately into three wholly-owned new subsidiaries of the company in
April 1999. No pro-forma information has been presented because the limited
liability companies owning each of these hotels were formed exclusively to
succeed the business of Ohio Key I and II, and thus, the merger has no material
impact on the consolidated financial statements of the Company.
STOCK BASED CONSULTING AGREEMENT COMPENSATION
In April 1999 the Company issued 215,000 shares of common stock as compensation
for an agreement for consulting services that was fulfilled on march 31, 1999.
As a result, the Company recorded a charge to its operations approximately in
the amount of $130,000.
STOCK OPTIONS
In April 1999 the Chairman of the Board exercised options to buy 333,333
shares of common stock and was issued 50,000 shares of common stock of the
Company as restricted shares under Rule 144 of the Securities Act of 1933.
The options were granted in 1996 at an exercise price of $.01 per share.
6
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation
The following discussions should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report.
Certain matters discussed in this Quarterly Report on Form 10-QSB are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects" or words of similar import. Similarly, statements that
describe the Company's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which are described in close proximity to such
statements and which could cause actual results to differ materially from those
currently anticipated. Shareholders, potential investors and other readers are
urged to consider these factors in evaluating the forward-looking statements and
are cautioned not to place undue reliance on such forward-looking statements.
The forward-looking statements included herein are made as of the date of this
report, and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
The Company's primary objective is the management of its assets and the
acquisition and management of additional hotel properties. Until June 4, 1998,
the Company, through Ohio Key I, Inc. and Ohio Key II, Inc. ("Subsidiaries")
engaged in the ownership and management of Sunshine Key Resort ("Property"). On
June 4, 1998 the Company's Subsidiaries, sold the Property for a sale price of
$15,750,000 cash. A portion of the proceeds from the sale, $5,589,908, was used
to pay all of the Company's long term debt (including all debt associated with
the Property). Proceeds were also used to redeem all of the Company's
outstanding Series A preferred stock and satisfy all other loans associated with
the Property. After provisions for closing costs and the resolution of certain
issues with respect to the Property, the Company placed the remaining proceeds
of the sale, $8,149,727.15 (the "Remaining Proceeds"), in an IRS Rule 1031
Exchange Account with the intention of taking advantage of tax deferral
strategies if reinvested in real estate properties within specified time frames
and if certain criteria were met.
On October 15, 1998, the Company, through the Subsidiaries, purchased
the McLure House Hotel and Conference Center located in Wheeling, West Virginia
for $3,200,000 in cash. The purchase funds were drawn from the proceeds held in
the Company's Rule 1031 Exchange Account. On October 16, 1999, the Company
secured a note and mortgage on the property for $2,400,000.
On November 25, 1998, the Company through the Subsidiaries, purchased
the Palmer Inn Hotel located in Princeton, New Jersey for $7,500,000. $2,500,000
was paid in cash and the remaining balance was financed. The cash was drawn from
the proceeds held in the Company's Rule 1031 Exchange Account.
On November 30, 1998, the Company, through the Subsidiaries, purchased
the Chamberlain Hotel located in Hampton Roads, Virginia for $5,350,000.
$2,350,000 was paid in cash and the remaining balance was financed. The cash was
drawn from the proceeds held in the Company's Rule 1031 Exchange Account.
As of November 30, 1998, all requirements of the 1031 Exchange Account
had been satisfied and the Company does not anticipate any material tax
consequences due to the sale of the Property.
The Company is in the process of transferring substantially all assets
and liabilities of the
7
<PAGE>
individual hotels to three separate new wholly owned subsidiaries of the
company. The new subsidiaries are limited liability companies and are formed
exclusively to succeed the business of Ohio Key I and II, and thus, the mergers
will have no material impact on the consolidated financial statements of the
Company. The limited liability companies for the McLure, Palmer and Chamberlain
Hotels will be the McLure House Hotel and Conference Center, LLC, Palmer Inn
Princeton, LLC and Old Point Comfort Hotel, LLC respectively. As of this filing
the McLure House Hotel and Conference Center, LLC has been formed.
Three Months Ended March 31, 1999 compared to Three Months Ended March
31, 1998.
For the quarter ended March 31, 1999, revenues of continuing
operations were $1,359,875 as compared to $0.00 in 1998. Cost of Revenues was
$609,821 in the quarter ended March 31, 1999 as compared to $0.00 in 1998. The
Gross Profit in the quarter ended March 31, 1999 was $750,054 as compared to
$0.00 in 1998. All changes in revenues, cost of revenues and gross profit were
attributable to the disposition of Sunshine Key Resort in June 1998 and the
acquisition of three hotels in the fourth quarter of 1998. Since the Sunshine
Key Resort was the Company's only source of operations for 1998, the Company has
treated the sale as discontinued operations for all periods presented.
Total operating and general and administrative expenses increased
$892,402 to $943,293 in the quarter ended March 31, 1999 from $50,891 in 1998.
Interest expense was $226,394 in the quarter ended March 31, 1999, as compared
to $0 in 1998. This primarily represents the disposition of Sunshine Key Resort
in June 1998 and the acquisition of three hotels in the fourth quarter of 1998.
The decrease was attributable to the disposition of Sunshine Key Resort in June
1998 and the acquisition of three hotels in the fourth quarter of 1998. Since
the Sunshine Key Resort was the Company's only source of operations for 1998,
the Company has treated the sale as discontinued operations for all periods
presented. This increase also reflects expenses in the quarter ended March 31,
1999 for the centralization of the Company's accounting functions to the
Chamberlin which are non-recurring.
Income from continuing operations increased $505,549 to a loss of
$602,559 in the quarter ended March 31, 1999 from a loss of $97,010 in 1998. Net
income decreased $6,181 income to a loss of $63,967 in the quarter ended March
31, 1999 from $158,148 in 1998. The increases were attributable to the
disposition of Sunshine Key Resort in June 1998 and the acquisition of three
hotels in the fourth quarter of 1998. Since the Sunshine Key Resort was the
Company's only source of operations for 1998, the Company has treated the sale
as discontinued operations for all periods presented.
Liquidity and Capital Resources
The Company's working capital decreased $3,033,523 to a deficit of
$2,978,025 at March 31, 1999 from $55,498 at December 31, 1998. This decrease
was due primarily to the booking of the $2,270,000 loan on the Chamberlain
Hotel. The mortgage was put in place as a short-term loan arrangement in order
to take advantage of the previous mortgage discount. Management is in the
process of refinancing this loan and hopes to secure a conventional loan on the
hotel before the end of the second quarter. Also included in the working capital
deficit is the $1,000,000 first mortgage on the Palmer Inn that is is due on
June 29, 1999. Although the mortgage is current, management has been actively
negotiating the refinancing of the first and second mortgages looking to to
secure financing before June 29, 1999.
At March 31, 1999 the Company had accounts receivable of $164,009 as
compared to $290,798 at December 31, 1998. At March 31, 1999 the Company had
accounts payable and accrued expenses of $200,811 as compared to $473,128 at
December 31, 1998. The decreases in accounts receivable and accounts payable
is primarily due to management's efforts to minimize the amounts in these areas.
8
<PAGE>
Cash outlays for capital expenditures of property and equipment totaled
$266,088 for the period ended March 31, 1999 as compared to $56,319 for the 1998
fiscal year for continued operations. The 1998 expenditures relate to the
acquired hotels and the increase emphasizes management's intent to upgrade its
existing facilities.
As stated in the working capital section above, the Company refinanced
the $3,000,000 loan payable on the Chamberlain Hotel. The mortgage was satisfied
for $2,500,000 with the creditor and the company recorded a net of tax gain in
the amount of $311,850.
ADDITIONAL FACTS TO CONSIDER
Year 2000
The Securities and Exchange Commission has issued Staff Legal bulletin
No. 5 (CF/IM) stating that public operating companies should consider whether
there will be any anticipated costs, problems and uncertainties associated with
the year 2000 issue, which affects many existing computer programs that use only
two digits to identify a year in the date field. The Company anticipates that
its business operations will electronically interact with third parties
minimally and the issues raised by Staff Legal Bulletin No. 5 are not applicable
in any material way to the Company's business or operations. The Company
presently utilizes a hotel reservation software system that is not year 2000
compliant. Management has already scheduled the upgrade of this system in mid
year 1999, which is necessary for other operational enhancement as well as
incorporating year 2000 compliance. The cost of this upgrade is immaterial and
is not expected to impact the Company's overall expenses. Additionally, the
Company intends to purchase or lease future computer systems that will have
already addressed the year 2000 issue.
The foregoing strategies are intended to be and are designated "Year
2000 Readiness Disclosure" statements within the meaning of the year 2000
information and readiness disclosure act.
Outlook
Management anticipates an increase in revenues through the end of 1999.
Revenue increases are mostly anticipated at the McLure House Hotel and the
Palmer Inn. The Palmer Inn implemented a rate increase in early 1999 that allow
it to remain within the average rate of comparable hotels in its market.
Expenses are anticipated to increase only slightly. Management believes that the
implementation of its central management operation will produce decreases in
management expenses incurred at the Palmer Inn in fiscal 1998. This, coupled
with the anticipated minor increases in expenses at the other two hotels,
relates to an overall expected increase in the net income for all three hotels
collectively. Management does anticipate an increase in the corporate overhead
expense with the implementation of a centralized management function for the
hotels. The Company believes that this self-management approach will create a
savings in overall management costs as opposed to the use of management
companies. Management also anticipates higher overhead costs for the second
quarter of 1999. This is associated with the anticipated accounting fees to be
incurred for the fulfillment of the 8-K requirements of reporting audited
historical financials for the Palmer and Chamberlin Hotels.
The McLure House Hotel will be in the final year of a four-year capital
improvement plan in fiscal 1999. The remaining improvements include the last of
guestroom and corridor upgrades as well as upgrades to the lounge. Management
plans on funding these projects through operations. The Company is presently
analyzing the feasibility of adding an additional 20 to 30 suites at the Palmer
Inn. This would close in the back end of its "u" shaped construction and would
create a courtyard in the center of the building. Initial feasibility estimates
look favorable and the previous owner had secured the necessary local approval
for such an expansion. If the Company decides to move forward, it will look to
secure debt
9
<PAGE>
financing for this project. Management is currently developing a capital
improvement plan for the Chamberlain Hotel. It will initially focus on
improvements to guestrooms and public areas. Management plans on funding these
projects from operations.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of SecurityHolders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
27. Financial Data Schedule (for SEC use only)
Reports on Form 8-K
No reports on Form 8-K were filed in the first quarter of
1999.
11
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Securities Exchange Act
of 1934, Pelican Properties, International, Corp. has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PELICAN PROPERTIES, INTERNATIONAL, CORP.
DATE: May 20, 1999 By: /S/ C. John Knorr, Jr.
------------------------------------
C. John Knorr, Jr. Chairman
DATE: May 20, 1999 By: /S/ Timothy M. Benjamin
------------------------------------
Timothy M. Benjamin, CFO/Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-03-1999
<CASH> 327,828
<SECURITIES> 224,903
<RECEIVABLES> 164,009
<ALLOWANCES> 0
<INVENTORY> 72,915
<CURRENT-ASSETS> 804,476
<PP&E> 16,119,155
<DEPRECIATION> 206,156
<TOTAL-ASSETS> 17,477,701
<CURRENT-LIABILITIES> 3,782,501
<BONDS> 0
0
0
<COMMON> 5,094
<OTHER-SE> 4,602,468
<TOTAL-LIABILITY-AND-EQUITY> 17,477,701
<SALES> 1,359,875
<TOTAL-REVENUES> 1,359,875
<CGS> 609,821
<TOTAL-COSTS> 1,375,843
<OTHER-EXPENSES> 23,230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 226,394
<INCOME-PRETAX> (602,559)
<INCOME-TAX> (226,742)
<INCOME-CONTINUING> (375,817)
<DISCONTINUED> 0
<EXTRAORDINARY> 311,848
<CHANGES> 0
<NET-INCOME> (63,969)
<EPS-BASIC> (.074)
<EPS-DILUTED> (.074)
</TABLE>
