PELICAN PROPERTIES INTERNATIONAL CORP
TICKER SYMBOL: PELP
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, 2000
[ ] 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 (I.R.S Incorporation or
of Organization) Employer Identification Number)
2 Fenwick Road
Suite 100
Fort Monroe, Virginia 23651
---------------------------
(Address of Principal Executive Office)
(757) 224-5234
--------------
(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 [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common stock, par value $.001
per share as of March 31, 2000 was 5,975,851.
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
<TABLE>
<CAPTION>
Table of Contents
PART I. FINANCIAL INFORMATION
- ------------------------------
<S> <C>
ITEM. 1 Financial Statements
Report of Independent Certified Public Accountants Page 3
Condensed consolidated Balance Sheets Pages 4-5
March 31, 2000 and December 31, 1999
Condensed Consolidated Statements of Operations-- Page 6
Three Months Ended March 31, 2000 and March 31, 1999
Condensed Consolidated Statements of Cash Flows Page 7
Three Months Ended March 31, 2000 and March 31, 1999
Condensed Notes to Consolidated Financial Statements Pages 8-9
ITEM 2 - Management Discussion and Analysis of Financial Condition
And Results of Operations Pages 10-12
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1 - Legal Proceedings Page 13
ITEM 2 - Changes in Securities Page 13
ITEM 3 - Defaults upon Senior Securities Page 13
ITEM 4 - Submission of Matter to Vote of Security Holders Page 13
ITEM 5 - Other Information Page 14
ITEM 6 - Exhibits and Reports on Form 8-K Page 14
</TABLE>
2
<PAGE>
Report of Independent Certified Public Accountants
--------------------------------------------------
Board of Directors
Pelican Properties, International Corp.
and Subsidiaries
Fort Monroe, Virginia
We have reviewed the accompanying condensed consolidated balance sheet of
Pelican Properties, International Corp. and Subsidiaries as of March 31, 2000,
and the related condensed consolidated statements of operations, and cash flows
for the three-month period then ended, in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. These financial statements are the responsibility
of the Company's management.
A review of interim financial information consists principally of inquiries of
company personnel and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing standards,
the Company's consolidated balance sheet as of December 31, 1999, and the
related consolidated statement of operations, changes in stockholders' equity,
and cash flows for the year then ended (not presented herein), and in our report
dated March 17, 2000 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet information as of December 31,
1999, is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
Moore Stephens Lovelace, P.A.
Certified Public Accountants
Orlando, Florida
May 12, 2000
3
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
-UNAUDITED-
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 45,907 $ 69,037
Accounts receivable, net 43,355 87,290
Supplies 56,955 82,974
Prepaid expenses 22,582 25,380
Note receivable 500,000 500,000
Income taxes refundable - 228,000
Other current assets - 1,734
---------------- ------------
TOTAL CURRENT ASSETS 668,799 994,415
PROPERTY AND EQUIPMENT, net of accumulated depreciation
and amortization of $1,138,349 and $921,770 16,491,925 16,653,021
OTHER ASSETS
Deferred loan costs, net of accumulated amortization of $19,068 and $14,804 66,210 70,473
Deferred franchise costs, net of accumulated amortization of $423 and $106 18,577 18,894
Deposits and other 76,149 58,648
---------------- ------------
160,936 148,015
---------------- ------------
$ 17,321,660 $ 17,795,451
================ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 1,637,951 $ 1,638,750
Accounts payable and accrued liabilities 1,160,371 1,125,305
Obligation for renovations 150,000 150,000
Income taxes payable - 150,000
Other current liabilities 190,720 41,660
---------------- ------------
TOTAL CURRENT LIABILITIES 3,139,042 3,105,716
OBLIGATION FOR RENOVATIONS 504,558 496,495
LONG-TERM DEBT, less current maturities 7,347,953 7,347,563
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
DEFERRED INCOME TAXES 3,439,000 3,512,000
STOCKHOLDERS' EQUITY
Preferred Stock, 1,000,000 shares authorized; none issued or outstanding
Common Stock, par value $.001; 100,000,000 shares authorized;
5,975,851 shares issued and outstanding 5,975 5,975
Additional paid-in capital 3,393,216 3,393,216
Accumulated deficit (508,084) (65,513)
---------------- ------------
TOTAL STOCKHOLDERS' EQUITY 2,891,107 3,333,678
---------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,321,660 $ 17,795,451
================ ============
</TABLE>
5
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-UNAUDITED-
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 31 MARCH 31
2000 1999
---- ----
<S> <C> <C>
REVENUES
Rooms $ 997,200 $ 975,281
Food and beverage 230,956 230,747
Rental Income 113,336 85,396
Other 87,973 114,911
--------------- ---------------
TOTAL REVENUES 1,429,465 1,383,105
--------------- ---------------
COSTS AND EXPENSES
Rooms 309,168 330,761
Food and beverage 271,922 246,593
Other operating expenses 649,891 610,193
Corporate expenses 300,819 267,124
Sales and marketing expenses 139,809 98,443
Interest expense 202,268 226,394
Depreciation and amortization 221,159 206,156
--------------- ---------------
TOTAL COSTS AND EXPENSES 2,095,036 1,985,664
--------------- ---------------
LOSS BEFORE INCOME TAXES (665,571) (602,559)
INCOME TAX BENEFIT 223,000 226,742
--------------- ---------------
LOSS BEFORE EXTRAORDINARY ITEM (442,571) (375,817)
EXTRAORDINARY ITEM, net of taxes - 311,848
--------------- ---------------
NET LOSS $ (442,571) $ (63,969)
=============== ===============
BASIC AND DILUTED EARNINGS (LOSS)
PER COMMON SHARE:
Loss before extraordinary item $ (0.074) $ (0.074)
--------------- ---------------
Extraordinary item $ - $ 0.061
--------------- ---------------
Net loss $ (0.074) $ (0.013)
=============== ===============
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
-UNAUDITED-
For The Three Months Ended March 31, 2000 and March 31, 1999
MARCH 31 MARCH 31
2000 1999
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (442,571) $ (63,969)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 221,159 206,156
Extraordinary gain on forgiveness of debt - (500,000)
Deferred income taxes (73,000)
Change in:
Investments - 857,585
Accounts receivable 43,935 126,789
Inventories 26,019 (364)
Prepaid expenses 2,798
Other receivables 222,968
Income taxes refundable 228,000
Other assets (15,767) 48,529
Accounts payable and accrued expenses 35,066 (272,317)
Other current liabilities 149,060 148,335
Income taxes payable (150,000)
Other liabilities 8,063 (38,592)
--------------- ---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 32,762 735,120
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of fixed assets (55,483) (266,088)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings (409) (262,827)
--------------- ---------------
NET (INCREASE) DECREASE IN CASH (23,130) 206,205
CASH AT BEGINNING OF PERIOD 69,037 121,623
--------------- ---------------
CASH AT END OF PERIOD $ 45,907 $ 327,828
=============== ===============
</TABLE>
7
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying 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 has
been reviewed, but is unaudited. However, in the opinion of management, all
adjustments, considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 2000, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2000. 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, 1999. The accompanying condensed consolidated financial
statements should be read in conjuction with the 1999 financial statements which
can be found in the Company's annual report on form 10-KSB for 1999.
The March 31, 2000 condensed consolidated financial statements include the
accounts of Pelican Properties, International Corp. and its wholly owned
subsidiaries Ohio Key I, Inc., Ohio Key II, Inc., Old Point Comfort Hotel, LLC.,
Palmer Inn, Princeton, LLC., McLure House Hotel & Conference Center, LLC, and
Purchasing Concepts, Inc. All inter-company and related transactions have been
eliminated in consolidation.
NOTE 2 - LOSS PER SHARE
- -----------------------
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 - 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
continuing 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. There have been no
problems with Year 2000 issues.
8
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 4 - CURRENT DEBT MATURITY
- ------------------------------
Current maturities of the Long Term debt include the obligation to the former
owner of the Chamberlin Hotel pursuant to a mediated settlement agreement dated
February 8, 2000 (See Part II, Item 1).
NOTE 5- SUBSEQUENT EVENTS AND CONTINGENCIES
- -------------------------------------------
REFINANCE OF MORTGAGE NOTE
- --------------------------
The mortgage for the Palmer Inn will be due in late May, 2000. The Company has
secured a re-financing commitment with a major lending institution. Closing for
the re-financing is expected by mid-May, 2000.
9
<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 held assets and the
acquisition and management of additional hotel properties. This objective was
realized in 1998 with the sale of Sunshine Key and the purchase of three hotels
in the mid-Atlantic region. The Company took advantage of tax deferral
strategies through a 1031 Exchange Account. Details of such transactions have
been disclosed in prior 10-QSB reports filed in 1999, and the 10-KSB for 1999.
10
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
(Continued)
Three Months Ended March 31, 2000 compared to Three Months Ended March 31, 1999
- -------------------------------------------------------------------------------
for Continuing Operations
- -------------------------
For the period ended March 31, 2000, total revenues were $1,429,465 as compared
to $1,383,105 in 1999. Cost of Revenues was $581,090 in the period ended March
31, 2000 as compared to $577,354 in 1999. The Gross Profit in the period ended
March 31, 2000 was $848,375 as compared to $805,751 in 1999. All changes in
revenues, cost of revenues and gross profit were attributable to increases in
hotel occupancy and hotel rates; expenses increased proportionately to such
operational increases.
Total Operating expenses increased to $649,891 in the period ended March 31,
2000 from $610,193 in 1999. Corporate Office expenses increased in the period
ended March 31, 2000 to $300,819 from $267,124 in 1999. Sales and Marketing
expenses increased in the period ended March 31, 2000 to $139,809 from $98,443
in 1999. Interest expense decreased in the period ended March 31, 2000 to
$202,268 from $226,394 in 1999. Depreciation and amortization expense increased
for the period ended March 31, 2000 to $221,159 from $206,156 in 1999. Increases
in expenses (such as utilities, staffing, and supplies) from 1999 are
attributable to related increases in occupancy and hotel services, cost of sales
and marketing materials and sales related travel; also, sales department
staffing was not completed until approximately June of 1999 resulting in a
salary savings of about $13,000 for the first quarter of that year. The decrease
in interest is be attributable to the restructure of the Chamberlin hotel debt
as part of the legal agreement arrived at in February (see discussion under Part
II, Item 1, Legal Proceedings). Increases in depreciation are attributable to
increases in capital equipment during 1999.
Loss before Income Taxes was $665,571 in the period ended March 31, 2000 as
compared to $602,559 in 1999. Net Loss was $442,571 in the period ended March
31, 2000 as compared to $63,969 in 1999. The increase in Net Loss results
primarily from an Extraordinary Gain of $311,848 in 1999.
Liquidity and Capital Resources
- -------------------------------
The Company's working capital deficiency increased from December 31, 1999 by
$358,942. This increase is due to seasonal fluctuations typical for the hotel
industry in the mid-Atlantic region; usual business volume for hotels in the
Company's current markets have slowdowns during the first quarter.
At March 31, 2000 the Company had net accounts receivable of $43,355 as compared
to $164,009 at March 31, 1999. This change is attributable to an adjustment of
Allowance for Bad Debts to $157,976 late in 1999 as compared to $30,000 in the
first quarter of 1999. At March 31, 2000 the Company had accounts payable and
accrued expenses of $1,160,371 as compared to $1,125,305 at March 31, 1999.
11
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
(Continued)
ADDITIONAL FACTS TO CONSIDER
- ----------------------------
Outlook
- -------
Management continues to anticipate an increase in revenues at all three
properties through the end of 2000 (as evidenced in the first quarter).
Management continues to believe that the implementation of its central
management operation will produce decreases in management expenses incurred at
all hotel operations. The Company believes that this self-management approach
will create savings in the overall management costs as opposed to the use of
management companies. Included in this approach are accounting, sales and
marketing, purchasing, and legal counsel.
Palmer Inn remains within the average rate of comparable hotels in its current
market. The Palmer Inn is expected to begin construction of a 22 room suite wing
by June, 2000, that will be completed by the first part of 2001.
The McLure House Hotel is continuing its conversion to a Ramada Plaza Hotel.
Current emphasis is upon all common areas such as the lobby, exterior and other
public areas, corridors, meeting and ballroom space. The restaurant lease is
expected to be finalized in May, 2000. Overtures with the City of Wheeling
regarding the building of a Convention/Expo Center across the street from the
Ramada Plaza will continue throughout the year.
The Chamberlin Hotel is expected to begin renovations in the Spring, 2000. The
initial construction will cover the public areas such as the lobby, selected
meeting space, restaurant and lounge, selected corridors, and one floor of
guestrooms. In mid June the hotel will host the media covering Op Sail 2000, an
event involving several hundred sailing vessels from around the world. Between
1.5 and 2 million visitors are expected to attend this 4-day event.
The Company is continuing its investigation into several Internet opportunities
that it believes has a synergystic relationship to the existing business. It is
the hope of management that inclusion of Internet diversification will have a
positive effect on the value of the Company's stock.
New Subsidiaries
- ----------------
The Company has (as of March 2000) created a new division, Purchasing Concepts,
Inc., for the purpose of handling turnkey design, purchasing and installation
for both in-house and outside hospitality related projects. The President of
Purchasing and Design for the new division, Ms. Sheri Rountree, has extensive
experience in the hospitality industry with projects ranging from renovation to
new construction and expects to be very busy in the coming months as the Company
adds its own projects to her schedule. The Company plans extensive renovations
to the Chamberlin Hotels, as well as commencing the up-coming construction of 22
new guest suites to the Palmer Inn.
12
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
In June, 1999, the Company's subsidiaries Ohio Key I, Inc. and Ohio Key II, Inc.
(collectively, "Ohio Key") filed suit against JCB Financial Corporation, James
C. Barggren, Chamberlin Hotel, L.L.C., and The Chamberlin Hotel Company in the
Circuit Court for the City of Hampton, State of Virginia. When Ohio Key
purchased The Chamberlin Hotel, Ohio Key assumed two notes in the aggregate
principal amount of $3,000,000 payable to The Chamberlin Hotel Company, which
were secured by two deeds of trust. Said notes were paid, in full, on or about
February 4, 1999. Despite such payment, The Chamberlin Hotel Company assigned
the two deeds of trust to JCB Financial Corporation. Subsequent to such
assignment, JCB Financial Corporation refused to satisfy said deeds of trust in
the public records. Ohio Key filed the subject litigation (i) to have the two
deeds of trust judicially determined to be satisfied and discharged, and (ii) to
obtain a determination as to what amounts of money, if any, are owed by Ohio Key
to James C. Barggren and his affiliates (collectively, "Barggren"). On or about
December, 1999, the Court appointed an auditor to prepare a report ("Report")
regarding the indebtedness and claims by and between the litigants. On February
8, 2000, the parties signed a Mediated Settlement Agreement which settled and
resolved all pending claims between the parties. Pursuant to such Mediated
Settlement Agreement, Barggren agreed to release the existing deeds of trust
encumbering The Chamberlin Hotel; Ohio Key agreed (i) to immediately pay
Barggren the sum of $80,000, (ii) to execute and deliver to Barggren a deed of
trust note in the principal amount of $1,550,000 and, if the Report shows that
Barggren is indebted to Ohio Key, such indebtedness is to be offset and deducted
from the aforementioned principal sum, (iii) to execute and deliver a deed of
trust securing the aforementioned deed of trust note, and (iv) if the Report
shows that Ohio Key is indebted to Barggren, then Ohio Key is obligated to pay
such indebtedness to Barggren. Further, the parties agreed to jointly dismiss
this litigation. Ohio Key has paid to Barggren the aforementioned payment in the
amount of $80,000; however, as of this date, this litigation has not been
dismissed by the parties, and the deed of trust note and deed of trust have not
been executed nor delivered.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matter to a Vote of Security Holders
Not applicable
13
<PAGE>
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
Financial Data Schedule (for SEC use only)
Reports on Form 8-K
Change of Auditor's filed on February 4, 2000. Anticipated Filing date for
10-KSB filed on April 19, 2000.
14
<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: ,2000 By: /s/ C. John Knorr
----------- ---------------------
C. John Knorr, Chairman
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 45907
<SECURITIES> 0
<RECEIVABLES> 688121
<ALLOWANCES> 144866
<INVENTORY> 56955
<CURRENT-ASSETS> 668799
<PP&E> 17630274
<DEPRECIATION> 1138349
<TOTAL-ASSETS> 17321660
<CURRENT-LIABILITIES> 3289042
<BONDS> 0
0
0
<COMMON> 5975
<OTHER-SE> 2885132
<TOTAL-LIABILITY-AND-EQUITY> 17321660
<SALES> 1429465
<TOTAL-REVENUES> 1429465
<CGS> 581090
<TOTAL-COSTS> 2095036
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 202268
<INCOME-PRETAX> (665571)
<INCOME-TAX> (223000)
<INCOME-CONTINUING> (442571)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (442571)
<EPS-BASIC> (0.074)
<EPS-DILUTED> (0.074)
</TABLE>
