SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 10 OR 15(d) OF THE EXCHANGE
ACT OF 1934
Commission File Number 0-28168
JJFN Services, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 11-3289981
(State or other jurisdiction (I.R.S. Identification number)
of incorporation or organization)
2500 Military Trail North, Suite 260, Boca Raton, Florida 33431
(Address of principal executive offices)
(561)995-0043
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant(1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such
report(s), 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 last practicable date.
Outstanding Equity Securities at January 13, 1998
Class of Securities Outstanding Shares
Common Stock, $.001 par value, 17,012,005 shares
Preferred Stock, $.01 par value, 400,000 shares
<PAGE>
JJFN SERVICES, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page Number
Condensed Consolidated Balance Sheets as of 3
December 31, 1997 (unaudited) and June 30, 1997.
Condensed Consolidated Statements of Operations 4
for the three months and six months ended December 31, 1997,
and the three months and six months ended December 31, 1996.
(unaudited)
Condensed Consolidated Statements of Cash Flows 5
for the six months ended December 31, 1997,
and the six months ended December 31, 1996
(unaudited)
Notes to Condensed Consolidated Financial Statements 6-7
(unaudited)
Item 2. Management's Discussion and Analysis of Financial 8-12
Condition and Results of Operations.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit No.
11 Computation of earnings per share. 15
JJFN SERVICES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 June 30
ASSETS 1997 1997
----------- -----------
Revenue producing assets:
Model homes on lease $30,214,036 $21,409,249
Less: accumulated depreciation (693,668) (484,176)
----------- -----------
Model homes on lease, net 29,520,368 20,925,073
Real estate under contract for development & sale - 8,591,956
----------- -----------
Total revenue producing assets 29,520,368 29,517,029
----------- -----------
Other assets:
Cash 351,773 831,266
Net assets realizable on divestiture 1,100,000 1,312,500
Deferred charges and other assets 684,163 769,500
----------- -----------
Total other assets 2,135,936 2,913,266
----------- -----------
Total assets $31,656,304 $32,430,295
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $21,768,650 $22,632,465
Notes payable 1,410,907 1,025,907
Accounts payable & accrued expenses 309,416 467,214
Unearned rental revenue 303,451 215,343
----------- -----------
Total liabilities 23,792,424 24,340,929
----------- -----------
Stockholders' equity:
Convertible preferred stock, $.01 par value
25,000,000 shares authorized
400,000 shares issued and outstanding 4,000 4,000
Common stock, $.001 par value
50,000,000 shares authorized
17,012,005/16,811,990 shares issued and outstanding 17,012 16,812
Additional paid-in capital 8,346,552 8,296,049
Accumulated deficit (503,684) (227,495)
----------- -----------
Total stockholders' equity 7,863,880 8,089,366
----------- -----------
Total liabilities and stockholders' equity $31,656,304 $32,430,295
=========== ===========
See accompanying notes.
(3)
JJFN SERVICES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months and Six Months Ended December 31, 1997 and
Three Months and Six Months Ended December 31, 1996
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
--------- ---------- ---------- ----------
Revenues:
Lease revenue $ 811,917 $ 407,936 $ 1,523,705 $ 788,885
Real Estate option fees - 263,486 8,771 300,718
Model Home sales 2,893,455 1,018,890 4,311,371 1,283,169
Land sales - - 8,591,956 -
Interest Income 28,911 3,488 70,567 12,577
--------- ---------- ---------- ----------
Total Revenues 3,734,283 1,693,800 14,506,370 2,385,349
--------- ---------- ---------- ----------
Costs and expenses:
Interest expense 472,859 392,184 893,361 600,989
Cost of model homes sold 2,790,894 997,864 4,162,859 1,256,477
Land sales - - 8,591,956 -
Corporate 289,669 276,118 579,695 422,589
--------- ---------- ---------- ----------
Total Operating Expenses 3,553,422 1,666,166 14,227,871 2,280,055
--------- ---------- ---------- ----------
Income from continuing operations 180,861 27,634 278,499 105,294
before depreciation & amortization
Depreciation and amortization 301,294 149,178 554,688 280,821
--------- ---------- ---------- ----------
Loss from continuing operations (120,433) (121,544) (276,189) (175,527)
Loss from divested operations - - - ( 54,444)
Gain on disposal of divested - 284,876 - 284,876
operations
--------- ---------- ---------- ----------
Income(loss) before income taxes (120,433) 163,332 (276,189) 54,905
--------- ---------- ---------- ----------
Income taxes:
Current expense - 41,000 - 14,000
Deferred tax benefit from - (41,000) - (14,000)
utilization of net operating
loss carryforward
--------- ---------- ---------- ----------
Income taxes - - - -
--------- ---------- ---------- ----------
Net income (loss) $(120,433) $ 163,332 $(276,189) $ 54,905
Preferred stock distribution - - 5,000
--------- ---------- ---------- ----------
Income (loss) applicable to
common shareholders $(120,433) $ 163,332 $(276,189) $ 49,905
========== ========== ========== ==========
Earnings (Loss) per share data:
Continuing operations $ (.01) $ (.01) $ (.02) $ (.01)
Divested operations .00 .02 .00 .01
--------- ---------- ---------- ----------
Net income (loss) $ (.01) .01 $ (.02) $ .00
========== ========== ========== ==========
Weighted average number 16,814,179 16,659,990 16,813,085 16,443,142
of shares
(4)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1997 and December 31, 1996
(Unaudited)
Six Months Six Months
Ended Ended
12/31/97 12/31/96
----------- ----------
Net Income (Loss) $(276,189) $ 54,905
----------- ----------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Amortization expense 213,153 104,210
Depreciation expense 341,534 176,611
Gain on sale of model homes (148,512) (26,692)
Gain on disposal of divested operations - (284,876)
Changes in assets and liabilities:
Decrease in miscellaneous assets 55,180 162,783
Increase(decrease) in accounts payable/accrued exp(107,096) 137,904
Increase in unearned rental revenue 88,108 65,562
(Increase)decrease in net operating assets of
divested segment - (195,556)
----------- ----------
Total adjustments 442,367 139,946
----------- ----------
Net cash provided by operating activities 166,178 194,851
----------- ----------
Cash flows from investing activities
Purchase of model homes (5,673,205) (3,581,825)
Proceeds from sale of model homes 4,229,601 1,257,880
Proceeds from sale of land 1,716,956 -
Proceeds from sale of marketable securities - 239,250
Proceeds from note receivable of divested segment 212,500 -
Capital expenditures (264) (3,883)
----------- ----------
Net cash provided by (used in)
investing activities 485,588 (2,088,578)
----------- ----------
Cash flows from financing activities:
Proceeds from mortgages payable 2,322,710 1,390,220
Principal payments on mortgages payable (3,664,605) (1,124,364)
Deferred financing costs (174,364) (38,541)
Deferred offering costs - (53,829)
Proceeds from stockholder loans 385,000 1,150,000
Proceeds from issuance of common stock - 700
Preferred distribution - (15,000)
----------- -----------
Net cash (used in) provided by
financing activities (1,131,259) 1,309,186
----------- -----------
Net decrease in cash (479,493) (584,541)
Cash at beginning of period 831,266 770,723
----------- -----------
Cash at end of period $351,773 $ 186,182
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid - $916,114 $505,894
See accompanying notes.
(5)
JJFN SERVICES, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
(unaudited)
Note 1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments considered
necessary for a fair presentation, have been included. Operating results for
any quarter are not necessarily indicative of the results for any other
quarter or for the full year.
These statements should be read in conjunction with the financial statements
of JJFN Services, Inc. and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1997.
Note 2. Commitments & Contingencies
Model home purchase commitments
The Company has committed to acquire between 50-60 model homes at an
approximate cost of $10-12 million. It is anticipated that this transaction
will close prior to the end of February 1998. The closing is subject to
completion of due diligence, receipt of satisfactory appraisals, formal
documentation, and successful completion of financing.
Model home furnishings
The Company has committed to purchase and lease back between $3-5 million in
model home furnishings to an existing client homebuilder. The closing is
subject to completion of due diligence, formal documentation, and successful
completion of financing.
Model home sales contracts
The Company has sale contracts pending on four (4) model homes. The aggregate
sales price for the four homes is $887,000, and the aggregate purchase price
is $894,083. In accordance with the lease provisions, the lessee will make-up
any deficiency in the sales price.
Financing Activities
In order to finance its expansion, the Company conducts ongoing negotiations
with financial institutions to raise funds through debt and / or equity, and
is in various stages of negotiations relating to the following:
1) The Company is pursuing financing options in connection with a planned
land acquisition described in the Real Estate Under Contract Commitments
section of this note. The agreement is to acquire land having a fully-
developed cost of $75,000,000-$85,000,000. However, there is an intent to
increase the arrangement to $200,000,000 in net fully-developed costs. The
financing options are as follows:
(6)
a) The Company is exploring a syndicated bank loan and is evaluating
preliminary term sheets received from potential lenders while conducting
negotiations with other institutions.
b) The Company is evaluating a private placement of notes to be issued by a
wholly-owned, special-purpose vehicle under Rule 144A and anticipates an
investment grade rating on the notes.
2) The Company has entered into an agreement of mutual understanding with a
major international insurance company whereby the parties have committed to
proceed in accordance with the following:
a) The insurance company will provide a surety bond in connection with the
planned financing transactions described in paragraph 1 above. Such facility
will assure the timely payment of principal and interest on notes issued by a
wholly-owned, bankruptcy-remote, special-purpose subsidiary of the Company.
b) The agreement is subject to the following conditions; (i) satisfactory
completion of due diligence regarding the assets to be held in the Special
Purpose Entity, (ii) the execution of bank or institutional financing, and
(iii) agreement to final wording of all related legal documentation.
3) The Company closed on a new $8,000,000 revolving credit facility in
December 1997 with a Mid-Western financial institution. The Company utilized
$4.3 million of the line to purchase eighteen (18) model homes located in the
Northeast region of the United States, leaving $3.7 million available in the
facility for future acquisitions.
4) The Company has entered into an agreement to consolidate three existing
loans into one $15 million revolving credit facility with an existing
financial institution. The consolidation will take place in January 1998
and will provide the Company with an additional $1,000,000 in loan facilities.
Real Estate Under Contract Commitments
The Company has executed a letter of intent with a major publicly traded
homebuilder and real estate developer to acquire 4-5 tracts of land having a
fully developed cost of $75,000,000 to $85,000,000. The agreement provides
for a unit takedown schedule of finished lots over a period not to exceed 36
months. The Company intends to seek an increase in the letter of intent to
approximately $200,000,000 in net fully-developed costs. The closing is
subject to completion of due diligence, receipt of satisfactory appraisals,
formal documentation, and successful completion of financing.
The Company has committed to purchase approximately $50,000,000 in land or
land and development funding from one of its existing homebuilder clients.
The closing is subject to completion of due diligence, receipt of satisfactory
appraisals, formal documentation, and successful completion of financing.
(7)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company is engaged in three lines of business.
1) The purchase and leaseback on a "triple net" basis of fully furnished
model homes complete with options and upgrades to major publicly traded
homebuilders and real estate developers.
2) The real estate contract acquisition, development and sale program for
major publicly traded homebuilders and real estate developers. The
Company purchases the real estate, simultaneously enters into a bonded (not
to exceed) development contract with the builder supported by a performance
(completion) bond, who then develops the real estate. The builder
purchases the finished lots from the Company on a scheduled basis usually
not to exceed three (3) years.
3) The purchase and leaseback of model home furnishings to major publicly
traded homebuilders and real estate developers. This activity is
anticipated to commence in February 1998.
Since its inception, the Company has purchased a total of 195 model homes and
sold 50, resulting in a portfolio of 145 model homes owned at December 31,
1997. All of the Company's clients are major publicly traded homebuilders.
Since inception, the Company has entered into one land acquisition and
development contract. On July 3, 1997, the developer elected to fully exercise
its option to purchase the approximate 70-acre tract of land. The property was
purchased from the Company for the sum of $8,591,956.
(8)
A summary of the operating results of JJFN Services, Inc. and subsidiary for
the three months ended December 31, 1997, and December 31, 1996 are
presented below.
Three Months Three Months
Ended Ended
December 31 December 31
1997 % 1996 %
--------------------------------
Revenues:
Lease revenue $ 811,917 22% $407,936 24%
Real estate option fees - -% 263,486 16%
Model home sales 2,893,455 77% 1,018,890 60%
Interest income 28,911 1% 3,488 0%
--------------------------------
Total revenues $3,734,283 100% 1,693,800 100%
Costs and expenses:
Interest expense 472,859 13% 392,184 23%
Cost of model home sales 2,790,894 75% 997,864 59%
Corporate 289,669 7% 276,118 16%
--------------------------------
Total costs and expenses 3,553,422 95% 1,666,166 98%
--------------------------------
Income before depreciation & amortization 180,861 5% 27,634 2%
Depreciation & amortization 301,294 8% 149,178 9%
--------------------------------
Net Loss from continuing operations $(120,433) (3%) $(121,544) (7%)
================================
Results of Operations:
Three Months Ended December 31, 1997 compared to December 31, 1996.
For the period from October 1, 1997 through December 31, 1997, the Company
had revenues of $3,734,283 of which lease rentals on model homes totaled
$811,917 and revenues from the sale of model homes were $2,893,455. Net loss
for the period was $120,433. Depreciation and amortization for the quarter
totaled $301,294 resulting in a positive cash income from operations of
$180,861.
The Company's revenues from rental income increased approximately $404,000 (a
99% increase) during the three months ended December 31, 1997 as compared to
the three months ended December 31, 1996. This increase is due to additional
lease revenues generated from the purchase of $19,453,000 in model homes in
the twelve months ended December 31, 1997.
The Company generated no real estate option fee revenues for the three months
ended December 31, 1997. Real estate option fee revenues of $37,232 were
generated for the prior year quarter end. The decrease was do to the exercise
of the option to purchase resulting in the sale of a land parcel for
$8,591,956 on July 3, 1997.
Corporate costs increased from $276,118 for the quarter ended December 31,
1996 to $289,669 for the quarter ended December 31, 1997, representing a 5%
increase. Corporate costs as a percentage of total revenues decreased 9% for
the three months ended December 31, 1997 compared to the prior year period.
(9)
Six Months Ended December 31, 1997 compared to December 31, 1996.
For the period from July 1, 1997 through December 31, 1997, the Company had
revenues of $14,506,370 of which lease rentals on model homes totaled
$1,523,705, revenues from land sales totaled $8,591,956, revenues from the sale
of model homes were $4,311,371, and revenues from option fees were $8,771. Net
loss for the period was $276,189. Depreciation and amortization for the six
months totaled $554,688 resulting in a positive cash income from operations of
$278,499.
The Company's revenues from rental income increased approximately $789,000 (a
93% increase) during the six months ended December 31, 1997 as compared to
the six months ended December 31, 1996. This increase is due to additional
lease revenues generated from the purchase of $19,453,000 in model homes in
the twelve months ended December 31, 1997.
Real Estate option fee revenues of $8,771 were generated from the real estate
under contract program, versus $300,718 for the prior six month period. The
decrease was do to the exercise of the option to purchase resulting in the
sale of a land parcel for $8,591,956 on July 3, 1997.
Corporate costs increased from $422,589 for the six months ended December 31,
1996 to $579,695 (an increase of 37%) for the six months ended December 31,
1997. This increase was attributable to the selling, general and
administrative costs associated with generating the increased revenue levels.
Corporate costs as a percentage of total revenues decreased 14% for the six
months ended December 31, 1997 compared to the prior year period.
Model Homes
Model homes on lease have increased to $30,214,036 at December 31, 1997 from
$18,152,036 at December 31, 1996, an increase of 66%.
A breakdown of model home costs and units by state is as follows:
# Model Homes Model Home # Model Homes Model Home
Owned at Cost Owned at Cost
State 12/31/97 12/31/97 12/31/96 12/31/96
- ------------------------------------------------------------------------------
Florida 64 $ 12,898,340 73 $ 12,727,261
New Jersey 40 8,556,947 - -
Colorado 18 3,786,644 15 3,262,778
Pennsylvania 10 2,230,500 - -
Virginia 4 948,743 5 1,220,232
Texas 5 910,481 1 204,477
North Carolina 4 882,381 3 737,288
------- ------------- ------- ------------
Total 145 $ 30,214,036 97 $ 18,152,036
======= ============= ======= ============
(10)
A breakdown of lease rental revenues by state is as follows:
Lease Revenues Lease Revenues
From 10/1/97 From 10/1/96
State to 12/31/97 to 12/31/96
- ------------------------------------------------------------------------------
Florida $ 378,558 $ 245,190
New Jersey 153,965 -
Colorado 123,404 97,886
Pennsylvania 66,915 -
Virginia 35,290 36,607
Texas 27,314 6,134
North Carolina 26,471 22,119
----------- -----------
Total $ 811,917 $ 407,936
=========== ===========
The average purchase price of model homes acquired by the Company since
inception was approximately $202,000. For the quarter ended December 31,
1997, the Company has sold fifteen (15) model homes for total sales price of
$2,893,455 less costs of sales of $2,790,894 for a net gain of $102,561.
Liquidity and Capital Resources
The Registrant's principal business, leasing of model homes and real estate
under contract, is a capital-intensive operation requiring constant infusions
of cash as the number and size of transactions in which the Registrant is
involved increases. To date, this business has been financed by capital
contributed and loans made by shareholders, secured loans from banks, and a
registered offshore private placement.
These capital contributions, loans and offering have been adequate to permit
the Registrant to carry on operations to date. However, in order to finance
the expansion of operations over the coming fiscal year, additional funds
must be raised through the issuance of debt or equity securities. To fill
this need, the Registrant anticipates completing a securities offering of
$10 million prior to the end of fiscal 1998. The net proceeds of this offering,
together with new financing and existing cash of approximately $352,000,
should enable the Company to finance its growing level of operations.
The Company has executed a letter of intent with a major publicly traded
homebuilder and real estate developer to acquire 4-5 tracts of land having a
fully developed cost of $75,000,000 to $85,000,000. The agreement provides
for a unit takedown schedule of finished lots over a period not to exceed 36
months. The Company intends to seek an increase in the letter of intent to
approximately $200,000,000 in net fully-developed costs. The closing is
subject to completion of due diligence, receipt of satisfactory appraisals,
formal documentation, and successful completion of financing.
The Company has committed to acquire between 50-60 model homes at an
approximate cost of $10-12 million. It is anticipated that this transaction
will close prior to the end of February 1998. The closing is subject to
completion of due diligence, receipt of satisfactory appraisals, formal
documentation, and successful completion of financing.
(11)
The Registrant expects that it will be able to finance these transactions and
others it currently is negotiating through available cash from the sources
described above and from other secured bank loans. In addition, the
Registrant is exploring the possibility of selling, either publicly or
privately, securities backed by its model home inventory and real estate
and development contracts. There can be no assurance, however, that any of
the anticipated sources of funding will ultimately be available to the
Registrant or that other financing will be available on acceptable terms.
Cash Flow - Six Months Ended December 31, 1997.
Net cash provided by operating activities comprised net loss of $276,189,
offset by net adjustments for non-cash items of $406,175, plus a net change in
other operating assets and liabilities of $36,192.
Net cash provided by investing activities comprised proceeds from land sales
of $1,716,956 and $4,229,601 from sale of model homes, proceeds of $212,500
from note receivable of divested segment, offset by $5,673,205 in model home
purchases and $264 in capital expenditures.
Net cash used in financing activities comprised principal payments on
mortgages payable of $3,664,605 and deferred financing costs of $174,364,
offset by proceeds from mortgages payable of $2,322,710 and proceeds from
stockholder loans of $385,000.
Trends in Operations
The Registrant's operations are continuing to grow at a rapid rate. Such
growth has resulted from the ongoing acquisition of model homes under lease
and from the implementation of the Company's land acquisition and contract
development program. Both programs have generated significant interest from
national home builders and real estate developers. The Company's successful
implementation of these programs has led to increased credit facilities.
For the quarter ended December 31, 1997, purchases of model homes totaled
approximately $5,300,000, increasing total model homes on lease at December
31, 1997 to over $30,200,000. Monthly lease rental revenues on these assets
will be in excess of $302,000 per month.
Forward Looking Statements
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") concerning
the Company's operations, economic performance and financial conditions,
including, in particular, the likelihood of the Company's success in
developing and bringing to market the products which it currently has under
development, as well as procuring the necessary financing to acquire these
products. These statements are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties, and
contingencies, many of which are beyond the control of the Company and reflect
future business decisions which are subject to change. Some of these
assumptions inevitably will not materialize, and unanticipated events will
occur which will affect the Company's results. Consequently, actual results
will vary from the statements contained herein and such variance may be
material. Prospective investors should not place undue reliance on this
information.
(12)
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
On December 4, 1997 the Board of Directors accepted the resignation of
Janice Rufo as a Director. She stated that the resignation was not
being tendered by reason of any disagreement with the Company relating
to the Company's operations, policies or practices.
(13)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
JJFN SERVICES, INC.
By: /s/John P. Kushay
John P. Kushay, Treasurer
Chief Financial Officer and
Chief Accounting Officer
(Duly Authorized Officer)
Date: January 13, 1998
(14)
JJFN Services, Inc. - Form 10-Q
Six Months ended December 31, 1997 and December 31, 1996
Exhibit 11
Six Months Six Months
Ended Ended
December 31, December 31,
1997 1996
------------ ------------
Basic
Net income (loss) $ (276,189) $ 54,905
------------ ------------
Income(loss) applicable
to common shareholders (276,189) 49,905
============ ============
Weighted average number of common 16,813,085 16,443,142
shares outstanding
------------ ------------
Income (loss) per common share (0.02) 0.00
============ ============
Diluted income (loss) per common share has not been presented because the
effect of such calculation will be anti-dilutive.
(15)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 351,773
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 402,227
<PP&E> 30,284,713
<DEPRECIATION> 714,224
<TOTAL-ASSETS> 31,656,304
<CURRENT-LIABILITIES> 2,023,774
<BONDS> 21,768,650
0
4,000
<COMMON> 17,012
<OTHER-SE> 7,842,868
<TOTAL-LIABILITY-AND-EQUITY> 31,656,304
<SALES> 14,435,803
<TOTAL-REVENUES> 14,506,370
<CGS> 14,202,864
<TOTAL-COSTS> 14,782,559
<OTHER-EXPENSES> 579,695
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (276,189)
<INCOME-TAX> 0
<INCOME-CONTINUING> (276,189)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (276,189)
<EPS-PRIMARY> (0)
<EPS-DILUTED> 0
</TABLE>
