UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 March 31, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Transition Period From __________ To __________
Commission File Number 1-6802
Liberte Investors Inc.
(Exact name of Registrant as specified in its Charter)
Delaware 75-1328153
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
200 Crescent Court, Suite 1365 75201
Dallas, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (214) 871-5935
----------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES _X*_ NO ___
* The registrant's confirmed plan of reorganization under Chapter 11 of the
Bankruptcy code did not provide for the distribution of securities.
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of registrant's common stock, $.01 par value,
as of the close of business on May 13, 1999: 20,256,097 shares.
<PAGE>
LIBERTE INVESTORS INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition
March 31, 1999 and June 30, 1998.............................. 3
Consolidated Statements of Operations
Nine Months Ended March 31, 1999 and 1998..................... 4
Consolidated Statements of Operations
Three Months Ended March 31, 1999 and 1998.................... 5
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 1999 and 1998..................... 6
Notes to Consolidated Financial Statements.................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk............................................. 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................. 13
Item 2. Changes in Securities and Use of Proceeds..................... 13
Item 3. Defaults upon Senior Securities............................... 13
Item 4. Submission of Matters to a Vote of Security Holders........... 13
Item 5. Other Information............................................. 13
Item 6. Exhibits and Reports on Form 8-K.............................. 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
March 31, June 30,
1999 1998
------------- -------------
Assets
Unrestricted cash $ 56,025,684 $ 53,998,721
Restricted cash and cash equivalents 66,427 64,310
------------- -------------
Total cash and cash equivalents 56,092,111 54,063,031
Foreclosed real estate held for sale 2,810,267 3,028,273
Accrued interest and other receivables 3,921 4,343
Other assets, net 46,222 438,951
------------- -------------
Total assets $ 58,952,521 $ 57,534,598
============= =============
Liabilities and Stockholders' Equity
Liabilities-accrued and other liabilities $ 495,590 $ 507,356
Stockholders' Equity
Common stock, $.01 par value,
50,000,000 shares authorized,
20,256,097 shares issued and outstanding 202,561 202,561
Additional paid-in capital 309,392,399 309,392,399
Accumulated deficit (251,138,029) (252,567,718)
------------- -------------
Total stockholders' equity 58,456,931 57,027,242
------------- -------------
Commitments and contingencies
Total liabilities and stockholders' equity $ 58,952,521 $ 57,534,598
============= =============
See notes to consolidated financial statements.
3
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
March 31,
---------------------------
1999 1998
----------- -----------
Income
Interest on deposits in banks $ 1,925,845 $ 2,040,959
Interest income on notes receivable -- 41
Gains on sales of foreclosed real estate 119,593 --
Other 12,279 38,287
----------- -----------
Total income 2,057,717 2,079,287
----------- -----------
Expenses
Insurance 92,912 116,652
Compensation and employee benefits 79,311 63,504
Legal, audit and advisory fees 46,396 54,847
Franchise taxes 66,491 72,742
Foreclosed real estate operations 117,673 148,292
General and administrative 225,245 242,815
----------- -----------
Total expenses 628,028 698,852
----------- -----------
Net Income $ 1,429,689 $ 1,380,435
=========== ===========
Basic net income per share of common stock $ 0.07 $ 0.07
=========== ===========
Weighted average number of shares of
common stock 20,256,097 20,256,097
=========== ===========
See notes to consolidated financial statements.
4
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------------------------
1999 1998
----------- -----------
Income
Interest on deposits in banks $ 603,393 $ 676,882
Other 340 9,148
----------- -----------
Total income 603,733 686,030
----------- -----------
Expenses
Insurance 30,169 37,750
Compensation and employee benefits 28,145 26,171
Legal, audit and advisory fees 15,896 18,114
Franchise taxes 22,417 43,985
Foreclosed real estate operations 34,920 75,298
General and administrative 72,667 94,634
----------- -----------
Total expenses 204,214 295,952
----------- -----------
Net Income $ 399,519 $ 390,078
=========== ===========
Basic net income per share of common stock $ 0.02 $ 0.02
=========== ===========
Weighted average number of shares of
common stock 20,256,097 20,256,097
=========== ===========
See notes to consolidated financial statements.
5
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,429,689 $ 1,380,435
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 14,391 14,976
Amortization of discount on notes receivable -- (93)
Decrease (increase) in accrued interest and other receivables 422 (124)
Decrease in other assets 379,096 95,226
(Decrease) increase in accrued and other liabilities (5,321) 84,298
Gains from sales of foreclosed real estate (119,593) --
------------ ------------
Net cash provided by operating activities 1,698,684 1,574,718
------------ ------------
Cash flows from investing activities:
Collections of notes receivable -- 1,786
Proceeds from sales of foreclosed real estate 331,154 --
Additions to fixed assets (758) (14,632)
Increase in restricted cash and cash equivalents (2,117) (2,307)
------------ ------------
Net cash provided by (used in) investing activities 328,279 (15,153)
------------ ------------
Net increase in unrestricted cash and cash equivalents 2,026,963 1,559,565
Unrestricted cash at beginning of period 53,998,721 52,474,290
------------ ------------
Unrestricted cash at end of period $ 56,025,684 $ 54,033,855
============ ============
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
Note A - Organization
Liberte Investors Inc., a Delaware corporation (the "Company"), was organized in
April 1996 in order to effect the reorganization of Liberte Investors, a
Massachusetts business trust (the "Trust"). At a special meeting of the
shareholders of the Trust held on August 15, 1996, (the "Special Meeting"), the
Trust's shareholders approved a plan of reorganization whereby the Trust
contributed its assets to the Company and received all of the Company's
outstanding common stock, par value $.01 per share ("Shares" or "Common Stock").
The Trust then distributed to its shareholders in redemption of all outstanding
shares of beneficial interest in the Trust (the "Beneficial Shares") the Shares
of the Company. The Company assumed all of the Trust's assets and outstanding
liabilities and obligations. Thereafter, the Trust was terminated.
Note B - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and Article 10 of Regulation
S-X and therefore do not include all of the information and footnotes necessary
for a fair presentation of financial condition, results of operations, and cash
flows in conformity with generally accepted accounting principles. 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 nine months ended March 31, 1999, are not necessarily indicative
of the results that may be expected for the fiscal year ending June 30, 1999.
The accompanying consolidated financial statements include the accounts of the
Company and LNC Holdings, Inc., a wholly-owned subsidiary whose sole asset is
approximately 40 acres of land located in Arlington, Texas. All intercompany
balances and transactions have been eliminated.
Note C - Foreclosed Real Estate Held For Sale
At March 31, 1999, the Company held foreclosed real estate for sale in the form
of undeveloped land. The March 31, 1999 carrying amount of these assets was
approximately $2,810,000. The foreclosed real estate for sale consists of land
totaling approximately 546 acres in San Antonio, Texas and approximately 40
acres in Arlington, Texas.
In August 1998, the Company sold 56.6 acres of land in San Antonio, Texas to a
single-family homebuilder for $339,600. A gain of approximately $117,000 was
recognized as a result of this transaction. The buyer also has an option to
purchase two additional tracts totaling 109 acres of land adjacent to the 56.6
acres and has made a $50,000 deposit to the Company for this option to purchase.
The proceeds from the sale of the 56.6 acres were reduced by $186,000 to be used
by the buyer to extend a road into the property and by $2,756 in property taxes
paid by the purchaser. If the option to purchase the second tract is exercised,
the aggregate sales price of the second tract of land will be increased by
$186,000. These amounts are treated as non-cash transactions in the statements
of cash flows.
In September 1998, the Company sold 55 lots in Fontana, California to a
single-family homebuilder for $229,000. The 55 lots were written-down by
approximately $407,000 at June 30, 1998 to more accurately
7
<PAGE>
reflect the value of the lots based upon the selling price less costs to
complete. A gain of approximately $2,000 was recognized as a result of this
transaction. The proceeds from the sale of the 55 lots was reduced by $3,689 for
property taxes paid by the purchaser, which is treated as a non-cash item in the
statements of cash flows.
Note D - Commitments and Contingencies
The Company's wholly-owned subsidiary, LNC Holdings, Inc., owns approximately 40
acres of land located in Arlington, Texas which is encumbered by property tax
liens totaling $1,115,000, including penalties and interest. There is no
carrying value of the property due to the encumbrances.
On April 16, 1997, LNC Holdings, Inc. received a notice of final judgment from
the City of Arlington with regard to the delinquent taxes. On May 27, 1997, LNC
Holdings, Inc. notified the City of Arlington that it would execute a deed
without warranty to allow the taxing authorities to obtain title to the
property. No response has yet been received. LNC Holdings, Inc. has accrued
property taxes for calendar years 1999, 1998, 1997 and 1996 totaling $138,000.
Management believes that resolution of the delinquent tax issue with the taxing
authorities will not result in a material adverse impact on the consolidated
financial statements.
Cash and cash equivalents at March 31, 1999, included restricted cash of
approximately $66,000 for claims due to bankruptcy. On June 30, 1997, the court
issued an Administrative Closing Order and Final Decree with regard to the
bankruptcy case. The claims remaining represent unclaimed dividend checks dated
May 20, 1994. Any check not claimed will be voided after five years from the
date of the check.
The Company is involved in routine litigation incidental to its business, which,
in the opinion of management, will not result in a material adverse impact on
the Company's consolidated financial condition or results of operations.
Note E - Federal Income Taxes
Although the Company had taxable income for the nine months ended March 31, 1999
and 1998, no tax liability has been recognized due to a reduction in the
valuation allowance related to its net operating loss carryforwards. Based on
current business activity, management believes it is more likely than not that
the Company will not realize the benefits of the loss carryforwards. Therefore,
a full valuation allowance has been established. In the event the Company
expands its business operations through an acquisition, the ability to use the
loss carryforwards may change.
Note F - Concentrations of Credit Risk
At March 31, 1999, the Company had certain concentrations of credit risk with
two financial institutions in the form of cash, which amounted to approximately
$56 million. For purposes of evaluating credit risk, the stability of financial
institutions conducting business with the Company is periodically reviewed. If
the financial institutions failed to completely perform under the terms of the
financial instruments, the exposure for credit loss would be the amount of the
financial instruments less amounts covered by regulatory insurance.
Note G - Reclassifications
Certain 1998 amounts have been reclassified to conform with 1999
classifications.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
During the nine months ended March 31, 1999, Liberte Investors Inc. continued to
explore the potential acquisition of a viable operating company in order to
increase value to existing stockholders and provide a new focus and direction
for the Company. Although substantial efforts have been made in fiscal 1999 to
identify quality acquisitions, the Company has not yet entered into any
definitive acquisition agreements.
Nine Months Ended March 31, 1999 versus Nine Months Ended March 31, 1998
Net income for the nine months ended March 31, 1999 was $1,430,000 compared to
net income of $1,380,000 for the same period in 1998. The change in operating
results for the nine months was due to various factors discussed below.
Interest income related to interest-bearing deposits in banks decreased to
$1,926,000 for the nine months ended March 31, 1999 from $2,041,000 for the same
period in 1998. This decrease is due to a decline in interest rates on the
Company's interest-bearing deposits during the nine months ended March 31, 1999
versus the nine months ended March 31, 1998. Unrestricted cash increased from
$54,034,000 at March 31, 1998 to $56,026,000 at March 31, 1999 primarily due to
interest earned on the unrestricted cash accounts, proceeds from the sales of
foreclosed real estate and the liquidation of 300,000 shares of RPI preferred
stock.
There was no interest income on notes receivable for the nine months ended March
31, 1999 as compared to $41 for the same period in 1998. There were no
outstanding balances on notes receivables at March 31, 1999.
There were no gains on the sales of foreclosed real estate for the nine months
ended March 31, 1998 as compared to $120,000 for the nine months ended March 31,
1999. The gains on sales of real estate represent proceeds received from the
sale of foreclosed real estate in excess of its carrying value. The gains
recognized for the nine months ended March 31, 1999 are from the sale of 56.6
acres in San Antonio, Texas and from the sale of 55 lots in Fontana, California.
Other income decreased to $12,000 for the nine months ended March 31, 1999 as
compared to $38,000 for the nine months ended March 31, 1998. Other income for
the nine months ended March 31, 1998 and for the nine months ended March 31,
1999 are primarily dividend payments received on RPI preferred stock. Such
dividend payments for the nine months ended March 31, 1999 decreased
significantly as compared to the same period in 1998 due to the liquidation in
August 1998 of the 300,000 shares of RPI preferred stock held by the Company.
Insurance expense decreased to $93,000 for the nine months ended March 31, 1999,
as compared to $117,000 for the same period in 1998. The decrease is primarily
due to decreased premiums related to Directors' and Officers' insurance.
Compensation and employee benefits expense increased to $79,000 for the nine
months ended March 31, 1999 from $64,000 for the same period in 1998. The
increase is due to the Company having just one employee for two months of the
nine months ended March 31, 1998. The Company had two employees for all of the
nine months ended March 31, 1999.
Legal, audit and advisory fees were $46,000 for the nine months ended March 31,
1999 as compared to $55,000 for the nine months ended March 31, 1998. Legal
expenses were lower for the nine months ended March 31, 1999 as compared to the
same period in 1998 due to the Company having sold 56.6
9
<PAGE>
acres in San Antonio, Texas and 55 lots in Fontana, California, with no sales
contracts pending on the remaining foreclosed real estate.
Franchise tax expense decreased from $73,000 for the nine months ended March 31,
1998 to $66,000 for the nine months ended March 31, 1999. Franchise tax expense
for the nine months ended March 31, 1998 is higher due to an adjusting accrual
made to record 1997 Delaware franchise taxes.
Foreclosed real estate operations expense decreased from $148,000 for the nine
months ended March 31, 1998 to $118,000 for the same period in 1999. Foreclosed
real estate operations expense is higher for the nine months ended March 31,
1998 due to real estate expenses incurred to foreclose the 55 lots in Fontana,
California and lower property tax expense for the nine months ended March 31,
1999.
General and administrative expense decreased from $243,000 during the nine
months ended March 31, 1998 to $225,000 for the same period in 1999. The
decrease is attributed primarily to a reduction in shareholder relations expense
for the nine months ended March 31, 1999 as compared to the nine months ended
March 31, 1998.
Three Months Ended March 31, 1999 versus Three Months Ended March 31, 1998
Net income for the three months ended March 31, 1999 was $400,000 compared to
net income of $390,000 for the same period in 1998. The change in operating
results for the three months was due to various factors discussed below.
Interest income related to interest-bearing deposits in banks decreased to
$603,000 for the three months ended March 31, 1999 from $677,000 for the same
period in 1998. This decrease is due to a decline in interest rates on the
Company's interest-bearing deposits during the three months ended March 31, 1999
versus the three months ended March 31, 1998. Unrestricted cash increased from
$54,034,000 at March 31, 1998 to $56,026,000 at March 31, 1999 primarily due to
interest earned on the unrestricted cash accounts, proceeds from the sales of
foreclosed real estate and the liquidation of 300,000 shares of RPI preferred
stock.
Other income for the three months ended March 31, 1998 was $9,000, which was
primarily a dividend payment received on RPI preferred stock. No dividend
payments on RPI preferred stock were received for the three months ended March
31, 1999 due to the liquidation of the 300,000 shares of RPI preferred stock in
August 1998.
Insurance expense decreased to $30,000 for the three months ended March 31,
1999, as compared to $38,000 for the same period in 1998. The decrease is
primarily due to decreased premiums related to Directors' and Officers'
insurance.
Compensation and employee benefits expense increased to $28,000 for the three
months ended March 31, 1999 from $26,000 for the same period in 1998. The
increase is due to an increase in employees' salaries due to yearly adjustments.
Legal, audit and advisory fees were $16,000 for the three months ended March 31,
1999 as compared to $18,000 for the three months ended March 31, 1998. Legal
expenses are less for the three months ended March 31, 1999 because during that
period there were no sales contracts pending on the remaining foreclosed real
estate.
Franchise tax expense decreased from $44,000 for the three months ended March
31, 1998 to $22,000 for the three months ended March 31, 1999. Franchise tax
expense for the three months ended March 31, 1998 is higher due to an adjusting
accrual made to record 1997 Delaware franchise taxes.
10
<PAGE>
Foreclosed real estate operations expense decreased from $75,000 for the three
months ended March 31, 1998 to $35,000 for the same period in 1999. Foreclosed
real estate operations expense is higher for the three months ended March 31,
1998 due to real estate expenses incurred to foreclose the 55 lots in Fontana,
California and lower property tax expense for the three months ended March 31,
1999.
General and administrative expense decreased from $95,000 during the three
months ended March 31, 1998 to $73,000 for the same period in 1999. The decrease
is attributed primarily to a reduction in shareholder relations expenses for the
three months ended March 31, 1999 as compared to the three months ended March
31, 1998.
Liquidity and Capital Resources
The Company's principal funding requirements are operating expenses, including
legal, audit, and advisory expenses incurred in connection with evaluation of
potential acquisition candidates and other strategic opportunities. The Company
anticipates that its primary sources of funding for operating expenses will be
proceeds from the sale of foreclosed real estate, interest income on cash and
cash equivalents, and cash on hand.
Statements contained in this Quarterly Report on Form 10-Q which are not
historical facts are forward-looking statements. In addition, the Company,
through its senior management, from time to time makes forward-looking public
statements concerning its expected future operations and performance, including
its ability to acquire businesses in the future, and other developments. Such
forward-looking statements are necessarily estimates reflecting the Company's
best judgment based upon current information, involve a number of risks and
uncertainties, and there can be no assurance that other factors will not affect
the accuracy of such forward-looking statements. While it is impossible to
identify all such factors, factors which could cause actual results to differ
materially from those estimated by the Company include, but are not limited to,
the uncertainty as to whether the Company will be able to make future business
acquisitions or that any such acquisitions will be successful, the Company's
ability to obtain financing for any possible acquisitions, general conditions in
the economy and capital markets, and other factors which may be identified from
time to time in the Company's Securities and Exchange Commission filings and
other public announcements. Words or phrases when used in this Form 10-Q or
other filings with the Securities and Exchange Commission, such as "does not
believe" and "believes", or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
Year 2000 Issue
The Company recognized that the arrival of the Year 2000 poses a unique
challenge to the ability of an entity's information technology system and
non-information technology systems to recognize the date change from December
31, 1999 to January 1, 2000. As of March 31, 1999, the Company is continuing to
assess and has made certain changes to provide for continued functionality of
its systems. An assessment of the readiness of the Company's external entities,
such as vendors, customers, payment systems and others is ongoing. Due to the
nature and extent of the Company's operations that are effected by Year 2000
issues, the Company does not believe that Year 2000 issues will have a material
adverse effect on the business operation or the financial performance of the
Company. There can be no assurance, however, that Year 2000 issues will not
adversely effect the Company or its business. The Company believes that the cost
to make appropriate changes to its internal and external systems will not be
significant and that such costs will be funded completely through operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
11
<PAGE>
Not applicable to the Company.
12
<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Because of a recent change to Rule 14a-4(c)(1) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Company's management will have discretionary authority to vote on any
matter of which the Company does not receive notice by August 17, 1999,
with respect to proxies submitted for the 1999 Annual Meeting of the
Company's stockholders. This rule change does not affect the deadline set
forth in Rule 14a-8 promulgated under the Exchange Act for including a
stockholder proposal in the Board of Directors' solicitation of proxies.
Therefore, in order to be included in the Board of Directors' solicitation
of proxies relating to the 1999 Annual Meeting of the Company's
stockholders, a stockholder proposal must be received by the Secretary of
the Company at 200 Crescent Court, Suite 1365, Dallas, Texas 75201, no
later than June 3, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedules (included only in the EDGAR filing).
(b) Reports on Form 8-K:
None
13
<PAGE>
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 by the
undersigned thereunder duly authorized.
LIBERTE INVESTORS INC.
May 13, 1999 By: /s/ Gerald J. Ford
--------------------------------------------------
Gerald J. Ford
Chief Executive Officer and Chairman of the Board
May 13, 1999 By: /s/ Samuel C. Perry
--------------------------------------------------
Samuel C. Perry
Controller and Principal Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS DATED AS OF MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 56,092,111
<SECURITIES> 0
<RECEIVABLES> 50,143
<ALLOWANCES> 0
<INVENTORY> 2,810,267
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,952,521
<CURRENT-LIABILITIES> 495,590
<BONDS> 0
0
0
<COMMON> 203,561
<OTHER-SE> 58,254,370
<TOTAL-LIABILITY-AND-EQUITY> 58,952,521
<SALES> 0
<TOTAL-REVENUES> 2,057,717
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 628,028
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,429,689
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,429,689
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,429,689
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
