<PAGE>
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 June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-24713
EBS Pension, L.L.C.
(Exact name of registrant as specified in its charter)
Delaware 42-1466520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
(Address of principal executive offices)
(612) 667-4803
(Registrant's telephone number, including area code)
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 [ ]
At August 1, 1999 there were 10,000,000 Class A Membership Units outstanding and
no Class B Membership Units outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
EBS PENSION, L.L.C.
Statement of Operations
For the Three and Six Month Periods Ended June 30, 1999 and 1998
----------------------------------------------------------------
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Income:
Interest $ 18,627 $ 73,753 $ 38,825 $227,815
-------- -------- -------- --------
Total income $ 18,627 $ 73,753 $ 38,825 $227,815
======== ======== ======== ========
Expenses:
Legal fees $ 23,950 $ 30,610 $ 25,950 $ 55,100
Transfer agent and settlement
administration fees 19,000 19,060 26,000 43,060
Manager fees 12,466 38,494 25,068 38,494
Other 4,118 - 5,832 100
Accounting fees 1,000 5,000 3,000 5,000
-------- -------- -------- --------
Total expenses 60,534 93,164 85,850 141,754
-------- -------- -------- --------
Net (loss) income $(41,907) $(19,411) $(47,025) $ 86,061
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
EBS PENSION, L.L.C.
Balance Sheet as of
June 30, 1999 and December 31, 1998
-----------------------------------
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
(unaudited)
<S> <C> <C>
Assets
Cash and cash equivalents
Available for general operations $ 254,800 $ 286,927
Available for anticipated cost of legal
indemnification of officers 1,500,000 1,500,000
Interest and distribution receivable 6,168 14,313
---------- ----------
Total assets $1,760,968 $1,801,240
========== ==========
Liabilities
Accrued expenses $ 126,987 $ 112,531
Overdrawn cash balance - 7,703
---------- ----------
$ 126,987 $ 120,234
Total liabilities ========== ==========
Members' equity:
Membership Units (Class A - 10,000,000
authorized, 10,000,000 and 10,000,000 issued
and outstanding at June 30, 1999 and
December 31, 1998, respectively; Class B - 0
and 0 authorized, issued and outstanding at
June 30, 1999 and December 31, 1998,
respectively)
Paid-in capital 1,633,981 1,667,492
Retained earnings - 13,514
---------- ----------
Total members' equity 1,633,981 1,681,006
---------- ----------
Total liabilities and members' equity $1,760,968 $1,801,240
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
EBS PENSION, L.L.C.
Statement of Changes in Members' Equity
For the Six Months Ended June 30, 1999 and for the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Membership Membership Paid in Retained
Units Units Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 9,058,041 941,959 $ 43,985,315 $(51,910) $ 43,933,405
Capital distribution - - (42,318,251) - (42,318,251)
Units transferred 942,238 (942,238) - - -
Units and proceeds returned (279) 279 428 - 428
from June distribution
Period income - - - 65,424 65,424
---------- -------- ------------ -------- ------------
Balance, December 31, 1998 10,000,000 - 1,667,492 13,514 1,681,006
Year-to-date loss - - (33,511) (13,514) (47,025)
(unaudited) ---------- -------- ------------ -------- ------------
Balance, June 30, 1999
(unaudited) 10,000,000 - $ 1,633,981 $ - $ 1,633,981
========== ======== ============ ======== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
EBS PENSION, L.L.C.
Statement of Cash Flows
For the Six Months Ended June 30, 1999 and 1998
-----------------------------------------------
<TABLE>
<CAPTION>
For the six months ended
June 30,
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (47,025) $ 86,061
Reconciliation of net (loss) income to cash flows
provided by operating activities:
Decrease in amounts due from Edison Brothers
Stores, Inc. - 43,985,315
Decrease (increase) in interest and distribution
receivable 8,145 (18,515)
Increase in liabilities 6,753 92,379
---------- ------------
Cash flows (used for)/provided by operating
activities (32,127) 44,145,240
---------- ------------
Cash flows from financing activities:
Capital distribution, net - (39,977,020)
---------- ------------
Cash flows used for financing activities (39,977,020)
Net (decrease) increase in cash and cash equivalents (32,127) 4,168,220
Cash and cash equivalents at beginning of period 1,786,927 -
---------- ------------
Cash and cash equivalents at end of period $1,754,800 $ 4,168,220
========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
EBS PENSION, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Description of business
EBS Pension, L.L.C.. (the "Company") is governed by a Members Agreement,
dated as of September 25, 1997 (the "Members Agreement"). Pursuant to the
Members Agreement, the Company is organized for the exclusive purposes of
(a) receiving and administering the cash proceeds to be received by Edison
Brothers Stores, Inc. ("Edison") and its affiliated debtors in possession
(collectively with Edison, the "Debtors") as a result of the termination of
the Edison Brothers Stores, Inc. Pension Plan (the "Pension Plan"), net of
(i) the Pension Plan assets transferred to qualified replacement pension
plans, (ii) all costs, fees and expenses relating to termination of the
Pension Plan and establishment of replacement plans, and (iii) all
applicable taxes incurred or for which a reserve is established in
connection with termination of the Pension Plan (the "Net Pension Plan
Proceeds"), and (b) distributing such Net Pension Plan Proceeds to holders
of Class A Membership Units (the "Members") in accordance with the Members
Agreement.
2. Summary of significant accounting policies
This summary of significant accounting policies is presented to assist in
evaluating the Company's financial statements included in this report.
These principles conform to generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles requires that the Company's management make estimates
and assumptions that impact the reported amounts of assets and liabilities
as of the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Basis of presentation
These financial statements include the accounts of the Company for the
periods from January 1, 1998 through December 31, 1998, January 1, 1998
through June 30, 1998 (unaudited) and January 1, 1999 through June 30, 1999
(unaudited), April 1, 1998 through June 30, 1998 (unaudited) and April 1,
1999 through June 30, 1999 (unaudited).
Cash and cash equivalents
Cash and cash equivalents consists of amounts held in an account in the
Company's name at a highly-rated financial institution, along with U.S.
Treasury Securities purchased and held in the Company's name.
Accrued expenses
Accrued expenses include amounts for unpaid legal, tax, accounting, manager
and transfer agent fees. Amounts are payable within one year.
Interest
Interest income is determined on the accrual basis. Interest receivable is
due to be received within one year.
Expenses
All expenses of the Company are recorded on the accrual basis of
accounting.
Income taxes
The Company is not subject to taxes. Instead, holders of Class A Membership
Units report their distributive share of the Company's profits and losses
on their respective income tax returns.
6
<PAGE>
EBS PENSION, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. Members' equity
On September 25, 1997, Edison transferred the right to receive the Net
Pension Plan Proceeds from the termination of the Pension Plan in exchange
for 10,000,000 Class B Membership Units of the Company, which represented
all of the outstanding Membership Units of the Company. The Net Pension
Plan Proceeds amounted to $43.9 million at December 31, 1997 and were due
from Edison at that date. Pursuant to the Plan of Reorganization, an
additional amount of $5.7 million (the "Pension Plan Tax Reserve") was to
be held by Edison to satisfy certain fees and tax liabilities of Edison.
The Plan of Reorganization further provided that upon receipt of a private
letter ruling (the "Tax Ruling") from the Internal Revenue Service (the
"IRS") indicating that no tax liability existed necessitating release of
funds from the Pension Plan Tax Reserve that Edison should remit such funds
to the Company. On September 28, 1998, the IRS issued the Tax Ruling. To
date, however, Edison has not released the funds held in the Pension Plan
Tax Reserve to the Company. Some portion of the Pension Plan Tax Reserve
may ultimately be distributed by Edison to the Company. The amount of such
distribution (if any), however, cannot be determined at this time. See Note
5 hereof for further discussion of the Pension Plan Tax Reserve.
On December 12, 1997, in accordance with the Members Agreement and the Plan
of Reorganization, Edison exchanged 9,058,041 Class B Membership Units for
9,058,041 Class A Membership Units of the Company and simultaneously
distributed such Class A Membership Units to holders of Allowed General
Unsecured Claims.
During 1998, Edison paid $43.9 million to the Company in satisfaction of
the Company's receivable recorded at December 31, 1997. Of this amount,
$42.3 million was distributed to holders of Class A Membership Units during
1998, $1.5 million is retained for the anticipated cost of legal
indemnification of the officers of Edison, and the remaining amount is
retained for other anticipated expenses expected to be incurred by the
Company.
During 1998, Edison exchanged 942,238 Class B Membership Units for 942,238
Class A Membership Units of the Company and simultaneously distributed such
units to holders of Allowed General Unsecured Claims.
Also during 1998, certain Class A Membership Unit holders returned 279
Class A Membership Units to Edison as such Membership Units had been
distributed in error. The distribution proceeds relating to these returned
Membership Units are included in paid in capital and were available for
future distributions to holders of Class A Membership Units. At December
31, 1998, Edison has no Class B Membership Units, authorized, issued or
outstanding.
4. Related parties
The Manager of the Company is the same financial institution that holds the
Company's cash and cash equivalents.
5. Commitments and contingencies (unaudited)
On March 9, 1999, Edison filed for protection under Chapter 11 of the
Bankruptcy Code (the "Petition Date"). Prior to the Petition Date, Edison
had not yet released the Pension Plan Tax Reserve to the Company.
Therefore, Edison's Chapter 11 filing may have a materially adverse impact
on the collectibility of the Pension Plan Tax Reserve discussed in the
first paragraph of Note 3 above.
On April 23, 1999, the Company filed a complaint (the "Complaint") against
Edison seeking a declaration that Edison is holding the Pension Plan Tax
Reserve in constructive trust for the Company and it is not part of
Edison's bankruptcy. On June 16, 1999, the Company filed a motion for
summary judgment with respect to the Complaint. A hearing on the Company's
summary judgment motion is set for August 28, 1999 in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
7
<PAGE>
EBS PENSION, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
6. Subsequent events (unaudited)
Cash on deposit as of July 19, 1999
As of July 19, 1999, the Company had approximately $1.7 million in cash and
cash equivalents. This sum represents the Pension Plan Funding amount as of
this date plus accrued interest from June 1, 1999 through June 30, 1999,
less disbursements through July 19, 1999. This cash, plus any portion of
Pension Plan Tax Reserve that may ultimately be received by the Company,
will be used for general operations and for the anticipated cost of legal
indemnification of the officers of Edison as contemplated by the Members'
Agreement and collecting the Pension Plan Tax Reserve from Edison. Any
amounts not used for these purposes will be made available for future
distributions to Class A Membership Unit holders.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion and analysis of the financial condition and
results of operations of the Company as of and for the periods from January 1,
1998 through December 31, 1998, January 1, 1998 through June 30, 1998
(unaudited) and January 1, 1999 through June 30, 1999 (unaudited), and of
certain factors that may affect the Company's prospective financial condition
and results of operations. The following should be read in conjunction with the
Company's Financial Statements and Notes thereto included elsewhere herein and
included in the Company's Annual Report and Form 10-K for the year ended
December 31, 1998. This discussion contains certain forward-looking statements
that involve risks and uncertainties. The Company's actual results could differ
materially from the results expressed in, or implied by, such statements.
Results of Operations/Overview
The Company, which was formed pursuant to the Plan and the Members
Agreement, is a limited purpose entity that was organized for the exclusive
purposes of (a) receiving and administering the Net Pension Plan Proceeds, and
(b) distributing the Net Pension Plan Proceeds to holders of the Company's Class
A Membership Units pursuant to the terms of the Members Agreement.
On January 23, 1998, the Company received from Edison the Net Pension Plan
Proceeds, which totaled approximately $43.9 million. The Company recognizes
income from interest earned on its funds. The Company invests such funds in a
money market fund investing solely in direct obligations of the United States
Government. The Members Agreement permits all funds received by the Company to
be temporarily invested in United States treasury bills and notes with
maturities of 12 months or less, institutional money market funds and demand or
time deposits and certificates of deposit with U.S. federal or state commercial
banks having primary capital of not less than $500 million. During the period
ended December 31, 1997, the Company did not recognize any interest income
because it did not receive the Pension Plan Proceeds until January 1998. During
the year ended December 31, 1998 and the six month periods ended June 30, 1998
and June 30, 1999, respectively, the Company recognized $321,488, $227,815 and
$38,825 of interest income, respectively. The amount of interest income
recognized by the Company in future periods will be dependent on, among other
things, (1) fluctuations in interest rates, (2) the amounts and timing of any
amounts received in the future from the Pension Plan Tax Reserve, (3) the amount
and timing of distributions, if any, to holders of Class A Membership Units, and
(4) the amount and timing of the Company's expenses.
The Company may in the future receive funds currently held in the Pension
Plan Tax Reserve, aggregating approximately $5.7 million. As noted in Note 5 to
the Financial Statements, on June 16, 1999, the Company filed a motion for
summary judgment determining that Edison is holding the Pension Plan Tax
Reserve in constructive trust for the Company and that it is not property of
Edison's bankruptcy estate, and ordering Edison to turn the money held in the
Pension Plan Tax Reserve over to the Company. A hearing before the Bankruptcy
Court on this matter is scheduled for August 28, 1999. There can be no
assurance, with regard to the outcome of the Company's motion. The Pension Plan
Tax Reserve is discussed more fully below.
The Company's general and administrative expenses consist primarily of fees
payable to the Transfer Agent, the Manager and the Company's lawyers,
accountants and auditors. The Company had expenses of $256,064, $141,754 and
$85,850 for the year ended December 31, 1998, and the six month periods ended
June 30, 1998 and June 30, 1999, respectively. These expenses are expected to
fluctuate in future periods primarily based on the volume of any future
disbursements on account of Class A Membership Units and actions taken by the
Company to collect the Pension Plan Tax Reserve from Edison.
The Company and EBS Litigation, L.L.C. (another limited liability company
formed pursuant to the Plan) have agreed to indemnify the Debtors and their
present or former officers, directors and employees from and against any losses,
claims, damages or liabilities by reason of any actions arising from or relating
to the Company and any actions taken or proceedings commenced by EBS Litigation,
L.L.C. [other than with respect to any Unresolved Avoidance Claims (as defined
in the Plan) that EBS Litigation, L.L.C. may have against such persons other
than in their capacities as officers, directors or employees of the Debtors].
Pursuant to the Plan, the Company established the Indemnification Reserve ($1.5
million) from the Net Pension Plan Proceeds for the benefit of these indemnified
persons in order to pay any costs and expenses incurred in defending any L.L.C.
Related Claims (as defined in the Plan). Payment of such costs
9
<PAGE>
and expenses must first be sought from any applicable officers' and directors'
insurance policy and then from the Indemnification Reserve. The Company's
indemnification liability is limited to the amount of the Indemnification
Reserve, i.e. an aggregate of $1.5 million. Although to date there has not been
any indemnification claim, there can be no assurance such a claim will not be
made in the future. All liabilities of the Company, including the foregoing
indemnification obligations, will be satisfied from the Net Pension Plan
Proceeds.
At December 31, 1998 and June 30, 1999, the Company had cash and cash
equivalents of approximately $1.8 million, after approximately $42.6 million was
distributed to holders of Class A Membership Units in 1998. At June 30, 1998 the
Company had cash and cash equivalents of approximately $4.2 million as not all
of the distributions had been made. When determining the amount and timing of
distributions, the Manager considered, among other things, (1) the terms of the
Members Agreement governing distributions, and (2) the anticipated amount of
necessary reserves and future administrative expenses. The amount and timing of
any future distributions of Pension Plan Proceeds will be determined by the
Manager in accordance with the terms of the Members Agreement. There can be no
assurance as to the amount (if any) of any further distributions that will be
made.
As of December 31, 1998 and June 30, 1999, the balance in the Company's
operating account was $286,927 and $254,800, respectively. Following
satisfaction of administrative expenses, any funds remaining on deposit would be
available for distribution to holders of Class A Membership Units. In addition,
any remaining balance of the $1.5 million Indemnification Reserve, if any,
ultimately would be available for such distribution.
An additional potential component of a future distribution is the Pension
Plan Tax Reserve. In connection with the termination of the Pension Plan, Edison
sought Tax Ruling from the IRS to the effect that any income realized by Edison
as a result of the Pension Plan termination will be available to offset certain
deductions realized by the Debtors in the same taxable year. On September 28,
1998, the IRS issued the Tax Ruling. The Company was advised that as a result of
the Tax Ruling, there were no additional taxes to be paid by Edison in
connection with termination of the Pension Plan. Concurrent with the issuance of
the IRS Tax Ruling, the Pension Benefit Guaranty Corporation (the "PBGC") was
conducting an audit of Edison regarding the termination of the Pension Plan.
Edison declined to release the 5.7 million pending resolution of the PBGC audit.
On March 9, 1999, Edison filed a voluntary petition for relief under the
provisions of Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. In its
petition, Edison listed the Company among its largest unsecured creditors with a
claim totaling approximately $5.7 million. The claim stems from Edison's
retention of the Pension Plan Tax Reserve.
A meeting of Edison's largest creditors convened on Friday, March 19, 1999
at the office of the United States Trustee for the District of Delaware (the
"United States Trustee"). At this meeting, the United States Trustee appointed
representatives of creditors to the Official Creditors' Committee (the "1999
Committee"). Although the Company was not appointed to the Committee, as one of
the largest creditors, the Company will continue to actively monitor the
progress of Edison's bankruptcy case. On or about April 23, 1999, the Company
filed the Complaint with the Bankruptcy Court seeking a declaration that the
Debtors are holding the Pension Plan Tax Reserve in constructive trust for the
Company, and that the Pension Plan Tax Reserve is not property of the Debtor's
estate. As of June 11, 1999, the PBGC has concluded the audit without imposing a
monetary obligation on Edison. However, as of the date hereof, Edison has not
released the Pension Plan Tax Reserve to the Company. On June 16, 1999, the
Company filed a motion for summary judgment with respect to the Complaint, and a
hearing in the Bankruptcy Court on the summary judgment motion is set for August
28, 1999.
The Company is classified as a partnership for federal income tax purposes
and, therefore, does not pay any taxes. Instead, holders of Class A Membership
Units pay taxes on their proportionate share of the Company's income.
Year-to-Date Results
Six Months ended June 30, 1999 Compared to the Six Months ended June 30, 1998.
Total income for the six months ended June 30, 1999 was $18,627 compared to
$73,753 for the six months ended June 30, 1998. This $55,126 decrease is
primarily due to the decrease in interest income as a result of the
significantly lower cash balances on hand during the respective periods.
Total expenses decreased $55,904 due primarily to a decrease in Transfer
Agent fees as a result of the decline in the amount and number of distributions
by the Transfer Agent and a decrease in legal and accounting fees due to the
10
<PAGE>
lack of activity during the period while the motions discussed above are before
the court and a decrease in manager fees as a result of amortizing the yearly
manager's fee of $50,000 ratably over the six month period.
Year 2000 Issues
In the light of the limited nature of the Company's activities, it does not
believe its operations or financial condition are affected by Year 2000 issues,
except insofar as it would be affected by a general interruption of telephone
and utility services or if its Transfer Agent were unable to process
distributions or transfers of Membership Units. The Company will seek written
assurances from its Transfer Agent as to Year 2000 compliance. If the Company
does not receive adequate assurances or if, notwithstanding those assurances,
the Transfer Agent were noncompliant, it would replace the Transfer Agent with
one that has systems that are Year 2000 compliant.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Other than the Tax Ruling described in Part I, Item 2 of this Quarterly
Report, and other than in connection with the Company's $5.7 million claim in
Edison's Bankruptcy discussed in Part I, Item 2 hereof, the Company is not
involved in any legal proceedings.
Item 6. Exhibits and Reports on Form 8-K.
<TABLE>
<CAPTION>
(A) Exhibits Description
-------- -----------
<S> <C> <C>
2.1* Amended Joint Plan of Reorganization of Edison Brothers Stores, Inc.
3.1* EBS Pension, L.L.C. Certificate of Formation
3.2* EBS Pension, L.L.C. Membership Agreement
27.1 Financial Data Schedule
* Incorporated by reference to the same numbered exhibit filed with the Registrant's Registration Statement on Form 10 originally
filed with the SEC on July 29, 1998 (SEC File No. 000-24713)
(B) Reports on Form 8-K
None.
</TABLE>
12
<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 thereunto duly authorized.
EBS PENSION, L.L.C.
By: NORWEST BANK MINNESOTA, N.A., in its
capacity as Manager of EBS Pension,
L.L.C.
By: /s/ Lon P. LeClair
--------------------------------------
Date: August 16, 1999 Lon P. LeClair
Vice President
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
Unaudited Balance Sheet and Statement of Income for the period ended June 30,
1999 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> MAR-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,754,800
<SECURITIES> 0
<RECEIVABLES> 6,168<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,760,968
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,760,968
<CURRENT-LIABILITIES> 126,987
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,633,981<F2>
<TOTAL-LIABILITY-AND-EQUITY> 1,760,968
<SALES> 0
<TOTAL-REVENUES> 18,627<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 60,534<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,907)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,907)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,907)
<EPS-BASIC> .004
<EPS-DILUTED> .004
<FN>
<F1> Includes interest only.
<F2> Includes paid in capital only.
<F3> Includes interest income only.
<F4> Includes legal, accounting, manager, transfer agent and settlement
administration and other fees.
</FN>
</TABLE>
