UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[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
For the transition period from _______ to _______
Commission file number 1-7865
HMG/COURTLAND PROPERTIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 59-1914299
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2701 S. Bayshore Drive, Coconut Grove, Florida 33133
(Address of principal executive offices) (Zip Code)
305-854-6803
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed
by Sections 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:
Check whether the registrant filed all documents and reports required
to be filed by Sections 12, 13, or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes __ No __
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
1,100,235 Common shares were outstanding as of July 31, 1999.
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
Index
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1999 (Unaudited) and December 31, 1998..............................................1
Condensed Consolidated Statements of Operations for the
Three and Six Months Ended June 30, 1999 and 1998 (Unaudited)................................2
Condensed Consolidated Statements of Cash Flows for the
Three and Six Months Ended June 30, 1999 and 1998 (Unaudited)................................3
Notes to Condensed Consolidated Financial Statements (Unaudited).............................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................................6
PART II. Other Information
Item 6. Reports on Form 8-K................................................................9
</TABLE>
Cautionary Statement. This Form 10-QSB contains certain statements relating to
future results of the Company that are considered "forward-looking statements"
within the meaning of the Private Litigation Reform Act of 1995. Actual results
may differ materially from those expressed or implied as a result of certain
risks and uncertainties, including, but not limited to, changes in political and
economic conditions; interest rate fluctuation; competitive pricing pressures
within the Company's market; equity and fixed income market fluctuation;
technological change; changes in law; changes in fiscal, monetary, regulatory
and tax policies; monetary fluctuations as well as other risks and uncertainties
detailed elsewhere in this Form 10- QSB or from time-to-time in the filings of
the Company with the Securities and Exchange Commission. Such forward-looking
statements speak only as of the date on which such statements are made, and the
Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events.
<PAGE>
<TABLE>
<CAPTION>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES Part I Financial Information
Item I Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1999 1998
------------ ------------
ASSETS
Investment Properties, net of accumulated depreciation:
<S> <C> <C>
Commercial and Industrial $ 3,189,657 $ 3,267,582
Hotel and Club Facility 6,201,905 6,521,428
Yacht Slips 1,468,599 1,508,291
Land Held for Development 2,608,385 3,013,272
------------ ------------
Total investment properties, net 13,468,546 14,310,573
Investments In and Receivables From Unconsolidated Entities 5,215,337 4,603,047
Notes and Advances Due From Related Parties 773,280 719,937
Loans, Notes and Other Receivables 842,520 875,614
Cash and Cash Equivalents 1,991,862 1,834,365
Investments in marketable securities 2,125,627 1,621,488
Other Assets 482,914 402,674
------------ ------------
TOTAL ASSETS $ 24,900,086 $ 24,367,698
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses 2,163,901 1,058,959
Mortgages and Notes payable 9,610,955 9,555,129
Other Liabilities 377,896 349,767
------------ ------------
TOTAL LIABILITIES 12,152,752 10,963,855
Minority interests 453,141 424,925
------------ ------------
STOCKHOLDERS' EQUITY
Preferred Stock, no par value; 2,000,000 shares
authorized; none issued
Common Stock, $1 par value; 1,500,000 shares authorized;
1,245,635 shares issued 1,245,635 1,245,635
Additional Paid-in Capital 26,283,222 26,283,222
Undistributed Gains From Sales of Real Estate, net of losses 37,037,689 36,670,311
Undistributed Losses From Operations (51,418,436) (50,015,668)
Accumulated other comprehensive income 467,220 116,555
------------ ------------
13,615,330 14,300,055
Less: Treasury Stock, at cost (145,400 shares) (1,321,137) (1,321,137)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 12,294,193 12,978,918
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,900,086 $ 24,367,698
============ ============
See notes to condensed consolidated financial statements
</TABLE>
( 1 )
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED)
Three months ended Six months ended
REVENUES June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Rentals and related revenue $ 406,468 $ 427,284 $ 839,557 $ 854,569
Marina revenues 112,474 130,414 274,307 264,840
Gain from sale of marketable securities 131,726 38,441 226,618 202,739
Gain from unconsolidated investments 35,562 30,650 143,679 65,085
Interest from invested cash, dividends and other 55,389 59,101 107,865 109,131
----------- ----------- ----------- -----------
Total revenues 741,619 685,890 1,592,026 1,496,364
----------- ----------- ----------- -----------
EXPENSES
Operating expenses:
Rental Properties and other 138,594 173,868 300,734 339,963
Marina 88,576 120,505 236,932 258,099
Advisor's fee 165,000 165,000 330,000 330,000
General and administrative 74,172 117,425 120,146 240,997
Professional fees and expenses 852,419 291,379 1,149,939 451,122
Directors' fees and expenses 11,868 8,750 20,455 15,000
Depreciation and amortization 224,466 250,443 452,302 501,373
----------- ----------- ----------- -----------
Total operating expenses 1,555,095 1,127,370 2,610,508 2,136,554
Interest expense 195,082 219,539 387,038 439,452
Minority partners' interests in operating
losses of consolidated entities (22,757) (6,140) (2,752) (9,037)
----------- ----------- ----------- -----------
Total expenses 1,727,420 1,340,769 2,994,794 2,566,969
----------- ----------- ----------- -----------
Loss before sales of real estate (985,801) (654,879) (1,402,768) (1,070,605)
Gain on sales of real estate, net 167,802 621,192 367,378 1,518,757
----------- ----------- ----------- -----------
Net (Loss) income ($ 817,999) ($ 33,687) ($1,035,390) $ 448,152
=========== =========== =========== ===========
Net (Loss) Income Per Common Share, Basic and Diluted
(Based on weighted average shares outstanding
of 1,100,235 for the three and six months ended
June 30, 1999, and 1,156,554 and 1,161,684 for
the three and six months ended June 30, 1998
respectively) ($0.74) ($0.03) ($0.94) $0.39
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements
( 2 )
<PAGE>
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net (loss) income ($1,035,390) $448,152
Adjustments to reconcile net (loss) income to net cash used in
operating activities:
Depreciation and amortization 452,302 501,373
Gain from unconsolidated investments (143,679) (65,085)
Gain on sales of real estate, net (367,378) (1,518,757)
Gain from sales of marketable securities, net (226,618) (202,739)
Minority partners' interest in operating losses (2,752) (9,037)
Changes in assets and liabilities:
(Increase) decrease in other assets (94,209) 259,359
Increase in due from affiliates (53,343) (30,456)
Increase in accounts payable and accrued expenses 1,104,942 42,579
Increase (decrease) in other liabilities 28,129 (211,874)
----------- -----------
Total adjustments 697,394 (1,234,637)
----------- -----------
Net cash used in operating activities (337,996) (786,485)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Aquisitions and improvements of properties (1,693) (217,956)
Net proceeds from disposals of properties 801,135 3,388,498
Increase in mortgage loans, notes and other loans receivable (35,999) (30,358)
Decrease in mortgage loans, notes and other loans receivable 69,093 64,235
Net (contributions to) distributions from investments (468,611) 18,056
Net proceeds from sales and redemptions of securities 633,597 607,593
Increase in investments in securities (560,453) (1,435,105)
----------- -----------
Net cash provided by investing activities 437,069 2,394,963
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgages and notes payables (444,174) (1,279,115)
Additions to mortgages and notes payables 500,000 131,542
Purchase of treasury stock (324,675)
Net contributions from minority partners 2,598 3,451
----------- -----------
Net cash provided by (used in) financing activities 58,424 (1,468,797)
----------- -----------
Net increase in cash and cash equivalents 157,497 139,681
Cash and cash equivalents at beginning of the period 1,834,365 2,492,059
----------- -----------
Cash and cash equivalents at end of the period $ 1,991,862 $ 2,631,740
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 264,000 $ 307,000
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
( 3 )
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements include all adjustments (consisting only of
normal recurring accruals) which are necessary for a fair presentation of the
results for the periods presented. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the Company's Annual Report for the year ended December 31,
1998. The results of operations for the three and six months ended June 30, 1999
are not necessarily indicative of the results to be expected for the full year.
2. GAIN ON SALES OF REAL ESTATE
In March 1999, The Grove Towne Center-Texas, Ltd. sold
approximately 2.3 acres of vacant land located in Houston, Texas for
approximately $557,000. The Company recognized a net gain of approximately
$199,000.
In June 1999, The Grove Towne Center-Texas, Ltd. sold approximately
.8 acres of vacant land located in Houston, Texas for approximately $350,000.
The Company recognized a net gain of approximately $168,000.
3. INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable securities are composed primarily of
corporate equity securities. These securities are classified as
available-for-sale and carried at fair value, based on quoted market prices. The
net unrealized gains or losses on these investments are reported as a separate
component of stockholders' equity. Gross unrealized gains on available-for-sale
securities as of June 30, 1999 were approximately $523,000. Gross unrealized
losses as of June 30, 1999 were approximately $56,000.
Gross gains on sales of marketable securities of approximately
$136,000 and $232,000 were realized during the three and six months ended June
30, 1999, respectively. Gross losses of approximately $4,000 and $5,000 were
realized during the three and six months ended June 30, 1999, respectively.
Gross gains and losses are based on the average cost method of determining cost.
( 4 )
<PAGE>
HMG/COURTLAND PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
4. COMPREHENSIVE INCOME (LOSS)
The Company has elected to report comprehensive income (loss) in
stockholders' equity. Comprehensive income (loss) is the change in equity from
transactions and other events from non-owner sources. Comprehensive income
(loss) includes net income (loss) and other comprehensive income (loss). The
components and related activity of accumulated other comprehensive income
(loss), resulting from net unrealized gain (loss) on available-for-sale
investments, are as follows:
Accumulated Other Comprehensive Income (Loss)
Balance as of January 1, 1999 $116,555
Changes in First Quarter 148,381
Changes in Second Quarter 202,284
--------
Balance as of June 30, 1999 $467,220
=========
( 5 )
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company reported a net loss of approximately $818,000 (or $.74 per
share) and $1,035,000 (or $.94 per share) for the three and six months ended
June 30, 1999, respectively. This is as compared with a net loss of
approximately $34,000 (or $.03 per share) and net income of $448,000 (or $.39
per share) for the three and six months ended June 30, 1998, respectively. Total
revenues for the three and six months ended June 30, 1999, as compared with the
same periods in 1998, increased by approximately $56,000 (or 8%) and $96,000 (or
6%), respectively. Total expenses for the three and six months ended June 30,
1999, as compared with the same periods in 1998, increased by approximately
$387,000 (or 29%) and $428,000 (or 17%), respectively. Gain on sales of real
estate for the three and six months ended June 30, 1999 was approximately
$168,000 and $367,000, respectively, as compared with approximately $621,000 and
$1,519,000 for the three and six months ended June 30, 1998, respectively.
REVENUES
Rentals and related revenues for the three and six months ended June
30, 1999 were approximately $406,000 and $840,000, respectively. This is as
compared with approximately $427,000 and $855,000, respectively, for the same
periods in 1998. These decreases of approximately $21,000 (or 5%) and $15,000
(or 2%), respectively, for the three and six month comparable periods were not
significant.
Marina revenues for the three and six months ended June 30, 1999 were
approximately $112,000 and $274,000, respectively. This is as compared with
approximately $130,000 and $265,000, respectively, for the same periods in 1998.
The decrease between the comparable three month periods ended June 30, 1999 and
1998 of approximately $18,000 (or 14%) was primarily attributable to the closing
of the marina convenience store in March 1999. The increase in marina revenues
between the comparable six month periods ended June 30, 1999 and 1998 of
approximately $9,000 (or 3%) is not significant.
Gain from the sale of marketable securities for the three and six
months ended June 30, 1999 was approximately $132,000 and $227,000,
respectively. This is as compared with approximately $38,000 and $203,000 for
the same comparable periods in 1998. These increases of approximately $94,000
(or 247%) and $24,000 (or 12%), respectively, for the three and six month
comparable periods were the result of increased sales of securities.
Gain from unconsolidated investments for the three and six months
ended June 30, 1999 was approximately $36,000 and $144,000, respectively. This
is as compared with approximately $31,000 and $65,000, respectively, for the
same periods in 1998. These increases of approximately $5,000 (or 16%) and
$79,000 (or 122%) for the three and six month comparable periods were primarily
attributable to increased gains from CII's investment in T.G.I.F. Texas, Inc. as
a result of increased interest income earned by T.G.I.F.
( 6 )
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
EXPENSES
Operating expenses of rental properties and other for the three and
six months ended June 30, 1999 were approximately $139,000 and $301,000,
respectively. This is as compared with approximately $174,000 and $340,000,
respectively, for the same periods in 1998. These decreases of approximately
$35,000 (or 20%) and $39,000 (or 11%), respectively, for the three and six month
comparable periods were primarily the result of lower insurance costs relating
to the Grove Isle property and lower real estate taxes relating to the Grove
Towne Center-Texas, Ltd. land.
Marina related expenses for the three and six months ended June 30,
1999 were approximately $89,000 and $237,000, respectively. This is as compared
with approximately $121,000 and $258,000, respectively, for the same periods in
1998. These decrease of approximately $32,000 (or 26%) and $21,000 (or 8%),
respectively, for the three and six month comparable periods were primarily
attributable to lower operating costs due to the closing of the marina store in
March 1999.
General and administrative expenses for the three and six months ended
June 30, 1999 were approximately $74,000 and $120,000, respectively. This is as
compared with approximately $117,000 and $241,000, respectively, for the same
periods in 1998. These decreases of approximately $43,000 (or 37%) and $121,000
(or 50%), respectively, for the three and six month comparable periods were
attributable to decreased general and administrative expenses of Courtland
Investments, Inc. primarily relating to decreased other taxes.
Professional fees for the three and six months ended June 30, 1999
were approximately $852,000 and $1,150,000, respectively. This is as compared
with approximately $291,000 and $451,000, respectively, for the same periods in
1998. These increases of approximately $561,000 (or 193%) and $699,000 (or
155%), respectively, for the three and six month comparable periods were the
result of increased legal fees relating to ongoing litigation, as previously
reported.
Depreciation and amortization expense for the three and six months
ended June 30, 1999 was approximately $224,000 and $452,000, respectively. This
is as compared with approximately $250,000 and $501,000, respectively, for the
same periods in 1998. These decreases of approximately $26,000 (or 10%) and
$49,000 (or 10%), respectively, for the three and six month comparable periods
were primarily due to decreased depreciation of furniture and fixtures owned by
Grove Isle Club, Inc. ("GICI"). The majority of GICI's fixed assets have reached
their useful life and are fully depreciated.
Interest expense for the three and six months ended June 30, 1999 was
approximately $195,000 and $387,000, respectively. This is as compared with
approximately $220,000 and $439,000, respectively, for the same periods in 1998.
These decreases of approximately $25,000 (or 11%) and $52,000 (12%),
respectively, for the three and six month comparable periods was primarily due
to decreased interest expense from Grove Isle Associates, Ltd. as the result of
the refinancing of debt as previously reported.
( 7 )
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's material commitments primarily consist of maturities of
debt obligations. The funds necessary to meet these obligations are expected
from the proceeds of sales of properties, refinancing, distributions from
investments and available cash. In addition, the Company intends to continue to
seek opportunities for investment in income producing properties.
MATERIAL COMPONENTS OF CASH FLOWS
For the six months ended June 30, 1999, net cash provided by investing
activities was approximately $437,000. This was comprised primarily of net
proceeds from disposal of properties of approximately $801,000 and net proceeds
from the sales and redemptions of securities of approximately $634,000. These
increases were partially offset by uses of cash resulting from increased
investments in marketable securities of approximately $560,000 and increased
contributions to unconsolidated investments of approximately $469,000.
For the six months ended June 30, 1999, net cash provided by financing
activities was approximately $58,000. This consisted primarily of additions to
mortgages payable of $500,000 less repayment of mortgages payable of $444,000.
YEAR 2000
Background
In the past, many computer software programs were written using two
digits rather than four to define the applicable year. As a result,
date-sensitive computer software may recognize a date using "00" as the year
1900 rather than the year 2000. This is generally referred to as the Year 2000
issue. If this situation occurs, the potential exists for computer system
failures or miscalculations by computer programs, which could disrupt
operations.
State of Readiness, Costs and Risks
The Company has completed the conversion of its computer system to use
4-digit year fields and is therefore believed to be "Year 2000" compliant. The
cost of such conversion was not material to the Company's financial condition or
results of operations, nor did the Company experience any material disruption in
its operations with respect thereto. The Company's computer system is small,
consisting of only six personal computers connected via one local area network
server located in one facility. The Company utilizes its computer system to
perform accounting and word processing functions only. The Company has no other
operations which rely on computers or other equipment that would be affected by
the Year 2000 issue.
The Company is exposed to the risk that one or more of its tenants
could experience Year 2000 problems that impact their ability to meet lease
obligations to the Company. To date, the Company is not aware of any tenant Year
2000 issue that would have a material adverse impact on the Company's
operations. The Company has received an interim status report from its primary
tenant at its Grove Isle property in Florida that this tenant is addressing its
Year 2000 readiness. The Company has no means of ensuring that this or any other
tenant will be Year 2000 ready. The inability of tenants to complete their Year
2000 resolution process in a timely fashion could have an adverse impact on the
Company. The effect of non-compliance by tenants is not determinable at this
time.
The Company's Year 2000 risks are considered minimal and no continency
plans are believed to be necessary.
Widespread disruptions in the national or international economy,
including disruptions affecting the financial markets, resulting from Year 2000
issues, or in certain industries, such as commercial or
( 8 )
<PAGE>
investment banks, could also have an adverse impact on the Company. The
likelihood and effect of such disruptions is not determinable at this time
Readers are cautioned that forward-looking statements contained in the
Year 2000 discussion should be read in conjunction with the Company's
disclosures regarding forward-looking statements contained in its Form 10-KSB.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported, the Company has been involved in litigation in
the Delaware Court of Chancery with two former directors of the Company, Norman
A. Fieber and Lee Gray. Mr. Gray had also served as President of the Company and
its Adviser. The Company's claims include a breach of fiduciary duty and fraud.
The claims arise out of the failure of Messrs. Gray and Fieber to disclose Mr.
Gray's and Mr. Gray's sister interests in two of the Company's joint ventures.
After a one-week trial in May of this year, the Delaware Court of
Chancery issued its opinion on July 12, 1999. The Court found that Fieber and
Gray breached their fiduciary duties of loyalty and care and defrauded the
Company. The Court indicated that it would issue an order assessing damages and
imposing injunctive relief at an early date. The Company expects to receive the
Court's order in September 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) There were no reports on Form 8-K filed for the quarter ended
June 30, 1999.
( 9 )
<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.
HMG/COURTLAND PROPERTIES, INC.
Dated: August 13, 1999 /s/ Lawrence Rothstein
Lawrence Rothstein
Director, President, Treasurer &
Secretary
Dated: August 13, 1999 /s/ Carlos Camarotti
Carlos Camarotti
Vice President - Finance and Controller
( 10 )
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000311817
<NAME> HMG/Courtland Properties, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 1,991,862
<SECURITIES> 2,125,627
<RECEIVABLES> 1,615,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 19,430,353
<DEPRECIATION> 5,961,808
<TOTAL-ASSETS> 24,900,086
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1,245,635
<OTHER-SE> 11,048,558
<TOTAL-LIABILITY-AND-EQUITY> 24,900,086
<SALES> 1,592,026
<TOTAL-REVENUES> 1,592,026
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,607,756
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 387,038
<INCOME-PRETAX> (1,035,390)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,035,390)
<EPS-BASIC> (0.94)
<EPS-DILUTED> 0.00
</TABLE>
