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Page 1 of 17
Exhibit Index on
Page 11 of 17
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended May 31, 1995 Commission File Number 0-9086
BANKERS BUILDING LAND TRUST
(Exact name of Registrant as specified in its charter)
Illinois 36-6067489
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
AMCORE Bank N.A., Rockford
501 Seventh Street
Rockford, Illinois, Trustee 61104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 815-968-2241
Securities registered pursuant to Section 12(g) of the Act:
5,000 Units representing beneficial interest in the Registrant.
Indicate by check mark if disclosure of delinquent files pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Yes X No ___
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 ___
1
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PART I
Item 1. Business
Registrant, Bankers Building Land Trust (the "Trust") is a trust organized
under the laws of the State of Illinois, which is engaged in the single
business activity of holding title to certain land at the southwest corner of
Clark and West Adams Streets in Chicago, Illinois, collecting rent under the
lease described below and disbursing the net proceeds. The Trust was formed
under a Trust Agreement and Declaration of Trust (the "Trust Agreement") dated
June 1, 1926 with the National Bank of the Republic of Chicago, as Trustee, and
will terminate upon the occurrence of certain conditions set forth in the Trust
Agreement. In 1933, Illinois National Bank and Trust Company (the "Bank"),
501 Seventh Street, P.O. Box 1537, Rockford, Illinois 61110-0037 (AMCORE Bank
N.A., Rockford after 1985) became Trustee of the Trust (the "Trustee") as a
result of the resignation of the original Trustee. AMCORE Bank N.A., Rockford
utilizes AMCORE Trust Company ("Trust Company") to perform its duties as
Trustee. The Trust has no employees but the Trust Company currently employs 97
persons.
The sole assets of the Trust (the "Trust Estate") are the above-mentioned land
and cash. The Bankers Building, a 41 story office building which was completed
in 1927, is situated on the land owned by the Trust. The land is subject to a
99 year lease commencing on June 1, 1926 and expiring on May 31, 2025 (the
"Lease").
The annual rental for the leased property is $275,000 payable in equal
quarterly installments to the Trustee on the first day of March, June,
September and December of each year, plus fees and expenses of the Trustee.
The current Lessee is LaSalle National Bank as Trustee of Trust Number 49371
dated August 25, 1975 (the "Lessee"). The Trustee understands that the
beneficiary of Trust Number 49371 is Bankers Building Realty Co., an Illinois
limited partnership (the "Partnership"). The general partner of the
Partnership is Wexton Building Management. The limited partners of the
Partnership are 105 Partners (an Illinois Partnership), Norman Liebold, and
Gary Felsher. The Trustee has no information regarding either the Partnership
or its general partners.
Beneficial interest in the Trust is divided into 5,000 equal units (the
"Units") which are represented by Bankers Building Land Trust Certificates
(the "Certificates"). Each owner of a Certificate (the "Certificate Holder")
is distributed quarterly a pro rata portion of the rentals, which the Trustee
understands have equaled $55 per unit per year since the inception of the
Trust, except as described in item 11. However, this amount may be reduced by
expenses of the Trustee which are not reimbursed by the Lessee.
2
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Page 3 of 17
Item 2. Properties
The sole asset of the Trust (other than cash) is property consisting of a fee
interest, subject to a 99 year lease entered into on June 1, 1926 and expiring
on May 31, 2025, in the land under the Bankers Building at 105 West Adams
Street, Chicago, Illinois. The land has an area of approximately 22,300
square feet and is located at the southwest corner of Clark and West Adams
Streets in the central business district of the City of Chicago in an area
known as the Loop. The land is improved with a 420,000 square foot 41 story
brick and steel frame commercial office building built in 1926-27 as a
condition of the Lease.
The Lease was recorded in the Cook County deed records on July 12, 1926 with
the original Lessee, Adams Clark Building Corporation, assuming the obligation
to wreck the existing buildings on the premises and construct a new office
building at a cost of not less than $4,650,000. The original lessors were
Ernest M. Jackson and Carrie M. Jackson, who after assigning their interest to
the Trust on July 10, 1926, shortly thereafter sold the Certificates for an
amount which the Trustee understands to have been approximately $1,000 per
Unit. The current Lessee of the trust property is LaSalle National Bank, as
Trustee of Trust Number 49371 dated August 25, 1925, which obtained the
leasehold interest by an Assignment dated August 25, 1975. The Lease provided
for an option to purchase the property for $5,500,000 but the option expired on
June 1, 1976 unexercised. There are no further options outstanding.
Rents of $275,000 per year with no provision for increase (except that interest
of 7% per annum is assessed for late payments) are payable under the Lease
quarterly in advance on the first day of March, June, September and December.
The Lease requires the Lessee to pay all taxes, assessments and other fees and
expenses, incurred in connection with the land or building including reasonable
compensation and expenses of the Trustee that would act to diminish the annual
net income distribution of $275,000 to the Certificate Holders. In addition,
the Lease provides for a trustee of insurance who is responsible for collecting
premiums from the Lessee and purchasing insurance for the Bankers Building.
At the termination of the Lease, the Trust will become the owner of the
building and the property will no longer be subject to any lease. It is
unclear what value, if any, the building might have in the year 2025 when the
Lease expires. It is possible that the building may become unsuitable for
rental purposes prior to the expiration of the Lease. As the Bankers Building
gets older and requires more maintenance or remodeling in order to be suitable
for tenant occupancy, the Lessee or any successor may be unwilling to make the
financial outlays necessary to attract tenants in view of the reversion of the
building to the Trust in the year 2025. Accordingly, the Trust may find it
necessary to sell the property to the Lessee, or to someone who can combine the
Trust's interest in the property and the Lessee's interest in the building into
an economically feasible unit. If such a sale occurs prior to the expiration
of the Lease, there will be a distribution of the sale proceeds to the
Certificate Holders and a termination of the Trust. Presently, the Trustee is
not actively seeking a purchaser of the Trust Estate nor does it anticipate so
doing in the near future.
3
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Page 4 of 17
Item 3. Legal Proceedings
There are no material pending legal proceedings to which the Trustee is a party
or of which the property in the Trust is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the 1995 fiscal year to a
vote of Security Holders.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
The Trustee understands that there is no regular market for the Certificates
but that certain brokers have from time to time handled occasional transactions
in the Certificates. The price for the Units in transactions in which the
Trustee was aware of the sales price was approximately $790.00 to $850.00 in
fiscal year 1995 and $750.00 to $810.00 in fiscal year 1994.
As of May 31, 1995 the number of Certificate Holders of record was 491. (See
Item 1. Business for a description of the distribution to Certificate Holders
of the proceeds payable under the Lease.)
4
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Page 5 of 17
Item 6. Selected Financial Data
This selected financial data should be read in conjunction with the financial
statements and related notes of Bankers Building Land Trust appearing elsewhere
herein.
<TABLE>
<CAPTION>
Year ended May 31,
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating revenues:
Rent $ 275,000 $ 275,000 $ 275,000 $ 275,000 $ 275,000
Servicing fees 7,950 7,950 7,950 7,948 6,950
---------- ---------- ---------- ---------- ----------
Total operating
revenues 282,950 282,950 282,950 282,948 281,950
---------- ---------- ---------- ---------- ----------
Operating expenses:
Trustee fees and
other expenses 7,950 27,950 7,950 7,948 6,950
---------- ---------- ---------- ---------- ----------
Total operating
expenses 7,950 27,950 7,950 7,948 6,950
---------- ---------- ---------- ---------- ----------
Net income $ 275,000 $ 255,000 $ 275,000 $ 275,000 $ 275,000
========== ========== ========== ========== ==========
Distributions to
certificate
holders $ 275,000 $ 255,000 $ 275,000 $ 275,000 $ 275,000
========== ========== ========== ========== ==========
Total assets
at year-end $4,329,335 $4,329,575 $4,329,041 $4,338,619 $4,408,181
========== ========== ========== ========== ==========
</TABLE>
5
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Due to the passive nature of the Registrant's activities, which generally
include only the collection of rent and the disbursements of these proceeds
less expenses to the Certificate Holders of the Registrant, there has been no
material variation in the Registrant's financial condition or results of
operations, during the year ended May 31, 1995.
Item 8. Index to Financial Statements and Schedules
- ------- -------------------------------------------
Pages
Report of Independent Accountants F-1
Financial Statements:
Balance Sheets as of May 31, 1995 and 1994 F-2
Statements of Operations and Retained Earnings
for the years ended May 31, 1995, 1994 and 1993 F-3
Statements of Cash Flows for the years ended
May 31, 1995, 1994 and 1993 F-4
Notes to Financial Statements F-5
All schedules are omitted because they are not applicable, are not required, or
the information is included in the financial statements or footnotes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
6
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Page 7 of 17
PART III
Item 10. Directors and Executive Officers of the Registrant
The Trust has no directors or executive officers. The Trust Company
administers the Trust pursuant to a Trust Agreement which sets out the
responsibilities and duties of the Trustee. Such duties include, but are not
limited to, the following tasks: keeping the register of names of the
Certificate Holders, maintaining records showing receipts and disbursements of
the Trust, collecting rents and distributing income to the Certificate Holders
and other ministerial duties relating to the operation of the Trust. The
self-executing provisions of the Trust Agreement and the 99 year Lease, along
with the passive nature of the Trust, limits the involvement of the Trustee to
the above activities. However, in the event of a default by the Lessee, the
Trustee has the authority to take such action as is necessary and proper for
the best interests of the Trust with respect to managing, leasing, operating,
selling or otherwise disposing of the Trust Estate. The Trustee may in the
event of default terminate the Trust by transferring title to the Certificate
Holders for them to hold as tenants in common. In addition, the Trustee is
empowered upon such default to sell a portion of or the entire Trust Estate and
distribute ratably the net proceeds of such sale after deducting all necessary
expenses of the sale including reasonable compensation for the Trustee. If
the Trust is not terminated by other provisions in the Trust Agreement, the
Trust will terminate 21 years after the death of the last to die of the persons
specified in the Trust Agreement. As of September 1994, the Trustee was aware
of two individuals specified in the Trust Agreement who were still living.
Although not required to do so, the Trustee may in his absolute discretion seek
the advice of the Certificate Holders. If a majority interest of the
Certificate Holders agree on a course of action that is not inconsistent with
express provisions of the Trust Agreement, the Trustee may, but is not
obligated to, effectuate such course of action.
The Bank is chartered as a national bank and, as such, the Bank and the Trust
Company are under the supervision of, and subject to regular examination by,
the Comptroller of the Currency and, in the case of the Trust Company only, the
State of Illinois. In addition, the Bank is subject to the rules and
regulations of the Federal Reserve Board and the Federal Deposit Insurance
Corporation. As of May 31, 1995, the assets and deposits of the Bank were
approximately $1,165,881,000 and $930,861,000, respectively. The Trust Company
had approximately 4,600 accounts and the market value of assets held in
accounts over which the Trust Company exercised investment discretion was
approximately $2,094,102,000 as of May 31, 1995. The Trust Company consists of
97 employees and officers. The principal persons in the Trust Company are:
Roger Reno, Chairman of the Board; Carl J. Dargene, Vice Chairman of the Board;
Glen W. Wilson, President, Chief Executive Officer and Attorney; Lee R. Mayer,
Secretary; Marvin R. Anderson, Senior Vice President and Controller; Jay R.
Maddox, Executive Vice President, Trust Officer and Attorney; Lillie L. Rude,
Executive Vice President and Trust Officer.
7
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Page 8 of 17
Item 11. Executive Compensation
Unless paid by the Lessee, the Trustee is entitled to reasonable compensation
out of the gross rental proceeds payable under the Lease for its services and
management of the Trust and reimbursement for expenses reasonably incurred in
connection with the administration of the Trust. In the event the Trustee
renders extraordinary services to the Trust, it is entitled to additional
reasonable compensation from the same sources. Such amounts are payable from
the gross income or proceeds of the Trust Estate prior to distribution of the
net proceeds to the Certificate Holders. The Lease requires the Lessee to pay
the Trustee its compensation and any amount incurred in connection with the
Trust's administration which would otherwise be payable out of the gross income
of the Trust Estate and would act to reduce the net income of $55 per year per
Unit ($275,000/5,000 Units = $55) that was intended under the Lease for
distribution to the Certificate Holders. The current Trustee is not aware of
any period during which the Certificate Holders were entitled to receive their
distribution of $55 per annum per Certificate and received less than this
amount except for the years ended May 31, 1987 and May 31, 1994. During 1987,
the Trust incurred a $5,000 fee for an appraisal of the land owned by the
Trust. The distribution for 1987 was $54 per Certificate. During 1994, the
Trust incurred a $20,000 legal fee. The distribution for 1994 was $51 per
certificate. Reduced distributions could occur if the Lessee or any successor
defaulted under the Lease and the Trustee was unable to lease or sell the
building and land or if the Lessee or any successor refused to pay or reimburse
the Trustee for expenses of the Trust. As provided in the Lease, the Lessee is
currently reimbursing the Trustee for the costs associated with the reporting
requirements of the Securities Exchange Act of 1934, as amended.
The Lease requires the Lessee to pay rents quarterly in advance. Payment to
the Certificate Holders is not made until the first day of the following
quarter. The Trust Agreement does not obligate the Trustee to pay interest to
the Certificate Holders for the interest earned, if any, during the period in
which the Trustee has receipt of the rents but is not yet obligated to make
distributions to the Certificate Holders. Total trust fees were $7,950 for the
year ended May 31, 1995.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The Registrant is not aware of one party beneficially owning more than 5% of
the Units evidencing ownership in the Trust.
Item 13. Certain Relationships and Related Transactions
See Item 12. above.
8
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Page 9 of 17
PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
(a) See Item 8. Index to Financial Statements and Schedules on Page 6.
(b) See "Exhibit Index" on Page 11.
(c) There have been no reports on Form 8-K during the quarter ending May
31, 1995.
9
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Page 10 of 17
SIGNATURES
Pursuant to the requirements of Date August 21, 1995
---------------
the Securities Exchange Act of Bankers Building Land Trust
(Registrant)
1934, the Registrant has duly AMCORE Bank N.A.,
caused this report to be signed By Rockford, Trustee
------------------
on its behalf by the undersigned, By /s/ Patricia N. Fong
--------------------
Patricia N. Fong,
thereunto duly authorized. Vice President
and Trust Officer
10
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Page 11 of 17
EXHIBIT INDEX
The following exhibits are filed with this Registration Statement:
4.01 Trust Agreement and Declaration of Trust dated June 1, 1926, naming
the National Bank of the Republic of Chicago as Trustee, (previously filed
in paper as Exhibit 1 to the Registrant's Form 10 Registration Statement,
File No. 0-9086, and incorporated herein by reference).
10.01 Indenture of Lease dated June 1, 1926, between Ernest A. Jackson and
Carrie M. Jackson and Adams Clark Building Corporation, (previously filed in
paper as Exhibit 2 to the Registrant's Form 10 Registration Statement, File
No. 0-9086, and incorporated herein by reference).
10.02 Trustee's deed dated June 27, 1933, from the National Bank of the
Republic of Chicago as Trustee, to the Illinois National Bank and Trust
Company, as Trustee, (previously filed in paper as Exhibit 3 to the
Registrant's Form 10 Registration Statement, File No. 0-9086, and
incorporated herein by reference).
11
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I N D E X
-----
Pages
Report of Independent Accountants F-1
Financial Statements:
Balances Sheets F-2
Statements of Operations and Retained Earnings F-3
Statements of Cash Flows F-4
Notes to Financial Statements F-5
<PAGE> 13
Report of Independent Accountants
To the Trustee
Bankers Building Land Trust
Rockford, Illinois
We have audited the accompanying balance sheets of Bankers Building Land Trust
as of May 31, 1995 and 1994, and the related statements of operations and
retained earnings, and cash flows for each of the three years in the period
ended May 31, 1995. These financial statements are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bankers Building Land Trust as
of May 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended May 31, 1995, in conformity
with generally accepted accounting principles.
Rockford, Illinois
June 22, 1995
F-1
<PAGE> 14
BANKERS BUILDING LAND TRUST
BALANCE SHEETS
as of May 31, 1995 and 1994
_______
<TABLE>
<CAPTION>
ASSETS 1995 1994
---- ----
<S> <C> <C>
Cash $ 79,335 $ 79,575
Land subject to operating lease 4,250,000 4,250,000
--------- ---------
Total assets $4,329,335 $4,329,575
========= =========
LIABILITIES and EQUITY
Due to certificate holders $ 73,865 $ 76,081
Advance from lessee 4,970 2,994
--------- ---------
78,835 79,075
Certificates of beneficial interest,
5,000 units issued and outstanding 4,250,000 4,250,000
Retained earnings 500 500
--------- ---------
4,250,500 4,250,500
--------- ---------
Total liabilities and equity $4,329,335 $4,329,575
========= =========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-2
<PAGE> 15
BANKERS BUILDING LAND TRUST
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
for the years ended May 31, 1995, 1994, and 1993
_______
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Operating revenues:
Rent $275,000 $275,000 $275,000
Servicing fees 7,950 7,950 7,950
------- ------- -------
Total operating revenues 282,950 282,950 282,950
Operating expenses:
Trustee fees and other expenses 7,950 27,950 7,950
------- ------- -------
Net income 275,000 255,000 275,000
------- ------- -------
Retained earnings, beginning
of year 500 500 500
Distributions to certificate
holders 275,000 255,000 275,000
------- ------- -------
Retained earnings, end of year $ 500 $ 500 $ 500
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-3
<PAGE> 16
BANKERS BUILDING LAND TRUST
STATEMENTS OF CASH FLOWS
for the years ended May 31, 1995, 1994, and 1993
_______
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $275,000 $255,000 $275,000
Adjustments to reconcile net income
to net cash provided by
operating activities:
Changes in assets and liabilities:
Due to certificate holders (2,216) (586) (6,367)
Advance from lessee 1,976 1,120 (3,211)
------- -------- --------
Net cash provided by
operating activities 274,760 255,534 265,422
------- ------- -------
Cash flows from financing activities:
Distributions to certificate holders (275,000) (255,000) (275,000)
------- ------- -------
Net cash used in financing
activities (275,000) (255,000) (275,000)
------- ------- -------
Net change in cash (240) 534 (9,578)
Cash balance, beginning of year 79,575 79,041 88,619
------- ------- -------
Cash balance, end of year $ 79,335 $ 79,575 $ 79,041
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of the financial statements.
F-4
<PAGE> 17
BANKERS BUILDING LAND TRUST
NOTES TO FINANCIAL STATEMENTS
_______
A. ORGANIZATION AND BUSINESS
Bankers Building Land Trust is a trust organized under the laws of the State
of Illinois which is engaged in the single business activity of holding
title to certain land in Chicago, Illinois, collecting rent from the lease
of said land and disbursing the net proceeds to the holders of beneficial
interest certificates.
B. SIGNIFICANT ACCOUNTING POLICIES
Land Valuations
The land has been valued at its cost to the parties that established the
Trust in 1926 based upon information obtained from the records of the Cook
County Recorder.
C. LEASE
The Trust is the lessor of approximately 22,300 square feet of land located
the southwest corner of Clark and West Adams Street in the central business
district of the City of Chicago. The lease commenced on June 1, 1926 and
expires on May 31, 2025. The annual rental, payable in quarterly
installments for the leased property is $275,000 plus fees and expenses of
the trustee.
The following is a schedule by years of minimum future rentals on the lease
as of May 31, 1995:
<TABLE>
<CAPTION>
Year ending May 31:
<S> <C>
1996 $ 275,000
1997 275,000
1998 275,000
1999 275,000
2000 275,000
Later years 6,875,000
---------
Total minimum future rentals $8,250,000
=========
</TABLE>
D. INCOME TAX STATUS
The Trust is considered a partnership for income tax purposes. The Trust has
been deemed to have made an election out of the partnership's provisions
of the Internal Revenue Code. Therefore, no partnership income tax returns
are filed on behalf of the Trust. Distributions to certificate holders are
taxable to the certificate holders, and reported by means of an information
return. Accordingly, no provision for income taxes has been made in the
financial statements.
E. RECLASSIFICATIONS
Certain items have been reclassified in the 1994 and 1993 financial
statements to be consistent with the presentation of the 1995 financial
statements. There is no impact on retained earnings.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JUN-01-1994
<PERIOD-END> MAY-31-1995
<CASH> 79,335
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,250,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,329,335
<CURRENT-LIABILITIES> 78,835
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,250,500
<TOTAL-LIABILITY-AND-EQUITY> 4,329,335
<SALES> 0
<TOTAL-REVENUES> 282,950
<CGS> 0
<TOTAL-COSTS> 7,950
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 275,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
