<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from ______ to ______
Commission file number 1-10324
THE INTERGROUP CORPORATION
- -------------------------------------------------------
(Name of small business issuer as specified in its charter)
DELAWARE
- -------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
13-3293645
- -------------------------------------------
(I.R.S. Employer Identification No.)
2121 Avenue of the Stars, Suite 2020
Los Angeles, California 90067
- -------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (310) 556-1999
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 __
The number of shares outstanding of the issuer's Common Stock, $.01 par value,
as of January 29, 1996 was 834,349 shares.
Transitional Small Business Disclosure Format (check one): YES __ NO X
THE INTERGROUP CORPORATION
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheet
December 31, 1995
Consolidated Statements of Operations
Six Months Ended December 31, 1995 and 1994
Consolidated Statements of Cash Flows
Six Months Ended December 31, 1995 and 1994
Consolidated Statements of Operations
Three Months Ended December 31, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
THE INTERGROUP CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31, 1995
-------------
ASSETS
Investment in real estate, at cost:
Land $4,585,808
Buildings, improvements and equipment 30,431,401
Property held for sale or development 1,564,543
-------------
36,581,752
Less: accumulated depreciation (11,351,659)
-------------
25,230,093
Marketable equity securities, at market value 12,975,373
Other investments 5,397,384
Cash and cash equivalents 27,970
Restricted cash 1,609,733
Rent and other receivables 1,231,191
Prepaid expenses 1,126,214
Other assets 161,125
-------------
Total Assets $47,759,083
=============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $30,793,342
Due to securities broker 5,872,625
Accounts payable and other liabilities 3,319,836
Deferred income taxes 1,896,225
-------------
Total Liabilities 41,882,028
-------------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $.10 par - 100,000 shares authorized;
none issued
Common stock, $.01 par - 1,500,000 shares authorized;
1,494,824 shares issued; 834,349 shares outstanding 14,948
Paid-in capital 12,754,454
Accumulated deficit (1,079,706)
-------------
11,689,696
Add (Less):
Unrealized gain on marketable securities, net of deferred taxes 2,842,131
Treasury stock, at cost, 660,475 shares (7,840,373)
Note receivable - stock options (814,399)
-------------
Total Shareholders' Equity 5,877,055
-------------
Total Liabilities and Shareholders' Equity $47,759,083
=============
The accompanying notes are an integral part of the consolidated
financial statements.
THE INTERGROUP CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended December 31, 1995 1994
--------------------------
Real estate operations:
Rental income $5,545,184 $5,404,109
Rental expenses:
Mortgage interest expense 1,413,053 1,360,383
Property operating expenses 2,629,657 2,696,117
Real estate taxes 424,415 427,137
Depreciation 784,074 904,609
--------------------------
Income from real estate operations 293,985 15,863
--------------------------
Investment transactions:
Investment gains 1,844,855 2,172,694
Investment losses (580,687) (1,052,269)
Dividend and interest income 83,355 31,874
Margin interest and trading expenses (890,785) (311,744)
--------------------------
Income from investment transactions 456,738 840,555
--------------------------
Other income (expense):
General and administrative expenses (591,031) (832,895)
Miscellaneous expense (1,177,086) (1,546)
--------------------------
Other expense (1,768,117) (834,441)
--------------------------
Income (Loss) before provision for income taxes (1,017,394) 21,977
Provision for income tax taxes (benefit) (407,037) 65,688
--------------------------
Net Loss ($610,357) ($43,711)
==========================
Net Loss per share ($0.66) ($0.05)
==========================
Weighted average number of shares outstanding 920,378 866,991
==========================
The accompanying notes are an integral part of the consolidated
financial statements.
THE INTERGROUP CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended December 31, 1995 1994
--------------------------
Cash flows from operating activities:
Net Loss ($610,357) ($43,711)
Adjustments to reconcile net income to cash
provided by (used for) operating activities:
Depreciation of real estate 784,074 904,609
Amortization of other assets 80,419 181,551
Decrease (increase) in receivables, net (991,719) 216,765
Decrease (increase) in prepaid expenses (166,064) 47,946
Decrease (increase) in other assets 2,255 (95,417)
Increase in accounts payable
and other liabilities 942,044 96,205
Increase (decrease) in income taxes 547,934 (164,636)
--------------------------
Net cash provided by operating activities 588,586 1,143,312
--------------------------
Cash flows from investing activities:
Additions to buildings, improvements and equipment (624,028) (777,344)
Investment in real estate (596,841) (4,212,485)
Reduction (investment) in marketable securities 961,490 (5,052,333)
Investment in other investments (1,186,150) (129,325)
--------------------------
Net cash used for investing activities (1,445,529) (10,171,487)
--------------------------
Cash flows from financing activities:
Principal payments on mortgage notes payable (186,498) (155,203)
Proceeds from real estate financing 462,405 1,622,045
Increase in mortgage notes payable due
to real estate acquisition 595,000 3,000,000
Decrease (increase) in restricted cash (49,925) 434,225
Increase (decrease) in due to securities broker (932,461) 6,986,352
Increase (decrease) in accounts payable related to
short positions and other investments 465,814 (2,081,600)
Sale of 16,500 shares of common stock 907,500 0
Purchase of treasury stock (440,213) (60,643)
--------------------------
Net cash provided by financing activities 821,622 9,745,176
--------------------------
Net increase (decrease) in cash and cash equivalents (35,321) 717,001
Cash and cash equivalents at beginning of period 63,291 617,314
--------------------------
Cash and cash equivalents at end of period $27,970 $1,334,315
==========================
The accompanying notes are an integral part of the consolidated
financial statements.
THE INTERGROUP CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended December 31, 1995 1994
--------------------------
Real estate operations:
Rental income $2,767,389 $2,743,995
Rental expenses:
Mortgage interest expense 707,240 724,914
Property operating expenses 1,277,527 1,291,871
Real estate taxes 218,851 240,079
Depreciation 397,719 470,093
--------------------------
Income from real estate operations 166,052 17,038
--------------------------
Investment transactions:
Investment gains 956,926 1,264,831
Investment losses (375,771) (63,755)
Dividend and interest income 31,985 25,589
Margin interest and trading expenses (484,529) (182,801)
--------------------------
Income from investment transactions 128,611 1,043,864
--------------------------
Other income (expense):
General and administrative expenses (290,162) (469,586)
Miscellaneous expense (904,116) (13,864)
--------------------------
Other expense (1,194,278) (483,450)
--------------------------
Income (Loss) before provision for income taxes (899,615) 577,452
Provision for income tax taxes (benefit) (360,398) 271,566
--------------------------
Net Income (Loss) ($539,217) $305,886
==========================
Net Income (Loss) per share ($0.58) $0.35
==========================
Weighted average number of shares outstanding 924,764 866,991
==========================
The accompanying notes are an integral part of the consolidated
financial statements.
THE INTERGROUP CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Six Months Ended December 31, 1995
1. General:
The interim financial information is unaudited; however, in the opinion of The
Intergroup Corporation (the "Company"), the interim financial information
contains all adjustments, including normal recurring adjustments, necessary to
present fairly the results for the interim period. These consolidated
financial statements should be read in conjunction with the Company's June 30,
1995 audited consolidated financial statements and notes thereto.
2. Marketable Equity Securities:
Marketable securities are recorded in accordance with Statement of Financial
Accounting Standards No. 115 (SFAS 115), "Accounting for Certain Investments
in Debt and Equity Securities." All securities are equity securities
classified as available-for-sale except short positions, which represent
obligations of the Company and are classified as trading activity. At
December 31, 1995, the aggregate market value of marketable equity securities
exceeded the aggregate cost by $4,664,997. The net unrealized gain is
comprised of gross unrealized gains of $6,964,127 reduced by gross unrealized
losses of $2,299,130. The net unrealized gain, net of deferred taxes of
$1,822,866, is included as a separate item in shareholders' equity. During
the six months ended December 31, 1995, proceeds from sales of securities were
$21,546,129 and gross realized gains and losses, determined using FIFO costs,
were $1,844,855 and $580,687, respectively. Any unrealized gains or losses
relating to short positions are recognized in earnings in the current period.
There were no naked short positions at December 31, 1995. Dividends on short
positions are recorded on the ex-dividend date.
3. Commitments and Contingencies:
The Company subscribed to purchase shares of a Fund and has made investments
of $665,279. The balance of the subscription price of $334,721 may be called
from time to time by the Fund Manager at any time through April 14, 2001.
In April 1993, a claim was filed in the State Superior Court for the County of
Los Angeles by Dennis Hawk, Lucas Devenn and Golden West Entertainment ("GWE")
against Intergroup, John V. Winfield and GWE. Such action charges Intergroup
and/or John V. Winfield with breach of contract, fraud, conspiracy to defraud,
negligent misrepresentation, assault, battery, economic duress, and breach of
fiduciary duty. Such claim sought damages in excess of $800,000, but after
discovery was completed, were believed by management to expose the Company to
liability in the range of $300,000 to $600,000 exclusive of litigation costs.
Recently, Plaintiffs broadened their damage claims to include lost profits
from 22 motion picture and television projects claimed to be in development.
Intergroup and Mr. John Winfield, in addition to denying Plaintiffs' claims,
have charged Devenn and Hawk with fraud, breach of contract, breach of
fiduciary duty, malpractice as to Hawk who is an attorney, and intentional
infliction of mental distress. The high cost of litigation to defend against
the broadened claims increased the likelihood that the case would be settled
and the Company and the plaintiffs have tentatively agreed, in principle, to
settle the same. Accrued costs of litigation and estimates management believe
will settle the matter aggregated approximately $1,180,000 for the six months
ended December 31, 1995. These costs are reflected in Miscellaneous Expense.
The Company, together in some instances, with certain of its officers, is a
defendant or co-defendant in various legal proceedings (including an
arbitration proceeding with Aura Systems Inc. in which discovery is underway)
involving breach of contract and various other claims incident to the conduct
of its businesses. Management does not expect the Company to suffer any
material liability by reason of such actions.
4. Income Taxes:
The components of the deferred tax liability as of December 31, 1995 are as
follows:
Marketable securities basis differences $1,619,792
Depreciation and fixed asset basis differences 647,210
Minority interests 579,315
Valuation allowance 145,977
-------------
Total deferred tax credits 2,992,294
-------------
NOL and AMT credit carryovers (869,232)
State income taxes (181,641)
Miscellaneous (45,196)
-------------
Total deferred tax debits (1,096,069)
-------------
Net deferred taxes $1,896,225
=============
There was no change in the valuation allowance during the period. The
provision for income taxes is comprised of the following:
Current tax benefit ($2,519,082)
Change in deferred taxes 2,112,045
-------------
Total income tax benefit ($407,037)
=============
Income tax expense differs from the amount computed by multiplying the
statutory federal income tax rate times income (loss) before taxes as follows:
Federal statutory tax ($345,914)
State income taxes, net of federal benefit (51,637)
Other (9,486)
-------------
Total income tax benefit ($407,037)
=============
5. Related Party Transactions:
In March 1986, the Company's president exercised an option to purchase 125,000
shares of common stock in exchange for cash and a note due in March 1996. At
December 31, 1995, the balance of the note receivable, net of unamortized
discount and accrued interest receivable, was $814,399. The note receivable
is reflected as a reduction of shareholders' equity. The Company's president
is the trustee of the Employee Stock Ownership Plan. In his role as trustee,
the president has the power to vote the shares of stock allocated to
participants' accounts when directions are not provided to the trustee on a
timely basis.
THE INTERGROUP CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the Six Months Ended December 31, 1995 vs. 1994
Income from real estate operations for the six months ended December 31, 1995
as compared to the six months ended December 31, 1994, was impacted primarily
by increased revenues and reduced costs achieved through the economies of
scale and added on-site management attention brought about by the change to an
unaffiliated national property management company on April 1, 1995, partially
offset by the costs of closing of the Company's property management division.
Income from real estate operations was also impacted by two offsetting
factors: (i) the transfer by the Company of its Indio, California properties
to the mortgage lender in March 1995 which eliminated the continuing negative
cash flow and depreciation of the Indio properties and (ii) the purchase of a
224-unit property in Irving, Texas in September 1994 resulting in a net
increase in revenues and a net decrease in costs.
Rental income from real estate operations increased by 3% to $5,545,184 from
$5,404,109. The increase was primarily due to the addition of the new Texas
property in September 1994 and an increase in average market rental rates
which together more than offset the loss of rental income from the Indio
properties and the increase in vacancy losses at three properties.
Mortgage interest expense increased 4% to $1,413,053 from $1,360,383 primarily
due to the mortgage interest expense associated with the new Texas property.
Property operating expenses decreased 2% to $2,629,657 from $2,696,117
primarily due to cessation of expenses related to the Indio properties, lower
insurance costs and the closing of the Company's property management division,
partially offset by expenditures associated with the new Texas property and
higher utility expenses.
Real estate taxes decreased 1% to $424,415 from $427,137 primarily due to
reduced taxes on one of the St. Louis properties and elimination of the Indio
properties offset by real estate taxes on the new Texas property and a refund
of taxes on the Harrisburg property received in the quarter ended September
30, 1994.
Depreciation decreased 13% to $784,074 from $904,609 due to the cessation of
depreciation on the Indio properties, offset by depreciation of the new Texas
property and improvements to the other properties.
Investment gains decreased 15% to $1,844,855 from $2,172,694 and investment
losses decreased 45% to $580,687 from $1,052,269 including the recognition of
an unrealized loss of $181,664, related to short sales in the prior period.
Realized investment gains and losses may fluctuate significantly from period
to period, with a meaningful effect on the Company's net earnings. However,
the amount of realized investment gain or loss for any given period has no
predictive value, and variations in amount from period to period have no
practical analytical value, particularly in view of the net unrealized gain in
the Company's overall investment portfolio. Margin interest and trading
expenses increased 186% to $890,785 from $311,744 primarily due to higher
margin loan balances and additional personnel. During the six months ended
December 31, 1995, the market value of the marketable equity securities
portfolio decreased approximately 12% to $12,975,373 from $14,751,444 and net
unrealized gains decreased 15% to $4,664,997 from $5,479,578. As of December
31, 1995, the Company had no naked short positions.
The overall investment portfolio, which includes marketable securities and
other investments, had a positive return of 0.2% for the six months ended
December 31, 1995 and a negative return of 16.6% for the six months ended
December 31, 1994, based on the net realized and unrealized gains and losses
over the monthly average investment balance of the investment portfolio. The
overall investment portfolio achieved a positive average annual compounded
return of 20.9% and 22.0% for the five years ended December 31, 1995 and 1994,
respectively.
General and administrative expenses decreased 29% to $591,031 from $832,895
due to lower aggregate office and travel expenses and fewer personnel.
Miscellaneous expense increased to $1,177,086 from $1,546 due to the accrued
costs of litigation and estimated settlement expenses (See Note 3 to the
financial statements).
During the six months ended December 31, 1995, the Company improved properties
in the aggregate amount of $624,028. Management believes the improvements to
the properties should enhance market values, maintain the competitiveness of
the Company's properties and potentially enable the Company to obtain a higher
yield through higher rents.
For the Three Months Ended December 31, 1995 vs. 1994
Income from real estate operations for the three months ended December 31,
1995 as compared to the three months ended December 31, 1994, was positively
impacted primarily by increased revenues and reduced costs from economies of
scale and added on-site management attention brought by the change to an
unaffiliated national property management company on April 1, 1995, which were
partially offset by the costs of closing of the Company's property management
division. In addition, the transfer by the Company of its Indio, California
properties to the mortgage lender in March 1995 eliminated the continuing
negative cash flow and depreciation of the Indio properties.
Rental income from real estate operations increased by 1% to $2,767,389 from
$2,743,995. The increase was primarily due to an increase in average rental
rates and lease renewals, offset by an increase in vacancy losses at three
properties.
Mortgage interest expense decreased 2% to $707,240 from $724,914 primarily due
to lower loan cost amortization from refinancing of two of the Company's
properties, partially offset by interest on a higher loan balance for the
purchase of land held for development in St. Louis.
Property operating expenses decreased 1% to $1,277,527 from $1,291,871
primarily due to lower insurance, salaries and administrative expenses
partially offset by higher repair and utility expenses.
Real estate taxes decreased 9% to $218,851 from $240,079 primarily due to a
reduction in taxes at one of the St. Louis properties.
Depreciation decreased 15% to $397,719 from $470,093 due to the elimination of
depreciation on the Indio properties, offset by depreciation of improvements
to the other properties.
Investment gains decreased 24% to $956,926 from $1,264,831 and investment
losses increased 489% to $375,771 from $63,755. Margin interest and trading
expenses increased 165% to $484,529 from $182,801 primarily due to higher
margin loan balances and additional personnel.
The overall investment portfolio, which includes marketable securities and
other investments, had a negative return of 16.9% for the three months ended
December 31, 1995 and a negative return of 17.6% for the three months ended
December 31, 1994, based on the net realized and unrealized gains and losses
over the monthly average investment balance of the investment portfolio.
General and administrative expenses decreased 38% to $290,162 from $469,586
due to lower aggregate office and travel expenses and fewer personnel.
Miscellaneous expense increased to $904,116 from $13,864 due to the accrued
costs of litigation and estimated settlement expenses (See Note 3 to the
financial statements).
During the three months ended December 31, 1995, the Company improved
properties in the aggregate amount of $440,531. Management believes the
improvements to the properties should enhance market values, maintain the
competitiveness of the Company's properties and potentially enable the Company
to obtain a higher yield through higher rents.
FINANCIAL CONDITION AND LIQUIDITY
The Company's principal cash flows are generated from its real estate
operations and securities transactions. The Company generated net cash flow
of $588,586 from operating activities, used net cash flow of $1,445,529 for
investing activities and generated net cash flow of $821,622 from financing
activities during the six months ended December 31, 1995.
The Company's total outstanding indebtedness is comprised of mortgages on real
estate which amounted to $30,793,342 as of December 31, 1995. During the six
months ended December 31, 1995, the Company refinanced its Parsippany, NJ
property for $5,325,000 and borrowed $595,000 for the acquisition of the St.
Louis land. Management will pursue additional refinancing activities as
considered necessary or when deemed favorable to the Company.
The Company intends to sell all or a portion of certain of its unimproved
land. Should the Company consummate a sale, all or a portion of the proceeds
may be utilized to provide additional funds for improvements and to take
advantage of other investment opportunities.
The Company subscribed to purchase shares of a Fund and made investments of
$665,279. The balance of the subscription price of $334,721 may be called by
the Fund Manager at any time through April 14, 2001.
For fiscal 1996, management anticipates that its net cash flow from real
estate operations, securities transactions and real estate financing
activities will be sufficient to fund the Company's anticipated acquisitions,
property improvements, debt service requirements and operating expenses.
Management also anticipates that the net cash flow generated from future
operating activities will be sufficient to meet its long-term debt service
requirements.
PART II. OTHER INFORMATION
Item 1:
Material developments in connection with legal proceedings are incorporated
herein by reference to Part I, Note 3 to the Consolidated Financial
Statements, of this Form 10-QSB.
Item 4:
The 1995 Annual Meeting of the Stockholders of the Company was held on
December 5, 1995, at the Park Hyatt Los Angeles Hotel, 2151 Avenue of the
Stars, Century City, California, with the following results: (1) Howard A.
Jaffe and William J. Nance were elected Directors of the Company with a
majority of votes to serve until the 1998 Annual Meeting (John V. Winfield,
Josef A. Grunwald and Mildred Bond Roxborough continue to serve as Directors
of the Company); (2) The ratification of Price Waterhouse as independent
accountants of the Company was passed with a majority of votes; and (3) The
approval of a proposed amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Preferred Stock to 2,500,000
shares, increase the number of authorized shares of Common Stock to 4,000,000
shares and divide the Common Stock into two series consisting of 1,500,000
shares of Class A Common Stock and 2,500,000 shares of Class B Common Stock
was passed with a majority of votes. The Class A Common Stock and the Class B
Common Stock would have identical rights, preferences and privileges, except
that the Class B Common Stock would have one-tenth of a vote per share. The
amendment becomes effective only upon filing with the Delaware Secretary of
State, and the Board of Directors reserves the right to determine not to file
the amendment. The amendment has not been filed to date. A tabulation of
votes follows:
Proposal (1) - Directors: Votes For Against Abstained Unvoted
Howard A. Jaffe 778,155 6,912
William J. Nance 778,048 7,019
Proposal (2) - Accountants:
Price Waterhouse 780,562 2,631 1,874
Proposal (3) - Amendment
to Certificate of
Incorporation 470,089 17,133 5,444 292,401
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
THE INTERGROUP CORPORATION
(Registrant)
Date: January 29, 1996
By /s/ John V. Winfield
- -------------------------------------------------------------------
John V. Winfield, Chairman;
President and Chief Executive Officer
Date: January 29, 1996
By /s/ Howard A. Jaffe
- -------------------------------------------------------------------
Howard A. Jaffe
Chief Operating Officer and Secretary
Date: January 29, 1996
By /s/ Gregory C. McPherson
- -------------------------------------------------------------------
Gregory C. McPherson
Executive Vice President and Assistant Secretary
Date: January 29, 1996
By /s/ Keith R. Schrupp
- -------------------------------------------------------------------
Keith R. Schrupp
Vice President of Finance
Date: January 29, 1996
By /s/ David C. Gonzalez
- -------------------------------------------------------------------
David C. Gonzalez
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-QSB FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 27,970
<SECURITIES> 12,975,373
<RECEIVABLES> 1,231,191
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,528,990
<PP&E> 36,581,752
<DEPRECIATION> 11,351,659
<TOTAL-ASSETS> 47,759,083
<CURRENT-LIABILITIES> 11,088,686
<BONDS> 30,793,342
<COMMON> 14,948
0
0
<OTHER-SE> (24,916,287)
<TOTAL-LIABILITY-AND-EQUITY> 47,759,083
<SALES> 0
<TOTAL-REVENUES> 7,473,394
<CGS> 0
<TOTAL-COSTS> 5,309,618
<OTHER-EXPENSES> 1,768,117
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,413,053
<INCOME-PRETAX> (1,017,394)
<INCOME-TAX> (407,037)
<INCOME-CONTINUING> (610,357)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (610,357)
<EPS-PRIMARY> (0.66)
<EPS-DILUTED> (0.66)
</TABLE>
