<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Quarterly Period Ended MARCH 31, 1997
Commission File Number 2-82090
REAL ESTATE ASSOCIATES LIMITED VI
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3778627
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CA. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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
---- ----
<PAGE> 2
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets,
March 31, 1997 and December 31, 1996 .............................................1
Consolidated Statements of Operations,
Three Months Ended, March 31, 1997 and 1996.......................................2
Consolidated Statement of Partners' Deficiency
Three Months Ended March 31, 1997 ................................................3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 .......................................4
Notes to Consolidated Financial Statements................................................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.......................................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................................................12
Item 6. Exhibits and Reports on Form 8-K..............................................................12
Signatures ............................................................................................13
</TABLE>
<PAGE> 3
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 6,100,502 $ 6,051,522
RENTAL PROPERTY, net of accumulated depreciation
(Notes 1 and 3) 3,114,856 3,158,470
CASH AND CASH EQUIVALENTS (Note 1) 5,857,977 5,849,983
CASH, restricted (Note 1) 37,500 35,750
OTHER ASSETS 190,644 190,643
------------ ------------
TOTAL ASSETS $ 15,301,479 $ 15,286,368
============ ============
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Mortgage notes payable related to properties (Notes 3 and 7) $ 4,886,300 $ 4,886,300
Notes payable and amounts due for partnership
interests (Notes 4 and 7) 5,795,000 5,795,000
Accrued interest payable (Notes 4 and 7) 5,727,083 5,650,383
Accounts payable 71,383 47,372
Other liabilities 35,750 35,750
------------ ------------
16,515,516 16,414,805
------------ ------------
COMMITMENTS AND CONTINGENCIES (Notes 2, 5 and 6)
PARTNERS' DEFICIENCY:
General partners (363,330) (362,474)
Limited partners (850,707) (765,963)
------------ ------------
(1,214,037) (1,128,437)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 15,301,479 $ 15,286,368
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE> 4
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
RENTAL OPERATIONS:
Revenues $ 263,374 $ 440,999
----------- -----------
Expenses:
Operating 129,761 268,437
Depreciation and amortization (Note 1) 43,614 99,430
Interest 121,155 213,735
----------- -----------
294,530 581,602
----------- -----------
LOSS FROM RENTAL OPERATIONS (31,156) (140,603)
----------- -----------
PARTNERSHIP OPERATIONS:
Interest income 63,216 36,205
----------- -----------
Expenses:
Management fees - general partner (Note 3) 125,274 133,872
General and administrative 82,273 103,719
Interest expense 129,913 129,913
----------- -----------
337,460 367,504
----------- -----------
LOSS FROM PARTNERSHIP OPERATIONS (274,244) (331,299)
----------- -----------
GAIN FROM SALE OF RENTAL PROPERTY (Note 1) -- 2,050,417
EQUITY IN INCOME OF LIMITED PARTNERSHIPS AND
AMORTIZATION OF ACQUISITION COSTS 149,000 173,000
DISTRIBUTIONS FROM LIMITED PARTNERSHIPS
RECOGNIZED AS INCOME (Note 2) 70,800 81,302
----------- -----------
NET INCOME (LOSS) $ (85,600) $ 1,832,817
=========== ===========
NET INCOME (LOSS) PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ (5) $ 109
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENT OF PARTNERS' DEFICIENCY
THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
PARTNERSHIP INTERESTS,
March 31, 1997 16,810
===========
DEFICIENCY, January 1, 1997 $ (362,474) $ (765,963) $(1,128,437)
Net loss for the three months
ended March 31, 1997 (856) (84,744) (85,600)
----------- ----------- -----------
DEFICIENCY, March 31, 1997 $ (363,330) $ (850,707) $(1,214,037)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (85,600) $ 1,832,817
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (149,000) (173,000)
Depreciation 43,614 99,430
(Increase) in receivables from limited partnerships -- (30,000)
Decrease (increase) in other assets (1) 261,096
Increase in accrued interest payable 76,700 70,951
Increase in restricted cash (1,750) --
Increase (decrease) in accounts payable 24,011 (115,542)
Decrease in other liabilities -- (97,746)
Gain on sale of rental property -- (2,050,417)
----------- -----------
Net cash used in operating activities (92,026) (202,411)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions to limited partnerships recognized
as a return of capital 100,020 89,850
Proceeds from sale of rental property -- 5,883,245
----------- -----------
Net cash provided by investing activities 100,020 5,973,095
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of mortgages -- (5,052,397)
----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 7,994 718,287
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,849,983 4,895,340
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,857,977 $ 5,613,627
=========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period for interest $ 174,368 $ 272,697
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 7
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the audited
annual financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the annual report
for the year ended December 31, 1996 prepared by Real Estate
Associates Limited VI and Subsidiaries (the "Partnership"). National
Partnership Investments Corp. ("NAPICO") is the corporate general
partner of the Partnership. Accounting measurements at interim dates
inherently involve greater reliance on estimates than at year end.
The results of operations for the interim periods presented are not
necessarily indicative of the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited
financial statements contain all adjustments (consisting primarily
of normal recurring accruals) necessary to present fairly the
financial position of the Partnership at March 31, 1997 and the
results of operations and changes in cash flows for the three months
then ended.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Real
Estate Associates Limited VI and its majority-owned general
partnerships. All significant intercompany accounts and transactions
have been eliminated in consolidation.
METHOD OF ACCOUNTING FOR INVESTMENT IN THE UNCONSOLIDATED LIMITED
PARTNERSHIPS
The investments in unconsolidated limited partnerships are accounted
for on the equity method. Acquisition, selection and other costs
related to the acquisition of the projects are capitalized as part
of the investment account and are being amortized on a straight line
basis over the estimated lives of the underlying assets, which is
generally 30 years.
5
<PAGE> 8
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing
the limited partners' share of net loss by the number of limited
partnership interests outstanding during the year. The number of
limited partnership interests was 16,810 for the periods presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of unrestricted cash and bank
certificates of deposit with maturities of three months or less.
Restricted cash consist of tenants' security and escrow deposits and
mortgage impounds. The Partnership has its cash and cash equivalents
on deposit primarily with one high credit quality financial
institution. Such cash and cash equivalents are in excess of the
FDIC insurance limit.
INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of
the individual partners.
RENTAL PROPERTY AND DEPRECIATION
Rental property is stated at cost. Depreciation is provided on the
straight-line and accelerated methods over the estimated useful
lives of the buildings and equipment. Pursuant to a purchase
agreement in which the Partnership acquired its interest from
withdrawing general partners, certain rental property was revalued
to reflect the purchase price.
Substantially all of the apartment units are leased on a
month-to-month basis.
On February 2, 1996, one of the consolidated general partnerships
(Drexel Park) sold its property for $6,300,000. After payment of
closings costs, the Partnership realized a gain of approximately
$2,000,000 and cash of $830,000.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership adopted Statement of Financial Accounting Standards
No. 121, Account for the Improvement of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of as of January 1, 1996 without a
significant effect on its financial statements. The Partnership
reviews long-lived assets to determine if there has been any
permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be
recoverable. If the sum of the expected future cash flows is less
than the carrying amount of the assets, the Partnership recognizes
an impairment loss.
6
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of March 31, 1997, the Partnership holds limited partnership
interests in 27 local limited partnerships and a general partner
interest in one general partnership. In addition, REAL VI holds a
general partner interest in Real Estate Associates III ("REA III"),
a California general partnership. NAPICO is also a general partner
in REA III. REA III, in turn, holds limited partner interests in
seven local limited partnerships. In total, therefore, the
Partnership holds interests, either directly or indirectly through
REA III, in 34 limited partnerships and one general partnership
which own residential rental projects consisting of 2,832 apartment
units. The mortgage loans of these projects are insured by various
governmental agencies.
The Partnership, as a limited partner, is entitled to between 90
percent and 99 percent of the profits and losses of the limited
partnerships it has invested in directly. The Partnership is also
entitled to 99.9 percent of the profits and losses of REA III. REA
III holds a 99 percent interest in each of the limited partnerships
in which it has invested.
As of March 31, 1997, the Partnership is obligated, if certain
conditions are met, to invest an additional $90,500 in its investee
partnerships at various times in the future. This amount has not
been recorded as a liability in the accompanying financial
statements.
Equity in losses of unconsolidated limited partnerships is
recognized in the financial statements until the limited partnership
investment account is reduced to a zero balance or to a negative
amount equal to further capital contributions required. Losses
incurred after the limited partnership investment account is reduced
to zero are not recognized.
Distributions from the unconsolidated limited partnerships are
accounted for as a return of capital until the investment balance is
reduced to zero. Subsequent distributions received are recognized as
income.
The following is a summary of the investment in unconsolidated
limited partnerships as of March 31, 1997:
<TABLE>
<CAPTION>
<S> <C>
Balance, beginning of period $6,051,522
Equity in income of limited partnerships 154,000
Amortization of acquisition costs (5,000)
Cash distributions recognized as a return of capital (100,020)
----------
Balance, end of period $6,100,502
==========
</TABLE>
The following are unaudited combined estimated statements of
operations for the three months ended March 31, 1997 and 1996 of the
unconsolidated limited partnerships in which the Partnership has
investments:
7
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIP (CONTINUED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Revenues:
Rental and other $ 5,311,000 $ 5,143,000
----------- -----------
Expenses:
Depreciation 899,000 882,000
Interest 2,078,000 1,430,000
Operating expenses 2,803,000 3,446,000
----------- -----------
Total expenses 5,780,000 5,758,000
----------- -----------
Net loss $ (469,000) $ (615,000)
=========== ===========
</TABLE>
NAPICO, or one of its affiliates, is the general partner and
property management agent for certain of the limited partnerships
included above.
NOTE 3 - MORTGAGE NOTE PAYABLE
The mortgage note outstanding at March 31, 1997 had an interest rate
of 8.78 percent per annum, with principal and interest payments due
monthly. The note matures in September 2006.
The note is collateralized by the underlying rental property.
NOTE 4 - NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from
the operating partnership. The purchase of these interests provides
for additional cash payments of approximately $325,000 based upon
specified events as outlined in the purchase agreements. Such
amounts have been recorded as liabilities. In addition, the
Partnership is obligated on non-recourse notes payable of $5,470,000
which bear interest at 9.5 percent and have principal maturities
through December 2012. The notes and related interest are payable
from cash flow generated from operations of the related rented
properties as defined in the notes. These obligations are
collateralized by the Partnership's investments in the limited
partnerships. Unpaid interest is due at maturity of the notes.
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 5 - MANAGEMENT FEES AND EXPENSES DUE TO GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to the corporate general
partner for an annual management fee of approximately .4 percent of
the original invested assets of the limited partnerships. Invested
assets are defined as the costs of acquiring project interests,
including the proportionate amount of the mortgage loans related to
the Partnership's interests in the capital accounts of the
respective partnerships. This fee was approximately $125,000 and
$134,000 for the three months ended March 31, 1997 and 1996,
respectively.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was approximately $11,000 for the three
months ended March 31, 1997 and 1996, and is included in general and
administrative expenses.
NOTE 6 - CONTINGENCIES
The corporate general partner of the Partnership is involved in
various lawsuits and have also been named defendants in other
lawsuits arising from transactions in the ordinary course of
business. In the opinion of management and the corporate general
partner, the claims will not result in any material liability to the
Partnership.
NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure
about Fair Value of Financial Instruments," requires disclosure of
fair value information about financial instruments, when it is
practicable to estimate that value. The mortgage notes payable are
insured by HUD and are collateralized by the rental properties. The
operations generated by the properties and investee limited
partnerships are subject to various government rules, regulations
and restrictions which make it impracticable to estimate the fair
value of the mortgage notes payable and related accrued interest.
The carrying amount of other assets and liabilities reported on the
balance sheets that require such disclosure approximates fair value
due to their short-term maturity.
9
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income
on short term investments and distributions from limited
partnerships in which the Partnership has invested.
The Partnership has committed as of March 31, 1997 to investments in
limited partnerships requiring additional capital contributions of
$90,500. The Partnership normally makes its capital contributions to
the local limited partnerships in stages, over a period of two to
five years, with each contribution due on a specified date, provided
that certain conditions regarding construction or operation of the
project have been fulfilled. The Partnership has no significant
commitments once the capital contributions have been made.
RESULTS OF OPERATIONS
On February 2, 1996, one of the consolidated general partnerships
(Drexel Park) sold its property for $6,300,000. After payment of
closings costs, the Partnership realized a gain of approximately
$2,000,000 and cash of $830,000.
Rental operations consist primarily of rental income and
depreciation expense, debt service, and normal operating expenses to
maintain the properties. Variances in rental operations from the
prior year to the current year relate to the sale of the Drexel
Property.
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not
required for investment in local partnerships.
Operating expenses consist primarily of recurring general and
administrative expenses and professional fees for services rendered
to the Partnership. In addition, an annual Partnership management
fee in an amount equal to .4 percent of invested assets is payable
to the corporate general partner. General and administrative
expenses are higher in 1996 than in 1997 primarily because of
expenditures for litigation regarding a dispute with a local
partnership general partner.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment
balance by its proportionate share of the income or loss of the
local limited partnerships. Losses incurred after the limited
partnership investment account is reduced to zero are not recognized
in accordance with the equity accounting method.
Distributions received from limited partnerships are recognized as
return of capital until the investment balance has been reduced to
zero or to a negative amount equal to future capital contributions
required. Subsequent distributions received are recognized as
income.
10
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Except for certificates of deposit and money market funds, the
Partnership's investments are entirely from interests in other
limited and general partnerships owning government assisted
projects. Funds temporarily not required for such investments in
projects are invested providing interest income as reflected in the
statement of operations. These funds can be converted to cash to
meet obligations as they arise. The Partnership intends to continue
investing available funds in this manner.
11
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1997
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Partnership's general partner is involved in various lawsuits. None of these
lawsuits are related to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of item 7 of
regulation S-K.
12
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED VI
(A LIMITED PARTNERSHIP)
MARCH 31, 1997
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.
REAL ESTATE ASSOCIATES LIMITED VI AND
SUBSIDIARIES (a California limited partnership)
By: National Partnership Investments
Corp., General Partner
Date:
----------------------------------
By:
----------------------------------
Bruce Nelson
President
Date:
----------------------------------
By:
----------------------------------
Shawn Horwitz
Executive Vice President and
Chief Financial Officer
Date:
----------------------------------
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-10-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,895,477
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,086,121
<PP&E> 5,665,419
<DEPRECIATION> 2,550,563
<TOTAL-ASSETS> 15,301,479
<CURRENT-LIABILITIES> 71,383
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,214,037
<TOTAL-LIABILITY-AND-EQUITY> 15,301,479
<SALES> 0
<TOTAL-REVENUES> 546,390
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 380,922
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 251,068
<INCOME-PRETAX> (85,600)
<INCOME-TAX> 0
<INCOME-CONTINUING> (85,600)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (85,600)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
