<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For nine months ended September 30, 1996 Commission File No. 283574
ISRAMCO, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3145265
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
575 Madison Avenue, Suite 1006, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-605-0417
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name, former address and formal fiscal year if changed since last
report)
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 twelve months (or for such shorter period that the
registrant was required to such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---------- -----------
26,691,198 Common Shares were outstanding as of September 30, 1996.
<PAGE> 2
ISRAMCO, INC.
INDEX
PAGE NO.
Part I. Financial Information
Item 1. Financial statements
Consolidated balance sheets:
- September 30, 1996 (unaudited)
- December 31, 1995 1
Consolidated statements of operations:
- Three months ended September 30, 1996 and 1995 (unaudited)
- Nine months ended September 30, 1996 and 1995 (unaudited) 2
Consolidated statements of cash flows:
- Nine months ended September 30, 1996 and 1995 (unaudited) 3
Notes to condensed consolidated financial statements 4-5
Item 2. Management's discussion and analysis of financial statements 6-11
Part II. Other information
Signatures 12
<PAGE> 3
ISRAMCO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
A S S E T S 1996 1995
----------- ------------- ------------
(Unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents ................................ $ 15,268,021 $ 16,506,242
Marketable securities, at market ......................... 7,015,991 5,767,520
Prepaid expenses and other ............................... 558,786 215,588
------------ ------------
Total current assets .............................. 22,842,798 22,489,350
Equipment, less accumulated depreciation .................... 92,962 131,279
Other assets ................................................ 415,000
------------ ------------
T O T A L ......................................... $ 23,350,760 $ 22,620,629
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accrued expenses .................... $ 514,023 $ 358,279
------------ ------------
Shareholders' equity:
Common stock, $.01 par value; authorized
75,000,000 shares; issued 26,691,198
shares at September 30, 1996, and at
December 31, 1995 ..................................... 266,912 266,912
Additional paid-in capital ............................... 25,927,635 25,927,635
Deficit .................................................. (3,193,912) (3,932,197)
Treasury stock; 292,675 shares at
September 30, 1996 and -0- shares at
December 31, 1995 ..................................... (163,898)
------------ ------------
22,836,737 22,262,350
------------ ------------
T O T A L ......................................... $ 23,350,760 $ 22,620,629
============ ============
</TABLE>
See notes to the consolidated financial statements.
- 1 -
<PAGE> 4
ISRAMCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ---------------------------
1996 1995 1996 1995
------ ------ ------ ------
Revenues:
<S> <C> <C> <C> <C>
Operator fees ............................. $ 108,000 $ 101,930 $ 360,252 $ 1,012,700
Interest income ........................... 300,056 265,457 870,465 827,581
Gain (loss) on marketable
securities .............................. (1,038,970) (435,779) 710,042 94,664
Office services to affiliates
and other ............................... 106,571 105,019 359,041 322,306
------------ ------------ ----------- -----------
(524,343) 36,627 2,299,800 2,257,251
------------ ------------ ----------- -----------
Expenses:
Interest expense .......................... 552 1,377 2,545 2,637
-----------
Depreciation .............................. 9,751 10,203 29,813 29,466
Exploration costs ......................... 12,780 9,798 21,982 166,433
Operator expense .......................... 224,228 173,000 568,454 396,906
General and administrative ................ 242,313 187,162 939,763 569,745
Research and development .................. (1,041) 27,634
------------ ------------ ----------- -----------
489,624 381,540 1,561,516 1,192,821
------------ ------------ ----------- -----------
NET INCOME (LOSS) ............................ $ (1,013,967) $ (344,913) $ 738,284 $ 1,064,430
============ ============ =========== ===========
Income (loss) per common share:
Primary and fully diluted ................. $ (.04) $ (.01) $ .03 $ .04
============ ============ =========== ===========
Weighted average number of shares outstanding:
Primary and fully diluted ............... 26,398,523 26,691,198 26,527,171 26,691,198
============ ============ =========== ===========
</TABLE>
See notes to the consolidated financial statements.
- 2 -
<PAGE> 5
ISRAMCO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1996 1995
------------ ------------
Cash flows from operating activities:
<S> <C> <C>
Net income ................................... $ 738,284 $ 1,064,430
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation ............................. 29,813 29,466
Exploration costs ........................ 21,982 166,433
(Gain) on sale of marketable securities .. (710,042) (94,664)
Loss on sale of equipment ................ 6,394 473
Changes in operating assets and
liabilities:
Prepaid and other current assets ..... (343,198) (32,435)
Accounts payable and accrued
expenses ........................... 155,744 (158,379)
Purchase of marketable securities .... (2,851,602) (2,172,112)
Proceeds from sale of marketable
securities ......................... 2,313,173 1,210,260
Increase in other assets ............. (415,000)
------------ ------------
Net cash provided by (used in)
operating activities ............. (1,054,452) 13,472
------------ ------------
Cash flows from investing activities:
Exploration and development costs ............ (21,982) (166,433)
Purchase of equipment ........................ (2,542) (20,531)
Proceeds from sale of equipment .............. 4,653 1,086
------------ ------------
Net cash (used in) investing
activities ....................... (19,871) (185,878)
------------ ------------
Cash flows from financing activities:
Purchase of treasury stock ................... (163,898)
------------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS ..... (1,238,221) (172,406)
Cash and cash equivalents, beginning of period .. 16,506,242 17,339,105
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........ $ 15,268,021 $ 17,166,699
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest ... $ 2,545 $ 2,637
</TABLE>
See notes to the consolidated financial statements.
- 3 -
<PAGE> 6
ISRAMCO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE 1):
As used in these financial statements, the term "Company" refers
to Isramco, Inc. and subsidiaries.
(NOTE 2):
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of only normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the nine-month period
ended September 30, 1996 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto
incorporated by reference in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.
(NOTE 3)- Consolidation:
The consolidated financial statements include the account of the
Company, its direct and indirect wholly owned subsidiaries, Isramco Oil & Gas
Ltd. ("Oil & Gas") and Isramco Underwriters, Ltd., both Israeli companies,
Isramco Resources, Inc., a British Virgin Islands company, and an immaterial
foreign wholly owned subsidiary. All intercompany balances and transactions have
been eliminated. Another wholly owned subsidiary of the Company, Isramco
Management (1988) Ltd., an Israeli company, is not included in the consolidation
because the Company has no voting rights. This entity serves as the nominee for
the unit holders of a limited partnership and has no significant assets or
operations.
(NOTE 4)- Contingencies:
In a Statement of Claim filed in the District Court of Tel-Aviv-Jaffa
on December 1, 1993 (the "Claim"), the Company along with Isramco-Negev 2
Limited Partnership, Isramco Oil and Gas Ltd., Dr. Joseph Elmaleh (former
Chairman of the Board of the Company), East Mediterranean Oil & Gas Limited, The
Trust Company of Kesselman and Kesselman (Trustees 1991) Ltd., Mr. Danny
Toledano (former President of the Company) and others have been named defendants
in a lawsuit commenced by Mr. Chaim Chazan (the "Plaintiff"). In the Statement
of
(continued)
- 4 -
<PAGE> 7
ISRAMCO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE 4)- Contingencies: (continued)
Claim the Plaintiff alleges damages and loss of profits arising out of his
purchase of participation units and warrants pursuant to the fourth and fifth
prospectuses issued by the limited partnership in Israel based on alleged
misleading statements set forth in each prospectus, alleged breach of
obligations contained in each prospectus, alleged misleading current reports
filed with the Israeli Securities Authority and with the Tel Aviv Stock
Exchange, and for activities as underwriters and/or in any other manner. The
dollar amount of the Claim is between $238,000 and $566,000. Plaintiff has
requested that the court recognize the Claim as a class action. If so
recognized, the Plaintiff values the damages and loss of profits to the class to
be between $13,832,000 and $32,880,000.
On September 20, 1995 the Plaintiff filed an application to amend his
application for approval of the Claim as a class action. In the amendment
application, among other things, it was contended that the defendants concealed
from the public information regarding the results of a seismic survey that was
conducted in November 1991 and used such information internally to gain a
profit.
A statement of defense has not been filed by the defendants in this
action. It is the Company's intention to vigorously defend against this claim.
Based on the opinion of counsel, management believes that it is too early in the
proceedings to determine whether any liability will inure to the Company.
(NOTE 5) - Income Taxes:
There is no income tax expense for the nine months ended September 30,
1996 because the deferred tax asset valuation allowance was reduced by
approximately $251,000, primarily for federal income taxes on the income which
would have otherwise been provided for.
- 5 -
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
During the nine month period ending September 30, 1996, the Company invested
mainly in the intensive activity of seismic interpretation and subsurface
mapping, and the evaluation of prospects over the areas of the offshore licenses
and the onshore license. During the second and third quarters of 1996, a
comparative examination of the different prospects was made to determine the
order of priority for the continuation of the exploration program. In the same
period, the Company, as an operator, continued its search for and examination of
the availability of marine drilling rigs for its work plans in the offshore
licenses, and negotiations with the Ministry of National Infrastructures
concerning the modification of the special conditions in the offshore licenses
which detail the conditions for offshore drilling set by the defense
authorities.
During the nine month period ending September 30, 1996, the Company expended
$21,982 in oil and gas explorations compared to $166,433 during the same period
in 1995. The difference is mainly due to the drilling of the Yam West 1 well
offshore which took place during the quarter ending March 31, 1995.
During the three month period ending September 30, 1996, the Company invested
approximately $11,000 examining investment opportunities in oil and gas fields
in the United States.
In the nine month period ended September 30, 1996 the Company had net cash
outflow from purchases and sales of marketable securities of $538,429 as
compared to net cash outflow of $961,852 in the nine month period ending
September 30, 1995. In 1995, the Company acquired 3,027,297 shares of J.O.E.L. -
Jerusalem Oil Exploration Ltd. at a cost of approximately $974,000 (which shares
are traded on the Tel Aviv stock market). During 1996, the Company did not
purchase or sell shares of J.O.E.L. As of September 30, 1996, the Company owned
5.5% of the issued shares of J.O.E.L.
The Company financed its operations during the nine month periods ending
September 30, 1996 and 1995 from its own funds, and did not need to use any
lines of credit or loans. The Company does not presently have any lines of
credit with any institution. The Company believes that it has sufficient funds
to fulfill its present capital requirements.
The expiration date for the Class A and Class B Warrants is April 16, 1997.
Results of Operations
The Company reported a net income of $738,284 ($0.03 per share) in the nine
month period ending September 30, 1996 compared to a net income of $1,064,430
($0.04 per share) in the nine month period ending September 30, 1995. The gain
in the nine month period ending September 30, 1996 is a result of income from
operator's fees, interest, gains from a rise in value of marketable securities
and office services to a related party. Part of the gain is offset by increase
in general and administrative expenses and operator expenses.
- 6 -
<PAGE> 9
In the three month period ending September 30, 1996, the Company reported a net
loss of $1,013,967 ($0.04 per share) compared to a net loss of $344,913 ($0.01
per share) in the same period in 1995. The loss in the three month period ending
September 30, 1996 is mainly as a result of loss from decline in the value of
marketable securities and increase in general and administrative expenses and
operator expenses.
During the nine month period ending September 30, 1996, the Company continued to
participate in work programs in the Negev Med Venture, the Shederot Venture, the
Yam Carveout Venture and the Ashdod Carveout Venture (as of July 1996). The
Company holds a 1.0043% working interest in each of the petroleum assets held by
the various ventures.
Negev Med Venture
Two seismic surveys were carried out and two wells were drilled (the Yam Yafo 1
and the Yam West 1) by the Negev Med Venture since its inception. During 1995
and the beginning of 1996, the activity of seismic interpretation, subsurface
mapping and prospects evaluation have been carried out over the five licenses of
the Venture.
The accumulated data on Authorization for Expenditure (AFEs in the five licenses
of the Venture) is as follows:
<TABLE>
<CAPTION>
Total Accumulated
Expenses from
Inception Date
Expended in of Licenses
License AFE January-Sept. 1996 from May 1, 1993 Company's Share
- ------- --- ------------------ ---------------- ---------------
<S> <C> <C> <C> <C>
Med Tel Aviv $39,217,500 $ 81,633 $38,471,485 $386,369
Med Yavne 25,032,500 197,528 23,569,331 236,707
Med Hasharon 1,514,000 84,748 1,286,344 12,919
Med Hadera 977,500 87,835 772,869 7,762
Med Ashdod 762,000 67,358 759,362 7,626
----------- ----------- ----------- --------
$67,503,500 $ 519,102 $64,859,391 $651,383
</TABLE>
In June 1996, the Petroleum Commissioner at the Ministry of Energy and
Infrastructure extended the duration of the Med Tel Aviv, Med Yavne, Med
Hasharon, Med Hadera and Med Ashdod licenses by an additional four years until
June 15, 2000 pursuant to the following conditions: During the period of the
extension, the Company will have to carry out a seismic survey of at least 500
kilometers. Two wells are required to be drilled in the area of the licenses to
a minimum depth of 9,840 feet. The first well should be spudded no later than
January 1, 1998 and the second one by no later than one year after the first
well. In addition, the Company is required to carry out deepening and retesting
of the Yam 2 well by no later than January 1, 1998. These are the conditions of
the offshore licenses. If the conditions of the licenses are not satisfied the
licenses may terminate.
- 7 -
<PAGE> 10
In June, the Petroleum Commissioner approved the relinquishment of the Negev
Ashquelon license and the change of boundaries of the Med Ashdod license. As a
result of these boundary changes, the Med Ashdod license now includes the area
of the structure on which the Yam 1 and Yam 2 wells were drilled, as well as
another additional structure which was part of the area of the relinquished
Negev Ashquelon license. The participants are in the process of delineating a
carveout within the area of the Med Ashdod license and this carveout will
include all the areas which were transferred from the Negev Ashquelon license as
described above. The Company expects to be entitled to the same royalties in
this carveout as to those which were in the relinquished Negev Ashquelon license
(including the Yam Carveout). The participants' share in the new carveout will
be the same as in the Yam Carveout which was part of the Negev Ashquelon
license.
The Yam Carveout Venture (within the Negev Ashquelon License)
In June 1996, the participants in the Negev 2 Venture relinquished their
interest in the Negev Ashquelon license including the Yam Carveout area and the
operator is in the process of winding down the affairs of the Yam Carveout
Venture. The Company's share was 1.0043%.
Shederot Venture
During the nine month period ending September 30, 1996, the work program in the
Shederot license consisted of reprocessing selected seismic sections,
reinterpretation of the entire seismic data set and remapping prospective
structures. During the nine month period ending September 30, 1996, the Shederot
Venture expended $297,462. The Company's share is 1.0043% or $2,987.
The Ashdod Carveout (within the Med Ashdod License)
In September 1996, the participants in the Med Ashdod license signed an
agreement to create a carveout area within the license in which the exploration
program would be conducted and in which the respective interests of the parties
would be as they were in the Yam Carveout. The parties adopted the Joint
Operating Agreement (J.O.A.) of the Negev 2 Joint Venture dated August 1, 1988,
subject to amendments, adjustments and modifications. According to the J.O.A.,
the Company is the operator and is entitled to an operating fee of 6% of all
gross direct charges, but not less than $6,000 per month. As long as no
exploration activity takes place within the license area but outside the Ashdod
Carveout, no operating fee will be charged under the J.O.A. with respect to the
license area outside the Ashdod Carveout. The participants approved an AFE in
the amount of $105,000. The Company's share is 1.0043% or $1,055.
During the three month period ending September 30, 1996, the Ashdod Carveout
Venture expended $20,604. The Company's share is 1.0043% or $207.
- 8 -
<PAGE> 11
Operator's Fees
In the nine month period ending September 30, 1996, the Company earned $360,000
which was based on the minimum monthly compensation of $42,000 per month until
June 1996 and $36,000 per month as of July 1996. During the nine month period
ending September 30, 1995, the Company earned operator's fees of $670,700 above
the minimum (which was $342,000), primarily from the Yam West 1 well. Based upon
the present work program, the Company believes that the operator's fees from
October - December 1996 will be $36,000 per month ($6,000 x 6 licenses).
Gain on Marketable Securities
In the nine month period ending September 30, 1996, the Company had gains from
marketable securities of $710,042 comprised of $876,552 from unrealized holding
gains and $166,510 from realized losses.
In the three month period ending September 30, 1996, the Company had losses from
marketable securities totalling $1,038,970, comprised of $820,645 from
unrealized holding losses and $218,325 from realized losses. During the nine
month period, the Company had an unrealized holding gain of $923,942 from its
investment in J.O.E.L. - Jerusalem Oil Exploration Ltd. As of November 11, 1996,
that gain decreased by $261,125.
Increase or decrease in the gains or losses from marketable securities are
dependent on the market prices in general and the composition of the portfolio
of the Company.
Exploration Cost
During the nine month period ending September 30, 1996, the primary activity of
the exploration program was seismic interpretation, subsurface mapping and
evaluation of prospects. The Company expended less on oil and gas exploration
than in the previous period in 1995 by $144,451 when the drilling of the Yam
West 1 well took place.
Operator's Expenses
Operator's expenses increased in the nine month period ending September 30,
1996, as compared to the nine month period ending September 30, 1995, primarily
as a result of the termination of certain employees and an expense from foreign
currency exchange. Part of the increase was offset by fewer office expenses and
professional services.
Operator's expenses increased over the three month period ending September 30,
1996 as compared to the same period in 1995 primarily as a result of an increase
in costs related to the termination of one employee. Part of the increase was
offset by fewer office expenses and foreign currency exchange.
- 9 -
<PAGE> 12
General and Administrative Expenses
General and administrative expenses increased during the nine month period
ending September 30, 1996 as compared to the nine month period ending September
30, 1995. Directors' fees, officers' salaries and professional fees during the
nine month period ending September 30, 1996 were more than during the same
period ending September 30, 1995. The expenses during the nine month period
ending September 30, 1995 included tax payments which were higher than the tax
payments in the same period ending September 30, 1996.
General and administrative expenses increased during the three month period
ending September 30, 1996 as compared to the same period in 1995 as a result of
officers' salaries and payments made according to agreements which the Company
entered into with Dr. Joseph Elmaleh and Mr. Danny Toledano. Part of the
increase was offset by less travel expenses and professional fees. In April
1996, Dr. Joseph Elmaleh resigned as Chairman of the Board, Chief Executive
Officer and as a director of the Company. Pursuant to a Termination Agreement,
the Company agreed to pay Dr. Elmaleh $123,750 representing the balance of
unpaid consulting fees, $270,000 in consideration of a covenant not to compete
for a period of three years, and, purchased from Southern Shipping and Energy
Inc., a company which Dr. Elmaleh controls, 292,675 shares of the Company's
common stock for $208,238. In connection with this agreement, the Company
recorded a charge to earnings of approximately $190,000 and $22,500 in the
second and third quarters of 1996, respectively and will take a charge of
$22,500 in each of the following 10 quarters. In June 1996, Mr. Danny Toledano
resigned as the President and Chief Operating Officer of the Company. Pursuant
to a Termination Agreement, the Company terminated its October 1995 Employment
Agreement with Mr. Toledano and paid to Mr. Toledano the sum of $72,000. The
Company also paid to Mr. Toledano $200,000 in consideration of a covenant not to
compete for a period of five years, and entered into a Consulting Agreement with
a company owned by Mr. Toledano for a term of one year and paid the sum of
$72,000 as an advance consulting payment. In connection with these agreements,
the Company recorded a charge to earnings of approximately $72,000 and $28,000,
respectively in the second and third quarters of 1996, respectively and expects
to take a charge of $28,000 in each of the following three quarters and $10,000
in each of the 16 quarters thereafter.
In June 1996, the Company entered into a two year Consulting Agreement with a
company which employs Haim Tsuff, Chairman of the Board and Chief Executive
Officer of the Company, and in August 1996 the Company entered into a three year
Consulting Agreement with Youval Ran, recently elected as President of the
Company. In connection with these agreements, each of the consultants is
entitled to an annual compensation of $144,000, payable in monthly payments of
$12,000 plus reimbursement for all reasonable business expenses incurred by
them.
- 10 -
<PAGE> 13
Description of Current Activity
The current period is being used for completing the seismic data processing,
interpretation and mapping for the onshore Shederot license, and for the
subsequent evaluation of the onshore prospect for drilling which is being
generated.
A budget of $341,000 was approved by the participants of the offshore licenses
for the activities until June 1997.
- 11 -
<PAGE> 14
ISRAMCO, INC.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders held September 30, 1996, the
following directors were elected at the meeting: Daniel Avner, Zvika Livnat,
Yeheskel Nathaniel, Ido Rosen, Natan Schwartz and Haim Tsuff; and approved
the appointment of Richard A. Eisner & Company, LLP as independent auditors
of the Company for 1996.
Item 5. Other Information
J.O.E.L. - Jerusalem Oil Exploration Ltd. has announced in Israel, that
it has agreed to sell its holdings in the Company, approximately 36.5% of
Isramco, Inc. common shares, 2.5 million Class "A" Warrants and 2.5 million
Class "B" Warrants to Naphta Israel Petroleum Company, Ltd. (subsidiary of
J.O.E.L.) for the sum of $10.15 million.
Item 6. Reports on Form 8-K
Form 8-K for the month of August, 1996 dated August 7, 1996.
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 hereunto duly authorized.
ISRAMCO, INC.
--------------------------------------
(Registrant)
Date: November 11, 1996
By:/s/Haim Tsuff
-----------------------------------
(Signature)
Haim Tsuff
Chairman of the Board
and Chief Executive Officer
By:/s/Ido Rosen
-----------------------------------
(Signature)
Ido Rosen
Principal Accounting Officer
- 12 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,268,021
<SECURITIES> 7,015,991
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,842,798
<PP&E> 212,968
<DEPRECIATION> 120,006
<TOTAL-ASSETS> 13,350,760
<CURRENT-LIABILITIES> 514,023
<BONDS> 0
0
0
<COMMON> 266,912
<OTHER-SE> 22,569,825
<TOTAL-LIABILITY-AND-EQUITY> 23,350,760
<SALES> 0
<TOTAL-REVENUES> 2,299,800
<CGS> 0
<TOTAL-COSTS> 568,454
<OTHER-EXPENSES> 993,062
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,545
<INCOME-PRETAX> 738,284
<INCOME-TAX> 0
<INCOME-CONTINUING> 738,284
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 738,284
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
