<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-13754
NOONEY REALTY TRUST, INC.
-------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-1339136
------------------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
------------------------------------------- ----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
-------------------------------------------------------------------------------
Former name, former address and former 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 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subjcet to such
filing requirements for the past 90 days. Yes [X] No [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confimred by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date. As of March 31, 1991 there were 866,624 shares of the
Registrant's common stock, par value $1 per share, issued and outstanding.
Page 1 of 15 Pages
<PAGE> 2
PART I
Item 1 - Financial Statements:
<TABLE>
NOONEY REALTY TRUST, INC.
-------------------------
(A REAL ESTATE INVESTMENT TRUST)
--------------------------------
BALANCE SHEETS
--------------
<CAPTION>
June 30, December,
1995 1994
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS:
Cash and short-term investments $ 558,722 $ 601,604
Accounts receivable 263,920 277,065
Prepaid and deferred expenses 7,369 36,609
Investment property, at cost:
Land and improvements 2,568,955 2,568,955
Buildings 17,504,042 17,381,201
------------ ------------
20,072,997 19,950,156
Less accumulated depreciation 5,036,872 4,730,872
------------ ------------
15,036,125 15,219,284
Deferred expenses-at amortized cost 385,187 369,506
------------ ------------
$16,251,323 $16,504,068
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 341,635 $ 372,132
Mortgage notes payable 4,951,004 4,988,006
Refundable tenant deposits 48,129 45,004
------------ ------------
Total liabilities 5,340,768 5,405,142
(Continued)
<PAGE> 3
Shareholders' Equity:
Common Stock, $1 par value;
Authorized, 5,000,000 shares;
Issued and outstanding,
866,624 in 1995 and 1994 866,624 866,624
Additional paid-in capital 14,252,532 14,252,532
Distributions in excess of net income (4,208,601) (4,020,230)
------------ ------------
10,910,555 11,098,926
------------ ------------
$16,251,323 $16,504,068
============ ============
</TABLE>
<PAGE> 4
<TABLE>
NOONEY REAL REALTY TRUST, INC.
------------------------------
(A REAL ESTATE INVESTMENT TRUST)
--------------------------------
STATEMENTS OF OPERATIONS
------------------------
(UNAUDITED)
-----------
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income $711,821 $674,613 $1,408,543 $1,367,950
Interest 1,088 3,668 2,202 5,282
-------- -------- ---------- ----------
712,909 678,281 1,410,745 1,373,232
EXPENSES:
Interest 104,233 114,462 208,854 229,374
Depreciation and amortization 180,252 169,108 359,851 350,135
Real estate taxes 128,265 104,589 255,387 231,835
Advisory Fee 29,062 29,227 58,024 57,747
Property management fees paid
to Nooney Krombach Company 26,378 24,983 52,302 50,840
Operating expenses 209,858 216,638 404,709 411,878
-------- -------- ---------- ----------
678,048 659,007 1,339,127 1,331,809
-------- -------- ---------- ----------
EARNINGS FROM OPERATIONS $ 34,861 $ 19,274 $ 71,618 $ 41,423
======== ======== ========== ==========
EARNINGS PER SHARE $ 0.04 $ 0.02 $ 0.08 $ 0.05
======== ======== ========== ==========
</TABLE>
<PAGE> 5
<TABLE>
NOONEY REALTY TRUST, INC.
-------------------------
(A REAL ESTATE INVESTMENT TRUST)
--------------------------------
STATEMENT OF SHAREHOLDERS' EQUITY
---------------------------------
SIX MONTHS ENDED JUNE 30, 1995
------------------------------
(UNAUDITED)
-----------
<CAPTION>
COMMON STOCK
----------------------
ADDITIONAL DISTRIBUTION
NUMBER OF PAID-IN IN EXCESS OF
SHARES AMOUNT CAPITAL NET INCOME
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance, January 1, 1995 866,624 $866,624 $14,252,532 $(4,020,230)
Earnings from Operations 71,618
Distributions to Shareholders (259,989)
---------- ---------- ------------ ------------
Balance, June 30, 1995 866,624 $866,624 $14,252,532 $(4,208,601)
========== ========== ============ ============
</TABLE>
<PAGE> 6
<TABLE>
NOONEY REALTY TRUST, INC.
-------------------------
(A REAL ESTATE INVESTMENT TRUST)
--------------------------------
STATEMENTS OF CASH FLOWS
------------------------
(UNAUDITED)
-----------
<CAPTION>
Three Months Ended Six Months Ended
---------------------- ----------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Earnings from operations $ 34,861 $ 19,274 $ 71,618 $ 41,423
Adjustments to reconcile earnings from operations to
net cash used in operating activities:
Depreciation and amortization 180,252 169,108 359,851 350,135
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable (43,950) (2,472) 13,145 (41,012)
Decrease (Increase) in prepaid expenses 93,447 (147,942) 29,240 (241,101)
Increase in deferred assets (17,280) 0 (69,533) 0
Increase (Decrease) in accounts payable
and accrued expenses 11,549 (109,090) (30,497) (121,035)
Increase in refundable tenant deposits 3,125 4,582 3,125 4,082
---------- ---------- ---------- ----------
Total Adjustments 227,143 (85,814) 305,331 (48,931)
---------- ---------- ---------- ----------
Net cash provided by operating activities 262,004 (66,540) 376,949 (7,508)
CASH FLOWS USED IN INVESTING ACTIVITIES
Adjustments to investment property (41,796) (43,460) (122,841) (50,326)
---------- ---------- ---------- ----------
Net cash used in investing activities (41,796) (43,460) (122,841) (50,326)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Cash distributions to shareholders (129,994) (103,995) (259,988) (190,987)
Payments on mortgage notes payable (18,695) (19,062) (37,002) (31,522)
---------- ---------- ---------- ----------
Net cash used in financing activities (148,689) (123,057) (296,990) (222,509)
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 71,519 (233,057) (42,882) (280,343)
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS
Beginning of period 487,203 625,277 601,604 672,563
---------- ---------- ---------- ----------
(Continued)
<PAGE> 7
CASH AND CASH EQUIVALENTS
End of period $ 558,722 $ 392,220 $ 558,722 $ 392,220
========== ========== ========== ==========
</TABLE>
<PAGE> 8
NOONEY REALTY TRUST, INC.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
NOTE A:
Refer to the Registrant's financial statements for the year ended December 31,
1994, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without
change. Also, refer to the footnotes to those statements for additional
details of the Registrant's financial condition. The details in those notes
have not changed except as a result of normal transactions in the interim or as
noted below.
NOTE B:
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at June 30, 1995 and for all periods
presented have been made.
NOTE C:
The Registrant has employed Nooney Advisors, Ltd., a Missouri limited
partnership, to serve as the Registrant's investment and financial counselor
and to supervise the day-to-day operations of the Registrant. Certain General
Partners of Nooney Advisors, Ltd. are also officers and directors of the
Registrant. Advisory fees of $29,062 and $58,024 were paid to Nooney
Advisors, Ltd. for the three and six months ended June 30, 1995. Advisory fees
of $29,227 and $57,747 were paid to Nooney Advisors, Ltd. for the three and six
months ended June 30, 1994.
The Registrant's properties are managed by Nooney Krombach Company, a wholly
owned subsidiary of Nooney Company. Certain officers and directors of the
Registrant are also officers and directors of Nooney Company or one of its
subsidiaries.
NOTE D:
The earnings per share for the three and six months ended June 30, 1995 and
1994 has been computed based on 866,624 shares, the number outstanding during
the periods.
<PAGE> 9
ITEM: 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of June 30, 1995 is $558,722, a decrease of $42,882 from
year-end December 31, 1994. The decrease in cash can be attributable to
capital expenditures for tenant leasing and buildout. Furthermore, the
decrease in cash does not affect the Trust's opinion on the properties' ability
to provide adequate cash flow from operations to fund anticipated capital
expenditures for the remainder of 1995. The anticipated capital expenditures
by property are as follows:
<TABLE>
<CAPTION>
Other Leasing
Capital Capital Total
-------- -------- --------
<S> <C> <C> <C>
Atrium at Alpha $ 12,000 $ 41,000 $ 53,000
Franklin Park Dist. Center 100,000 0 100,000
Applied Communications Bldg. 0 0 0
-------- -------- --------
$112,000 $ 41,000 $153,000
</TABLE>
During the remainder of 1995, approximately $153,000 of capital
expenditures are expected. Atrium at Alpha leasing capital includes floor plan
changes to accommodate tenant's needs, new carpeting and new paint and/or
wallcovering. Along with leasing capital, Atrium at Alpha has set aside funds
to purchase and install a new compressor if necessary. With the renewal of the
first mortgage loan in the last quarter of 1994, the property is scheduled to
repair the brickwork on the outside of the building. Capital expenditures at
Applied Communications Building are expected to be minimal.
In November 1994 the Trust successfully negotiated the renewal of the first
mortgage debt for a term of seven years. The mortgage lender committed to a $5
million loan at a fixed rate of 8.4% and an amortized period of 23 years.
<PAGE> 10
Results of Operations
The results of operations for the Trust's properties for the quarters ended
June 30, 1995, 1994 and 1993 are detailed in the schedule below. The
information contained in the schedule excludes all partnership expenses. Net
operating cash income (NOCI) represents rental revenue less operating expenses,
excluding depreciation and amortization, less debt service.
<TABLE>
<CAPTION>
Atrium at Franklin Park Applied
Alpha Distr. Center Comm. Bldg.
------------- ------------- -------------
<S> <C> <C> <C>
1995
----
Net Operating Cash Income $120,000 $ 87,000 $ 78,000
Capital Expenditures 31,000 0 0
Tenant Alterations 11,000 0 0
Lease Commissions 13,000 0 0
------------- ------------- -------------
Net Property Cash Flow $ 65,000 $ 87,000 $ 78,000
============= ============= =============
1994
----
Net Operating Cash Income $ 83,000 $ 60,000 $ 20,000
Capital Expenditures 0 0 0
Tenant Alterations 43,000 0 0
Lease Commissions 7,000 0 0
------------- ------------- -------------
Net Property Cash Flow $ 33,000 $ 60,000 $ 20,000
============= ============= =============
1993
----
Net Operating Cash Income $ 85,000 $ 58,000 $ 20,000
Capital Expenditures 0 0 0
Tenant Alterations 0 0 0
Lease Commissions 1,000 0 150,000
------------- ------------- -------------
Net Property Cash Flow $ 84,000 $ 58,000 $(130,000)
============= ============= =============
</TABLE>
<PAGE> 11
The occupancy levels at the Trust's properties during the second quarter
remain at a high level. These high levels can be attributable to the Trust's
ability to renew the properties' major tenants as their leases mature. The
occupancy levels at June 30 are as follows:
<TABLE>
<CAPTION>
PROPERTY 1995 1994 1993
------------------------------------------------------- ------ ------ ------
<S> <C> <C> <C>
Atrium at Alpha 95% 82% 88%
Franklin Park Dist. Center 100% 100% 100%
Applied Communications Bldg. 100% 100% 100%
</TABLE>
Franklin Park Distribution Center currently is fully leased by two tenants.
The larger of the two tenants occupies 57% of the building while the other
occupies 43% of the building. The leases expire in December 1999 and June
1998, respectively.
The Applied Communications Building has a single tenant who occupies the
entire building. The tenant's lease expires in August 1999.
During the second quarter the occupancy level at Atrium at Alpha increased
from the previous quarter through the net leasing of 1,170 square feet. New
leases accounted for 1,845 square feet while only a single tenant moved out
vacating 675 square feet. The Trust renewed four existing tenant leases
totaling approximately 7,540 square feet. The rental rates for the new leases
and the renewals increased approximately 12.50%. The property has two major
tenants which lease 23% and 17% of the available space with leases expiring in
May 1999 and July 1996, respectively.
1995 Comparisons
As of June 30, 1995, the Trust's consolidated revenues are $712,909 for the
quarter ended and $1,410,745 for the six month period ended. The revenues have
increased approximately 2.73% over the same period ended June 30, 1994.
The increase in consolidated revenues of approximately 2.73% or $37,513 is
attributable to all three properties. Franklin Park Distribution Center,
Applied Communications Building and Atrium at Alpha had increases of
approximately 6.50%, 2.50% and 1.50%, respectively. Offsetting the property
gains was a minimal decrease in interest income. The increase in revenues can
be attributable to increases in rental income from all the properties offset by
decreases in escalation and common area maintenance income. For the six month
period June 30, 1995 and June 30, 1994 the Trust had rental income of
$1,192,868 and $1,094,688, respectively. For the same period escalation and
common area maintenance income was $16,195 and $78,649, respectively. The
increase in rental income relates to the Trust's ability to renew leases at
higher rates and obtain new tenants for the unoccupied space at Atrium at
Alpha. The decrease in escalation and common area maintenance income can be
attributable to Atrium at Alpha. At Atrium at Alpha, the operating expenses
decreased from 1993 to 1994 approximately 4% resulting in actual expenses being
lower than the tenant's base years for 1994. Therefore, in 1995 the Trust
<PAGE> 12
has estimated that the expense levels will remain below the tenant's base years
resulting in minimal escalation income for 1995.
At Franklin Park Distribution Center revenues for the quarter ended and six
month period ended June 30, 1995 was $185,843 and $370,594, respectively
compared to $173,618 and $348,956 for the three month and six month period
ended June 30, 1994. With the renewal of a major tenant effective January 1,
1995, the property was able to increase the rental revenues through an increase
in the major tenant's base rent. The remainder of the revenue increase relates
to the recovery of real estate taxes. As real estate taxes increase, the Trust
has the ability to directly pass through any increases to the tenancy of the
property.
Revenues at the Applied Communications Building increased at approximately
the same rate as the consolidated revenues. The property's revenues for the
three month period ended June 30, 1995 and 1994 were $252,168 and $247,388,
respectively. For the six month period ended June 30, 1995 and 1994 property
revenues were $499,277 and $487,264, respectively. The increase in revenues
relates to an increase in the tenant's base rent of $.35 per square foot
effective January 1, 1995. In addition, the tenant commenced the payment of
operating expense pass through. Offsetting the $20,908 increase in revenues is
a decrease in utility reimbursment of $8,895. The decrease in utility
reimbursement is in direct correlation with a similar decrease in utility
expense.
At Atrium at Alpha revenues for the quarter ended and six month period
ended June 30, 1995 was $267,916 and $530,333, respectively compared to
$246,976 and $522,028 for the three month and six month period ended June 30,
1994. For the quarter ended and six month period ended the property had
increases in rental income of $40,572 and $76,743, respectively, when compared
to the same periods ended June 30, 1994. The increases are due to an increase
in occupancy and increasing rental rates. To offset the rental income
increases was a significant decrease in escalation income. The decrease in
escalation is a result of an operating expense decreased from 1993 to 1994
approximately 4%. The decrease caused the actual expenses to be lower than the
tenant's base years for 1994. Therefore, in 1995 the Trust estimated that the
expense levels will remain below the tenant's base years resulting in minimal
escalation income for 1995.
As of June 30, 1995, the Trust's consolidated expenses excluding
depreciation, amortization and interest for the quarter ended June 30, 1995 is
$393,563 and for the six month period ended the expenses are $770,422. For the
quarter ended and six month period ended June 30, 1994 the expenses were
$375,437 and $752,300, respectively. The expenses have increased approximately
4.8% when comparing quarter ended June 30, 1995 to 1994. However, when
comparing the six month period ending June 30, 1995 to 1994 expenses increased
at a rate of 2.4%.
The increase in consolidated expenses excluding depreciation, amortization
and interest during the second quarter of 1995 relates partly to real estate
tax expense at Franklin Park Distribution Center and Atrium at Alpha. For the
quarter ended 1995 and 1994 the real estate tax expense was $99,321 and
$75,503, respectively. The real estate tax increase is due to property value
reassessment and an increase in tax rates. Offsetting the increase in
consolidated real estate tax expense was a decline in operating expenses. The
decline in operating expenses is attributable to several costs at the three
properties and the Trust which will be explained in the following paragraphs.
<PAGE> 13
For the quarter ended and six month period ended June 30, 1995 the
operating expenses are $209,858 and $404,709, respectively, compared to
$216,638 and $411,878 for the quarter ended and six month period ended June 30,
1994. The decreases of $6,780 and $7,169 for the quarter and six month period
ended are outlined by property and expense category in the following schedule.
Decreases are bracketed.
<TABLE>
<CAPTION>
Franklin Applied
Park Dist. Comm. Atrium at
Center Building Alpha Trust
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Fire & Crime Prevention 1,711 ---------- ---------- ----------
Insurance 336 1,980
Common Area ---------- ---------- (6,580) ----------
Supplies-Cleaning ---------- ---------- 1,358 ----------
Parking Lot Expenses ---------- (7,653) 2,208 ----------
Payroll (659) 991 (1,212) ----------
Professional Services ---------- (1,500) (3,283) 9,582
Repairs & Maintenance 1,175 (2,726) 1,025 ----------
Electric ---------- (10,901) 6,524 ----------
Fuel - Steam or Gas ---------- (1,462) 2,888 ----------
Snow Removal ---------- (416) (732) ----------
Property Totals 2,563 (23,667) 2,196 11,562
Other Expenses 177
Consolidated Total (7,169)
</TABLE>
As presented on the financial statements for the six month period ended
June 30, 1995, the decrease in other operating expenses is $7,169.
Interest expense decreased $10,229 and $20,520 for the quarter ended and
six month period ended June 30, 1995 when compared to the same period ended
June 30, 1994. The decrease in interest expense is caused by the November 1994
refinancing of the first mortgage debt at a lower rate of interest.
1994 Comparisons
The Trust had gross revenues of $678,281 for the quarter ended June 30,
1994. The Trust generated net income of $19,274 or $.02 per share, for the
quarter ended June 30, 1994. Funds from operations, which represents net
income (computed in accordance with generally accepted accounting principles),
plus depreciation and amortization, was $188,382 or $.22 per share. In
addition, principal payments on notes payable were $19,062. Total dividends
paid during the quarter amounted to $103,995 or $.12 per share.
On a consolidated basis, total revenues for the quarter decreased 4%
compared to the second quarter of 1993 primarily due to lower expense
recoveries at Atrium at Alpha partially offset by higher revenues at the
Applied Communications Building due to an annual 3% increase in base rent.
<PAGE> 14
On a consolidated basis, total expenses decreased due to lower depreciation
and amortization related to an accounting adjustment in the second quarter of
1993 as well as lower real estate taxes at Atrium at Alpha.
1993 Comparisons
The Trust had gross revenues of $704,804 for the quarter ended June 30,
1992. The Trust generated net income of $5,256 or $.01 per share, for the
quarter ended June 30, 1993. Funds from operations, which represents net
income (computed in accordance with Generally Accepted Accounting Principles),
plus depreciation and amortization, was $188,433 or $.22 per share. Total
dividends paid during the quarter amounted to $86,662 or $.10 per share.
On a consolidated basis, total revenues for the quarter decreased 4%
compared to the second quarter of 1992 primarily due to revenues at the Applied
Communications Building due to the renewal of the single tenant described
above. Revenues at the Atrium Alpha Business Center increased due to higher
occupancy. Revenues at Franklin Park increased to a scheduled rent increase
with one of the major tenants.
On a consolidated basis, total expenses for the quarter increased 2% as a
result of higher depreciation and amortization resulting from capital
expenditures, higher utility and maintenance expense at the Atrium at Alpha
Business Center offset by lower real estate taxes at that property.
Inflation
The effects of inflation did not have a material impact upon the Trust's
operation in fiscal 1994 and are not expected to have a material impact in
1995.
<PAGE> 15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule (provided for the information of
the Securities and Exchange Commission only)
(b) Reports on Form 8-K
None
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.
NOONEY REALTY TRUST, INC.
Dated: August __, 1995 By: /s/ Gregory J. Nooney, Jr.
-------------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
/s/ Patricia A. Nooney
-------------------------------------
Patricia A. Nooney
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REALTY TRUST, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000748580
<NAME> NOONEY REALTY TRUST, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 487,203
<SECURITIES> 0
<RECEIVABLES> 219,970
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 707,173
<PP&E> 20,031,201
<DEPRECIATION> 4,883,553
<TOTAL-ASSETS> 16,350,478
<CURRENT-LIABILITIES> 375,090
<BONDS> 4,969,699
<COMMON> 866,624
0
0
<OTHER-SE> 10,139,065
<TOTAL-LIABILITY-AND-EQUITY> 16,350,478
<SALES> 697,836
<TOTAL-REVENUES> 697,836
<CGS> 556,458
<TOTAL-COSTS> 556,458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,621
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 365,757
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
