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 quarterly period ended September 25, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - ------- EXCHANGE ACT OF 1934
Commission File Number 0-14941
CAMBRIDGE ADVANTAGED
PROPERTIES II LIMITED PARTNERSHIP
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3330195
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
<PAGE>
PART I
Item 1. Financial Statements
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 25, March 25,
1998 1998
------------- ---------
<S> <C> <C>
ASSETS
Property and equipment - net of
accumulated depreciation of
$45,238,068 and $43,665,440,
respectively $69,310,531 $70,875,621
Cash and cash equivalents 843,956 1,011,604
Cash - restricted for tenants'
security deposits 651,521 563,247
Mortgage escrow deposits 2,199,752 1,815,521
Deferred costs, net of accumulated
amortization of and $1,080,789 and
$983,592, respectively 2,075,546 2,142,743
Prepaid expenses and other assets 531,353 432,170
----------- -----------
Total assets $75,612,659 $76,840,906
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
Liabilities
Mortgage notes payable $90,941,430 $91,209,333
Accounts payable, accrued
expenses and other liabilities 6,747,056 6,179,587
Tenants' security deposits payable 651,521 563,247
Due to general partners of
subsidiaries and their affiliates 1,396,896 1,631,151
Due to general partners and
affiliates 5,261,063 4,660,761
----------- -----------
Total liabilities 104,997,966 104,244,079
----------- -----------
Minority interest 4,838,071 4,911,145
----------- -----------
Commitments and contingencies
(Note 3)
Partners' deficit:
Limited partners (33,563,597) (31,673,628)
General partners (659,781) (640,690)
----------- -----------
Total partners' deficit (34,223,378) (32,314,318)
----------- -----------
Total liabilities and partners'
deficit $75,612,659 $76,840,906
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 25, September 25,
-------------------------- --------------------------
1998 1997* 1998 1997*
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Revenues
Rentals, net $ 4,138,835 $ 4,197,182 $ 8,178,400 $ 8,466,829
Other 216,145 189,257 370,999 378,447
----------- ----------- ----------- -----------
Total revenues 4,354,980 4,386,439 8,549,399 8,845,276
----------- ----------- ----------- -----------
Expenses
Administrative and
management 791,516 792,302 1,525,633 1,477,867
Administrative and
management-
related parties
(Note 2) 395,629 408,964 762,164 832,333
Operating 344,686 342,808 663,131 696,813
Repairs and
maintenance 846,283 610,481 1,386,565 1,135,318
Taxes and
insurance 476,252 527,854 952,641 1,033,697
Interest 1,773,813 1,959,502 3,524,459 3,827,064
Depreciation and
amortization 834,902 871,999 1,669,825 1,744,129
----------- ----------- ----------- -----------
Total expenses 5,463,081 5,513,910 10,484,418 10,747,221
----------- ----------- ----------- -----------
Loss before
minority interest (1,108,101) (1,127,471) (1,935,019) (1,901,945)
Minority interest in
loss of subsidiaries 14,134 16,496 25,959 27,648
----------- ----------- ----------- -----------
Net Loss $(1,093,967) $(1,110,975) $(1,909,060) $(1,874,297)
=========== =========== =========== ===========
</TABLE>
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Deficit
(Unaudited)
<TABLE>
<CAPTION>
Limited General
Total Partners Partners
--------------------------------------------------
<S> <C> <C> <C>
Balance-
March 26, 1998 $(32,314,318) $(31,673,628) $(640,690)
Net loss - six
months ended
September 25, 1998 (1,909,060) (1,889,969) (19,091)
------------ ------------ ---------
Balance-
September 25, 1998 $(34,223,378) $(33,563,597) $(659,781)
============ ============ =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Decrease) Increase in Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 25,
-----------------------------
1998 1997*
-----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,909,060) $(1,874,297)
----------- -----------
Adjustments to reconcile
net loss to net cash provided by
operating activities:
Depreciation and amortization 1,669,825 1,744,129
Minority interest in loss of
subsidiaries (25,959) (27,648)
Increase in cash-restricted
for tenants' security deposits (88,274) (32,077)
Increase in mortgage
escrow deposits (384,231) (45,600)
Increase in prepaid
expenses and other assets (99,183) (74,738)
Increase in accounts payable,
accrued expenses and other
liabilities 567,469 615,086
Increase in tenants'
security deposits payable 88,274 32,077
Decrease in due to general partners
of subsidiaries and their affiliates (234,255) (151,981)
Increase in due to general partners
and affiliates 600,302 301,019
----------- -----------
Total adjustments 2,093,968 2,360,267
----------- -----------
Net cash provided by operating
activities 184,908 485,970
----------- -----------
</TABLE>
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Decrease) Increase in Cash and Cash Equivalents
(continued)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 25,
-----------------------------
1998 1997*
-----------------------------
<S> <C> <C>
Net cash provided by operating
activities brought forward 184,908 485,970
---------- ----------
Cash flows from investing activities:
Acquisitions of property and
equipment (7,538) (1,141)
---------- ----------
Net cash used in investing activities (7,538) (1,141)
---------- ----------
Cash flows from financing activities:
Principal payments of mortgage
notes payable (267,903) (394,446)
Decrease in capitalization
of consolidated subsidiaries
attributable to minority interest (47,115) (129,783)
(Increase) decrease in deferred costs (30,000) 8,567
---------- ----------
Net cash used in financing
activities (345,018) (515,662)
---------- ----------
Net decrease in cash and
cash equivalents (167,648) (30,833)
Cash and cash equivalents-
beginning of period 1,011,604 1,225,369
---------- ----------
Cash and cash equivalents-
end of period $ 843,956 $1,194,536
========== ==========
</TABLE>
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED
PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1998
(Unaudited)
Note 1 - General
The consolidated financial statements for the six months ended September 25,
1998 and 1997 include the accounts of Cambridge Advantaged Properties II Limited
Partnership, (the "Partnership"), and ten and eleven subsidiary partnerships
("subsidiaries", "subsidiary partnerships" or "Local Partnerships"),
respectively. The Partnership is a limited partner, with an ownership interest
of 98% in each of the subsidiary partnerships. Through the rights of the
Partnership and/or a General Partner, which General Partner has a contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary local partnerships.
For financial reporting purposes, the Partnership's fiscal quarter ends
September 25. The Partnership's fiscal quarter ends September 25 in order to
allow adequate time for the subsidiaries' financial statements to be prepared
and consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with generally accepted accounting
principles ("GAAP"). All subsidiaries have fiscal quarters ending June 30.
Accounts of subsidiaries have been adjusted for intercompany transactions from
July 1 through September 25.
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
The Partnership's investment in each subsidiary is equal to the respective
subsidiary's partners' equity less minority interest capital, if any. Losses
attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $3,700 and $800 and $4,200 and $1,000 for the three and
six months ended September 25, 1998 and 1997, respectively. In con-
7
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED
PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1998
(Unaudited)
solidation, all subsidiary partnership losses are included in the Partnership's
capital account except for losses allocated to minority interest capital.
The unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Partnership's Form 10-K for the
year ended March 25, 1998. In the opinion of the General Partners, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the financial
position of the Partnership as of September 25, 1998, the results of operations
for the three and six months ended September 25, 1998 and 1997 and cash flows
for the six months ended September 25, 1998 and 1997, respectively. However, the
operating results for the six months ended September 25, 1998 may not be
indicative of the results for the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Partnership's March 25, 1998 Annual Report on Form 10-K.
As of September 25, 1998, several subsidiary partnerships are experiencing
financial difficulties. There is doubt about the ability of some of the
subsidiary partnerships to continue as going concerns. Recoverability of a
significant portion of the Partnership's investments will depend upon material
improvements in the ability of each subsidiary partnership to meet its debt
service obligations. In addition, the level of cash distributions provided to
the Partnership by the subsidiary partnerships have not been sufficient, and may
not be sufficient in the future, to cover the Partnership's operating expenses.
As a result, the Partnership has required, and may in the future require,
funding from other sources for such purposes. The consolidated financial
statements do not include any adjustments that might result from the outcome of
these uncertainties. See Note 3 and the Partnership's March 25, 1998 Annual
Report on Form 10-K for management's intentions.
8
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED
PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1998
(Unaudited)
Note 2 - Related Party Transactions
One of the General Partners of the Partnership, Related and Cambridge Associates
Limited Partnership ("Related and Cambridge Associates"), has a 1% interest as a
special limited partner in each of the subsidiary partnerships.
Whitney Management Corp., an affiliate of the General Partners, is the managing
agent of four properties. On November 12, 1997, the property and the related
assets and liabilities of Galveston-Stewarts Landing, Ltd., one of the
properties, was sold.
Fees incurred to related parties for the three and six months ended September
25, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 25, September 25,
----------------------- -----------------------
1998 1997 1998 1997
----------------------- -----------------------
<S> <C> <C> <C> <C>
Partnership manage-
ment fees (a) $161,000 $191,250 $322,000 $382,500
Expense reimburse-
ment (b) 37,643 19,140 53,643 50,176
Property manage-
ment fees incurred
to affiliates of the
General Partners (c) 134,662 139,009 263,176 279,270
Local administra-
tive fee (d) 3,000 3,000 6,000 6,000
-------- -------- -------- --------
336,305 352,399 644,819 717,946
======== ======== ======== ========
Property manage-
ment fees incurred
to affiliates of
the subsidiary
partnerships'
general partners (c) 59,324 56,565 117,345 114,387
-------- -------- -------- --------
Total general and
administrative-
related parties $395,629 $408,964 $762,164 $832,333
======== ======== ======== ========
</TABLE>
(a) After all other expenses of the Partnership are paid, an annual partnership
management fee of up to .5% of invested assets is
9
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED
PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1998
(Unaudited)
payable to the Partnership's General Partners and affiliates. Partnership
management fees have been charged to operations and are included in
administrative and management-related parties expenses. Partnership management
fees owed to the General Partners amounting to approximately $2,174,000 and
$1,877,000 were accrued and unpaid as of September 25, 1998 and March 25, 1998,
respectively.
(b) An affiliate of the General Partners performs services for the Partnership
which include, but are not limited to: accounting and financing management,
registrar, transfer and assignment functions, asset management, investor
communications, printing and other administrative services. The amount of
reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. Another affiliate of the General Partners performs asset
monitoring for the Partnership. These services include site visits and
evaluations of the subsidiary partnerships' performance. Expense reimbursements
and asset monitoring fees owed to the General Partners amounting to
approximately $590,000 and $537,000 were accrued and unpaid as of September 25,
1998 and March 25, 1998, respectively.
(c) Property management fees paid by subsidiary partnerships amounted to
$205,993 and $206,314 and $404,191 and $416,111 for the three and six months
ended September 25, 1998 and 1997, respectively. Of these fees $97,617 and
$107,461 and $190,133 and $213,860 were incurred to affiliates of the subsidiary
partnerships. In addition, $134,662 and $139,009 and, $263,176 and $279,270 were
incurred to affiliates of the General Partners for the three and six months
ended September 25, 1998 and 1997. Of such amounts incurred to affiliates of the
General Partners, $38,293 and $50,896 and $72,788 and $99,473 are also included
in amounts incurred to affiliates of the subsidiary partners because they were
incurred to affiliates of both.
(d) Related and Cambridge Associates, a limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
10
<PAGE>
CAMBRIDGE ADVANTAGED PROPERTIES II LIMITED
PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 25, 1998
(Unaudited)
Note 3 - Commitments and Contingencies
There were no material changes and/or additions to disclosures regarding the
subsidiary partnerships which were included in the Partnership's Annual Report
on Form 10-K for the period ended March 25, 1998.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Partnership's primary sources of funds are the cash distributions from
operations of the Local Partnerships in which the Partnership has invested.
These sources are available to meet obligations of the Partnership. However, the
cash distributions received from the Local Partnerships to date have not been
sufficient to meet all such obligations of the Partnership. During the six
months ended September 25, 1998 and 1997 such distributions amounted to
approximately $178,000 and $150,000, respectively. Accordingly, the Related
General Partner advanced funds to meet the Partnership's third party obligations
with remaining unpaid balances due to the Related General Partner totaling
approximately $2,414,000 and $2,060,000 at September 25, 1998 and March 25,
1998, respectively. In addition, certain fees and expense reimbursements owed to
the General Partners amounting to approximately $2,764,000 and $2,414,000 were
accrued and unpaid as of September 25, 1998 and March 25, 1998, respectively.
Without the General Partners' advances and continued accrual without payment of
certain fees and expense reimbursements, the Partnership will not be in a
position to meet its obligations. The General Partners have continued advancing
and allowing the accrual without payment of these amounts, but are under no
obligation to do so.
During the six months ended September 25, 1998, cash and cash equivalents of the
Partnership and its ten consolidated Local Partnerships decreased approximately
$168,000. This decrease was attributable to acquisitions of property and
equipment ($8,000), a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($47,000), an increase in deferred costs
($30,000) and principal payments of mortgage notes payable ($268,000) which
exceeded cash flow provided by operating activities ($185,000). Included in the
adjustments to reconcile the net loss to cash flow provided by operating
activities is depreciation and amortization ($1,670,000).
For a discussion of contingencies affecting certain Local Partnerships, see
Notes 1 and 3 to the Financial Statements.
Management has been in contact with all the Local Partnerships in the southeast
region and does not anticipate any significant increases to repairs and
maintenance due to the effect of Hurricane Georges on the portfolio.
12
<PAGE>
Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy.
Results of Operations
Excluding Galveston, which sold its property on November 12, 1997, general and
administrative and repairs and maintenance, the results of operations of the
Partnership, as well as the Local Partnerships remained fairly consistent during
the three and six months ended September 25, 1998 and 1997. The majority of
Local Partnership income continues to be in the form of rental income with the
corresponding expenses being divided among operations, depreciation and mortgage
interest.
Rental income decreased approximately 1% and 3% for the three and six months
ended September 25, 1998 as compared to the corresponding periods in 1997.
Excluding Galveston, rental income increased approximately 5% and 3% for the
three and six months ended September 25, 1998, as compared to the corresponding
periods in 1997 primarily due to rental rate increases.
Other income increased approximately $27,000 for the three months ended
September 25, 1998 as compared to the corresponding period in 1997. Excluding
Galveston, such income increased approximately $35,000 primarily due to an
increase in security deposits income and late fees at one Local Partnership as
well as a small increase at a second Local Partnership.
Total expenses, excluding Galveston, general and administrative and repairs and
maintenance expense, remained fairly consistent with decreases of approximately
3% and 2% for the three and six months ended September 25, 1998 as compared to
1997.
General and administrative increased approximately $1,000 and $48,000 for the
three and six months ended September 30, 1998 as compared to the corresponding
periods in 1997. Excluding Galveston, such expenses increased approximately
$80,000 and
13
<PAGE>
$176,000 primarily due to an increase in salary expense due to the hiring of new
employees at four Local Partnerships.
Repairs and maintenance increased approximately $236,000 and $251,000 for the
three and six months ended September 25, 1998 as compared to the corresponding
periods in 1997. Excluding Galveston, such expenses increased approximately
$281,000 and $331,000 primarily due to exterminating, painting, carpet
replacement and driveway repairs at one Local Partnership, plumbing, painting,
pool and carpet repairs at a second Local Partnership, and carpet replacement,
installation of new locks and painting at a third Local Partnership.
Year 2000 Compliance
The Partnership utilizes the computer services of an affiliate of the General
Partners. The affiliate of the General Partners is in the process of upgrading
its computer information systems to be year 2000 compliant and beyond. The Year
2000 compliance issue concerns the inability of a computerized system to
accurately record dates after 1999. The affiliate of the General Partners
recently underwent a conversion of its financial systems applications and is in
the process of upgrading and testing the in house software and hardware
inventory. The workstations that experienced problems from this process were
corrected with an upgrade patch. The affiliate of the General Partners have
incurred costs of approximately $1,000,000 to date and estimates the total costs
to be approximately $2,000,000. These costs are not being charged to the
Partnership. In regard to third parties, the Partnership's General Partners are
in the process of evaluating the potential adverse impact that could result from
the failure of material service providers to be year 2000 compliant. A detailed
survey and assessment of third party readiness will be sent to material third
parties in the fourth quarter of 1998. The results of the surveys will be
compiled in early 1999. No estimate can be made at this time as to the impact of
the readiness of such third parties. The Partnership's General Partners plan to
have these issues fully assessed by the end of 1998, at which time the risks
will be addressed and a contingency plan will be implemented if necessary.
14
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CAMBRIDGE ADVANTAGED
PROPERTIES II LIMITED PARTNERSHIP
(Registrant)
By: RELATED ADVANTAGED RESIDENTIAL
ASSOCIATES, INC., a General Partner
Date: November 6, 1998
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Senior Vice President
(principal financial officer)
Date: November 6, 1998
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(principal accounting officer)
By: RELATED AND CAMBRIDGE ASSOCIATES,
LIMITED PARTNERSHIP,
a General Partner
By: Related Advantaged Residential
Associates, Inc.,
its General Partner
Date: November 6, 1998
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Senior Vice President
(principal financial officer)
Date: November 6, 1998
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> The Schedule contains summary financial
information extracted from the financial
statements for Cambridge Advantaged
Properties II L.P. and is qualified in
its entirety by reference to such
financial statements
</LEGEND>
<CIK> 0000771996
<NAME> Cambridge Advantaged Properties II L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-25-1999
<PERIOD-START> MAR-26-1998
<PERIOD-END> SEP-25-1998
<CASH> 843,956
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,382,626
<PP&E> 114,548,599
<DEPRECIATION> 45,238,068
<TOTAL-ASSETS> 75,612,659
<CURRENT-LIABILITIES> 14,056,536
<BONDS> 90,941,430
0
0
<COMMON> 0
<OTHER-SE> (29,385,307)
<TOTAL-LIABILITY-AND-EQUITY> 75,612,659
<SALES> 0
<TOTAL-REVENUES> 8,549,399
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,959,959
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,524,459
<INCOME-PRETAX> (1,935,019)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,909,060)
<EPS-PRIMARY> (264)
<EPS-DILUTED> 0
</TABLE>
