<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-QSB
-----------
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from________ to ________
Commission file number 0-13969
JOHN ADAMS LIFE CORPORATION
---------------------------
(Exact name of small business issuer as specified in its charter)
California 95-4081667
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11845 W. Olympic Boulevard, Suite 905, Los Angeles, California 90064
- --------------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number:
(310) 444-5252
Former Address: Not Applicable
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes x
No _____
The number of shares outstanding of the issuer's common stock (no par value) as
of August 12, 1996, was 2,864,700.
Transitional Small Business Disclosure Format (check one):
Yes No x
------- -------
<PAGE> 2
JOHN ADAMS LIFE CORPORATION
FORM 10-QSB
JUNE 30, 1996
INDEX
PAGE NO.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 1996
(Unaudited) 3
Consolidated Statements of Operations -
Three and six months ended June 30, 1996 and 1995
(Unaudited) 5
Consolidated Statements of Cash Flows -
Three and six months ended June 30, 1996 and 1995
(Unaudited) 6
Notes to Consolidated Financial Statements
(Unaudited) 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
PART II. OTHER INFORMATION 12
2
<PAGE> 3
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET--JUNE 30, 1996
ASSETS
(UNAUDITED)
<TABLE>
<S> <C>
CASH AND INVESTMENTS
Cash................................................. $ 571,650
Bonds:
Available for sale, at fair value
(amortized cost of $13,945,821)..................... 13,564,222
Policy loans, net of unearned interest of $222,490... 6,263,363
---------------
20,399,235
REINSURANCE RECOVERABLE................................ 2,373,041
DEFERRED POLICY ACQUISITION COSTS, less reimbursement
of deferred policy acquisition costs due
to reinsurance................................... 4,599,843
ACCOUNTS RECEIVABLE.................................... 19,004
ACCRUED INVESTMENT INCOME.............................. 195,310
OTHER ASSETS........................................... 410,919
---------------
Total assets .................................... $ 27,997,352
===============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET--JUNE 30, 1996
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<S> <C>
LIABILITIES:
POLICY LIABILITIES
Future life benefits and other policy obligations. $ 19,230,469
Deferred revenue ................................. 704,832
---------------
19,935,301
DUE TO REINSURERS .................................. 1,909,459
OTHER LIABILITIES .................................. 1,001,279
---------------
22,846,039
---------------
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, no par value--
Authorized--5,000,000 shares; no shares
outstanding................................... -
Common stock, no par value--
Authorized--15,000,000 shares
Issued and Outstanding--2,864,700 shares........ 6,254,547
Net unrealized loss on bonds available for sale,
net of deferred policy acquisition costs
adjustments................................... (205,562)
Retained earnings - deficit....................... (897,672)
---------------
5,151,313
Unearned restricted stock compensation............ -
---------------
5,151,313
---------------
Total liabilities and shareholders' equity...... $ 27,997,352
===============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
---------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Premiums and policy charges............ $ 362,035 $ 426,842 $ 644,960 $ 740,075
Premiums ceded......................... (146,982) (189,673) (279,472) (336,678)
------------- ------------- ------------- -------------
Net Premiums and policy charges........ 215,053 237,169 365,488 403,397
Interest on policy loans............... 160,733 132,734 298,027 246,039
Investment income, net................. 282,008 172,414 474,176 348,851
Net realized investment losses......... (1,886) (1,266) (2,260) (5,402)
Net unrealized investment gains........ - 52,197 - 118,597
------------- ------------- ------------- -------------
655,908 593,248 1,135,431 1,111,482
------------- ------------- ------------- -------------
BENEFITS AND EXPENSES:
Benefits incurred ..................... 246,469 243,845 690,091 425,164
Reinsurance recoveries................. (133,104) (2,764) (348,286) (19,241)
------------- ------------- ------------- -------------
Net benefits incurred.................. 113,365 241,081 341,805 405,923
Interest on policyholders'
accumulation accounts................ 203,185 104,397 361,205 204,711
Operating costs and expenses........... 254,700 218,860 425,778 543,810
Amortization of deferred policy
acquisition costs ................... 56,543 54,692 114,808 (1,735)
------------- ------------- ------------- -------------
627,793 619,030 1,243,596 1,152,709
------------- ------------- ------------- -------------
Net income (loss).................... $ 28,115 $ (25,782) $ (108,165) $ (41,227)
============= ============= ============= =============
Net income (loss) per share............... $ 0.01 $ (0.01) $ (0.04) $ (0.01)
============= ============== ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss................................................ $ (108,165) $ (41,227)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Net sales of bonds held for trading................... - 23,599
Net realized investment losses........................ 2,260 5,402
Net unrealized investment gains....................... - (118,597)
Net accretion of investment premiums and discounts.... 5,998 (58)
Policy loans.......................................... (76,893) (12,763)
Reinsurance recoverable............................... 188,845 2,126,787
Accounts receivable................................... (9,530) 1,716
Other assets.......................................... (108,914) 264,313
Deferred policy acquisition costs before effect of
unrealized investment gains/losses.................. (447,241) (214,632)
Accrued investment income............................. (54,093) 54,571
Policy liabilities.................................... (404,890) (2,226,081)
Amortization of unearned restricted stock compensation 18,750 18,750
Amounts due to reinsurers............................. 494,380 (1,521,898)
Other liabilities..................................... 365,786 (346,374)
--------------- ---------------
Net cash used in operating activities................. (133,707) (1,986,492)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments.............................. (3,645,541) (1,653,486)
Sales, maturities and repayments of principal on
investments......................................... 586,992 2,768,606
--------------- ---------------
Net cash provided by (used in) investing activities..... (3,058,549) 1,115,120
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholder fund receipts.............................. 2,975,804 792,654
--------------- ---------------
Net cash provided by financing activities............... 2,975,804 792,654
--------------- ---------------
DECREASE IN CASH............................................. (216,452) (78,718)
CASH AT BEGINNING OF YEAR.................................... 788,102 395,001
--------------- ---------------
CASH AT END OF PERIOD........................................ $ 571,650 $ 316,283
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
Summary of significant accounting policies
Basis of Presentation
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-QSB. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting only of normal accruals)
considered necessary for a fair presentation have been included. In addition,
these accounting principles differ in certain material respects from the
accounting practices prescribed by various insurance regulatory authorities.
The results of operations for the three months and six months ended June 30,
1996, are not necessarily indicative of the results to be expected for the full
year. The accompanying unaudited consolidated financial statements should be
read in conjunction with the audited consolidated financial statements for the
year ended December 31, 1995, contained in the Company's 1995 Annual Report to
Shareholders. Certain items have been reclassified to conform to the current
year's presentation.
Premium revenue and related expenses
Premiums for traditional life insurance products are recorded as earned when
due. Benefits and expenses are associated with earned premiums in order to
recognize profits over the contract terms in proportion to premiums earned.
This association is accomplished by the provision of a reserve for future
policy benefits and the deferral and subsequent amortization of policy
acquisition costs. The reserve for future policy benefits and the amortization
of deferred acquisition costs for traditional life insurance products are
computed using the net level premium method based on estimated future
investment yield, mortality and withdrawals.
Revenues for interest sensitive life policies and investment products consist
of mortality charges for the cost of insurance, policy administration fees and
surrender charges assessed to policy account balances.
7
<PAGE> 8
Deferred revenue
Deferred revenue represents the excess of premiums collected from policyholders
over the cost of providing insurance. This profit is amortized into income
over the life of the related insurance policy.
Deferred acquisition costs
The costs of acquiring new business, principally commissions paid to agents and
other related policy issuance costs, are capitalized and amortized over the
policy term in proportion to related premium income for traditional life
insurance products and for interest sensitive life-type and investment
contracts over the estimated lives of the contracts in relation to the present
value of the estimated gross profits, which are comprised of net interest
income, net realized investment gains and losses, surrender charges, mortality
margins and policy administration fees and expenses. Amounts received from
reinsurers representing reimbursements of the costs of acquiring new business
are deferred and recognized over the policy term in proportion to related
premiums paid to reinsurers.
Deferred acquisition costs, net of accumulated amortization at June 30, 1996,
are summarized as follows:
<TABLE>
<S> <C>
Total amount capitalized.............. $6,044,455
Reimbursement due to reinsurance ......(1,444,612)
-----------
$4,599,843
===========
</TABLE>
Bonds
Bonds available for sale are carried at aggregate market value, with net
unrealized holding losses charged directly to shareholders' equity. The change
in net unrealized holding loss on bonds available for sale charged to
shareholders' equity was $205,562 for the six months ended June 30, 1996.
Realized gains and losses on the sale of bonds are recognized in operations at
the date of sale and are determined using the specific cost identification
method, in accordance with the Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities."
Policy loans
Policy loans are recorded at the unpaid balance, less interest collected in
advance. Interest on policy loans is recognized using the effective interest
method.
8
<PAGE> 9
Future policy benefits
Liabilities for future policy benefits for traditional life insurance products
have been computed on the net level premium method, based upon the following
estimated future investment yield, mortality and withdrawal assumptions:
Investment Yield - 9.9 percent to 13.6 percent annually over
the policy life of the Company's primary products.
Mortality Rates - Primarily based on 80 percent of the
1965-1970 Modified Basic Select and Ultimate Mortality Table.
Withdrawal Rates - Primarily based on Company experience.
Liabilities for interest sensitive life-type and investment contracts are
stated at policyholder account values (premiums received, plus interest
credited less withdrawals and charges for mortality and policy administration).
Income taxes
The adoption of Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" did not have a material effect on the financial position or
results of operations of the Company, in the six months of 1996.
Earnings per share
Earnings per share are computed on the basis of the weighted average number of
shares outstanding during each year. The calculation of the weighted average
number of shares outstanding includes the effect of stock equivalents arising
from the Company's repurchase of its stock and the issuance of restricted stock.
Weighted average shares outstanding totaled 2,864,700, at June 30, 1996 and
1995. The impact of stock options was not dilutive.
9
<PAGE> 10
JOHN ADAMS LIFE CORPORATION AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Results of Operations
The net income in the second quarter of 1996 totaled $28,000 or $.01
per share compared to a net loss of $26,000 or $.01 per share for the
comparable period of 1995. For the six months, there was a net loss of
$108,000 or $.04 per share in 1996, compared to a net loss of $41,000 or $.01
per share in 1995.
The net income for the three months ended June 30, 1996, compared to
the net loss for the comparable period in 1995, is due primarily to increases
in net premiums, interest on policy loans and net investment income.
Net premiums and policy charges during the first six months of 1996
decreased to $365,000 from $403,000 for the comparable period of 1995. The
Company has changed its sales emphasis to annuities. The premiums shown on the
Company's consolidated statement of operations in accordance with GAAP consist
of premiums received for traditional whole-life and term life insurance
products. Premiums collected by the Company for interest sensitive whole-life,
and single and flexible premium deferred annuities are not reported as premium
revenues, but rather are reported as policy liabilities. With respect to these
products, revenues are recognized over time in the form of investment income on
invested funds, surrender charges and mortality and other charges deducted from
the policyholders' account balances. The deposit-type funds (premiums)
collected by the Company for annuities (on a statutory accounting basis as set
forth in the Company's statutory financial statements filed with state
insurance departments) were $954,000 in the second quarter of 1996, and
$393,000 in the second quarter of 1995, and were $2,946,000 for the first six
months ended June 30, 1996 and $776,000 for the comparable period of 1995.
There were no net unrealized investment gains or losses for the first
six months of 1996, as the Company reclassified its bonds held for trading to
bonds available for sale thereby placing all of its bonds in the same category.
Revenues from interest sensitive life policies, consisting of
mortality charges, policy administration fees and surrender charges assessed to
policy account values increased to $172,000 in the second quarter of 1996 from
$159,000 in the second quarter of 1995. For the six months, revenues from
interest sensitive policies decreased to $324,000 in 1996 from $352,000 in
1995.
10
<PAGE> 11
Interest on policy loans and net investment income increased to
$772,000 for the first six months ending June 30, 1996 from $595,000 for the
comparable period in 1995.
The increase in the amortization of deferred acquisition costs during
the six months ending June 30, 1996, as compared to 1995, is primarily due to
revised assumptions included in estimates of future gross profits relating to
investment and mortality margins based upon actual experience for the Company's
interest sensitive life products.
Liquidity and Capital Resources
The Company's investments in policy loans tends to enhance liquidity,
since liabilities of the Company on surrenders of whole-life paid-up at age 70
or 80 policies can be satisfied largely through the discharge of the policy
loan, with very little net cash outflow.
The Company does not invest in high-risk bonds, it keeps tight
controls on expenditures, and its products are structured in such a way that
commission expenses and policy loans are usually less than premium revenues,
reinsurance allowances and interest on policy loans paid in advance.
Developing and writing new life insurance, however, can result in a reduction
of statutory capital and surplus because the Company establishes statutory
reserves for future policy benefits and incurs a noncash liability for unearned
policy loan interest that exceeds the premium revenue associated with the new
policy. JALIC's statutory capital and surplus at June 30, 1996, was
$1,937,380. JALIC is negotiating a reinsurance agreement, which if consummated
will increase JALIC's capital and surplus to an amount in excess of the goal of
$2,350,000 for June 30, 1996, established by the California Department of
Insurance. If the reinsurance agreement is not consummated and if the sale
agreement referred to below is not completed, the Company will seek to borrow
the funds necessary to meet the goal.
On June 7, 1996, the Company signed a letter of intent with Unified
Life Insurance Company ("Unified"), a Texas corporation, for the sale by the
Company of its 99.6% interest in JALIC to Unified. The Company is negotiating
the terms of the sale agreement with Unified. The purchase price set forth in
the letter of intent for the shares of JALIC common stock owned by the Company
is $4.3 million, subject to various adjustments. There is no assurance that
the final agreement with Unified for the sale of JALIC will be entered into.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any legal proceedings that in
management's opinion could result in a material adverse
effect on the Company's financial condition or results of
operation.
Item 2. Changes in Securities - Not applicable.
Item 3. Defaults Upon Senior Securities - Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its Annual Meeting of Shareholders on
June 6, 1996.
(b) and (c) The following directors were elected at the
June 6, 1996 meeting:
<TABLE>
<CAPTION>
Director *Votes: For Withheld
-------- --- --------
<S> <C> <C>
Robert E. Adams 2,478,869 8,700
L.E. Chenault 2,478,869 8,700
Nicholas Del Sesto 2,478,869 8,700
Benjamin A. De Motto 2,478,869 8,700
Alvin S. Milder 2,478,869 8,700
</TABLE>
*The Company had 2,864,700 shares outstanding on the
record date, April 12, 1996.
The ratification of the Board of Directors' selection of
Ernst & Young as the Company's independent public accountants
for the year ending December 31, 1996, was also voted on at
the Annual Meeting. The votes were:
<TABLE>
<S> <C>
For: 2,487,269
Against: -0-
Abstain: 300
</TABLE>
Item 5. Other Information - Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K: On June 13, 1996, the Company filed
a report on Form 8-K, dated June 7, 1996; the item reported on
this form was the Company's signing of a letter of intent for
the sale to Unified Life Insurance Company of the shares of
the common stock of John Adams Life Insurance Company of
America.
12
<PAGE> 13
(b) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
2.1 Agreement and Plan of Reorganization with Firingline
Corporation (1)
3.1 Amended and Restated Articles of Incorporation (2)
3.2 Bylaws (10)
3.5 Amendments to Bylaws (10)
4.1 See Articles 3(b), 5 and 6 of Amended Articles of Incorporation
(Exhibit 3.1) (2)
4.2 See Article 2 and Section 8.06 of the Bylaws (Exhibit 3.2) (10)
4.3 Specimen Form of Common Stock Certificate (1)
10.1 Agreement and Plan of Reorganization (see Exhibit 2.1) (1)
10.2 * Supervising General Agent's Commission Agreement between
JALIC and Ozco Insurance Services, Inc., assigned to
Firingline Corporation in June 1985 (1)
10.6 Certificate of Contribution No. 1 of Thomas W. Evans (1)
10.7 Certificate of Contribution No. 2 of Thomas W. Evans (1)
10.8 Shareholder Loan Restructuring Agreement (1)
10.10 Lease Agreement with Westside Associates, Ltd. (2)
10.14 * 1990 Stock Option Plan (3)
10.15 * 1990 Non-Employee Director Stock Option Plan (3)
10.16 * 1991 Employment Agreement with Benjamin A. DeMotto (4)
10.17 * 1985 Incentive Stock Option Plan (with 1991 Amendment) (5)
10.18 * 1990 Stock Option Plan (with 1991 Amendment) (5)
10.19 * 1990 Non-Employee Director Stock Option Plan (with 1991
Amendment) (5)
10.20 Addendum No. 2 to Lease Agreement with Westside Associates,
Ltd. (5)
10.21 * 1994 Employment Agreement with Benjamin A. DeMotto (7)
10.22 Quota share Coinsurance, Assumption Reinsurance Agreement,
effective December 31, 1994, between JALIC and
Central United Life Insurance Company of Houston, Texas (9)
10.23 Promissory Note dated January 24, 1996, issued to Benjamin A.
DeMotto for a loan (11)
10.24 Promissory Note dated February 9, 1996, issued to Benjamin A.
DeMotto, for a loan (11)
10.25 Letter of intent, dated June 7, 1996, for the sale of JALIC to
Unified Life Insurance Company (12)
16.1 Letter from Price Waterhouse LLP, dated December 21, 1994,
regarding change of independent auditors (8)
21.1 List of Subsidiaries (1)
28.1 Amended Certificate of Authority of JALIC issued by the
California Department of Insurance (1)
</TABLE>
________________________
13
<PAGE> 14
( 1) Previously filed with Registrant's Registration Statement No. 2-99302 on
Form S-1, effective September 18, 1985. **
( 2) Previously filed with Registrant's Quarterly Report on Form 10-Q for the
quarter ending June 30, 1988. **
( 3) Previously filed with Registrant's Quarterly Report on Form 10-Q for the
quarter ending September 30, 1990. **
( 4) Previously filed with Registrant's Quarterly Report on Form 10-Q for the
quarter ending June 30, 1991. **
( 5) Previously filed with Registrant's Annual Report on Form 10-K for the
fiscal year ending December 31, 1991. **
( 6) Previously filed with Registrant's Quarterly Report on Form 10-QSB for
the quarter ending March 31, 1994. **
( 7) Previously filed with Registrant's Quarterly Report on Form 10-QSB for
the quarter ending September 30, 1994. **
( 8) Previously filed with Registrant's Report on Form 8-K filed December 23,
1994. **
( 9) Previously filed with Registrant's Report on Form 10-KSB for the fiscal
year ending December 31, 1994. **
(10) Previously filed with Registrant's Report on Form 10-QSB for the quarter
ending March 31, 1995. **
(11) Previously filed with Registrant's Report on Form 10-KSB for the fiscal
year ending December 31, 1995. **
(12) Previously filed with Registrant's Report on Form 8-K filed June 13,
1996. **
* The documents filed or incorporated by reference as Exhibits 10.2,
10.5, 10.14 through 10.19, and 10.21 hereto constitute management
contracts or compensatory plans or arrangements.
** Incorporated by reference from the documents described above.
14
<PAGE> 15
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.
JOHN ADAMS LIFE CORPORATION
Date: August 12, 1996 By: Benjamin A. DeMotto
----------------------
Benjamin A. DeMotto
Chairman of the Board
and President
Date: August 12, 1996 By: Bernadette de Vera
-----------------------
Bernadette de Vera
Controller
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE
SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 571,650
<SECURITIES> 13,564,222
<RECEIVABLES> 19,004
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,723,227
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,997,352
<CURRENT-LIABILITIES> 2,910,738
<BONDS> 0
0
0
<COMMON> 6,254,547
<OTHER-SE> (897,672)
<TOTAL-LIABILITY-AND-EQUITY> 27,997,352
<SALES> 0
<TOTAL-REVENUES> 1,135,431
<CGS> 0
<TOTAL-COSTS> 1,243,596
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108,165)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
