3
UNITED STATES 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 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 1-9016
___________________________
AMERICAN INDUSTRIAL PROPERTIES REIT
(Exact name of registrant as specified in its charter)
Texas 75-6335572
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6220 North Beltline Road, Suite 205
Irving, Texas 75063-2656
(Address of principal executive offices) (Zip code)
(214) 550-6053
(Registrant's telephone number, including area code)
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 _____
9,075,400 Shares of Beneficial Interest were outstanding as
of October 31, 1995.
American Industrial Properties REIT
Form 10-Q
For the Quarter Ended September 30, 1995
INDEX
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations for the three
months and nine months
ended September 30, 1995 and 1994 3
Consolidated Balance Sheets as of September 30, 1995
and December 31, 1994 4
Consolidated Statements of Cash Flows for the nine
months ended
September 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition
and Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 10
Item 3. Defaults Upon Senior Securities 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 12
American Industrial Properties REIT
Consolidated Statements of Operations
(unaudited, in thousands except share and per share data)
Three Months EndedNine Months Ended
September 30, September 30,
1995 1994 1995 1994
<TABLE>
<S> <C> <C> <C> <C>
REVENUES
Rents 2164 2103 6467 6177
Tenant reimbursements 634 683 2080 2036
Interest income 94 108 284 280
2892 2894 8831 8493
REAL ESTATE EXPENSES
Property operating expenses:
Property taxes 355 370 1056 1099
Property management fees 100 104 315 330
Utilities 127 134 345 361
General operating 192 202 531 618
Repairs and maintenance 69 67 293 225
Other property operating expe 87 71 221 242
Depreciation and amortization 663 846 2109 2511
Interest on 8.8% notes payabl 1334 1024 3373 2998
Interest on mortgages payable 394 171 1317 520
Amortization of original issue discount on
Zero Coupon Notes due 1997 0 404 0 1155
Administrative expenses:
Trust administration and over 323 307 1100 1072
Litigation and proxy costs 146 100 521 733
3790 3800 11181 11864
Loss from real estate operati -898 -906 -2350 -3371
Loss on sales of real estate 0 -191 0
Extraordinary loss on
extinguishment of debt 0 -55 0
NET LOSS -898 -906 -2596 -3371
PER SHARE DATA
Loss from real estate operati (0.10) (0.10) (0.26) (0.37)
Loss on sales of real estate 0.00 0.00 (0.02) 0.00
Extraordinary loss on
extinguishment of debt 0.00 0.00 (0.01) 0.00
Net Loss (0.10) (0.10) (0.29) (0.37)
Distributions Paid 0.00 0.00 0.00 0.00
Number of shares outstanding 9075400 9075400 9075400 9075400
</TABLE>
The accompanying notes are an integral part of these financial statements.
American Industrial Properties REIT
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30December 31,
1995 1994
(unaudited)
<TABLE>
<S> <C> <C>
ASSETS
Real estate:
Held for investment 96,937 95,033
Held for sale 5,406 8,810
102,343 103,843
Accumulated depreciation (22,810) (21,859)
Net real estate 79,533 81,984
Cash and cash equivalents:
Unrestricted 7,234 6,919
Restricted 684 602
Total cash and cash equivalents 7,918 7,521
Other assets, net 2,772 3,045
Total Assets 90,223 92,550
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
8.8% notes payable 45,239 45,239
Mortgage notes payable 17,632 20,374
Accrued interest 3,845 504
Accounts payable, accrued expenses 1,383 1,682
and other liabilities
Tenant security deposits 524 555
Total Liabilities 68,623 68,354
Shareholders' Equity:
Shares of beneficial interest, $0.10 par value authorized
10,000,000 Shares; issued and outstanding
9,075,400 Shares 908 908
Additional paid-in capital 124,605 124,605
Retained earnings (deficit) (103,913)(101,317)
Total Shareholders' Equity 21,600 24,196
Total Liabilities and Shareholders' Equi 90,223 92,550
</TABLE>
The accompanying notes are an integral part of these financial statements.
American Industrial Properties REIT
Consolidated Statements of Cash Flows
(unaudited, in thousands)
Nine Months Ended
Sept. 30, Sept. 30,
1995 1994
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (2,596) (3,371)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of original issue discount on Zero
Coupon Notes due 1997 0 1,155
Depreciation and amortization 2,109 2,511
Loss on sales of real estate 191 0
Extraordinary loss on extinguishment of debt 55 0
Changes in operating assets and liabilities:
Decrease in other assets 15 217
Increase in accrued interest 3,341 1,011
Increase (decrease) in accounts payable,
accrued expenses and other liabilities
and tenant security deposits (295) 56
Net Cash Provided By Operating Activities 2,820 1,579
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate (1,309) 0
Capitalized improvements and leasing commission (793) (1,251)
Net proceeds from sales of real estate 2,476 0
Net Cash Used In Investing Activities 374 (1,251)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on mortgage notes payable (2,742) (97)
Prepayment penalty on extinguishment of debt (55) 0
Partial repurchase of Zero Coupon Notes 0 (158)
Net Cash Used In Financing Activities (2,797) (255)
Net Increase in Cash and Cash Equivalents 397 73
Cash and Cash Equivalents at Beginning of Perio 7,521 1,119
Cash and Cash Equivalents at End of Period 7,918 1,192
Cash Paid for Interest 1,349 2,507
</TABLE>
American Industrial Properties REIT
Notes to Consolidated Financial Statements
September 30, 1995
(unaudited)
Note 1 - Basis of Presentation
The accompanying consolidated financial statements are
presented in accordance with the requirements of Form 10-Q
and consequently do not include all of the disclosures
required by generally accepted accounting principles or
those contained in the Trust's Annual Report on Form 10-K.
Accordingly, these financial statements should be read in
conjunction with the audited financial statements of the
Trust for the year ended December 31, 1994, included in the
Trust's Annual Report on Form 10-K.
The financial information included herein has been prepared
in accordance with the Trust's customary accounting
practices and has not been audited. In the opinion of
management, the information presented reflects all
adjustments necessary for a fair presentation of interim
results. All such adjustments are of a normal and recurring
nature.
Certain amounts in prior year financial statements have been
reclassified to conform with the current year presentation.
Note 2 - Significant Accounting Policies
Principles of Consolidation. The consolidated financial
statements of the Trust include the accounts of American
Industrial Properties REIT and its wholly-owned
subsidiaries. Significant intercompany balances and
transactions have been eliminated in consolidation.
Real Estate. The Trust carries its real estate at the lower
of depreciated cost or net realizable value. Management
considers net realizable value for assets held for
investment as the total of the estimated undiscounted future
cash flows from the property. For assets held for sale,
management considers net realizable value as estimated
market value. Provisions for possible losses on real estate
are recorded when management determines that the net book
value of a specific real estate property is less than its
net realizable value. At September 30, 1995, fourteen
properties were classified as held for investment and one
property was classified as held for sale. Should unforeseen
factors cause additional properties to be classified as held
for sale, significant adjustments to reduce the net book
value of such properties could be required.
Property improvements are capitalized while maintenance and
repairs are expensed as incurred. Depreciation of buildings
and capital improvements is computed using the straight-line
method over forty years. Depreciation of tenant
improvements is computed using the straight-line method over
ten years.
Other Assets. Other assets consists primarily of deferred
rent receivable, prepaid leasing commissions and loan fees.
Deferred rent receivable arises as the Trust recognizes
rental income, including contractual rent increases or
delayed rent starts, on a straight-line basis over the lease
term. Leasing commissions are capitalized and amortized on
a straight-line basis over the life of the lease. Loan fees
are capitalized and amortized on a level yield basis over
the term of the related loan. The Trust has recorded
deferred rent receivable of $854,000 and $1,157,000 at
September 30, 1995 and December 31, 1994, respectively.
Income Taxes. The Trust qualifies as a real estate
investment trust (a "REIT") under Federal income tax law as
long as it meets certain asset, income, and ownership tests
and it distributes 95% of its taxable income annually. No
provisions for Federal income taxes have been required or
recorded to date.
American Industrial Properties REIT
Notes to Consolidated Financial Statements (continued)
September 30, 1995
(unaudited)
Note 3 - Zero Coupon Notes
In December 1993 and November 1994, the Trust partially in-
substance defeased certain of its Zero Coupon Notes due 1997
(the "Notes") totaling $16,365,000 (face amount at
maturity). At September 30, 1995, the accreted value of
these Notes was $12,727,000.
Note 4 - Litigation
On May 1, 1995, the Trust filed a lawsuit against The
Manufacturers Life Insurance Company ("MLI") in State
District Court in Dallas, Texas. The Trust's lawsuit
alleges that MLI, by declaring the Trust in default and
threatening acceleration of the notes, has breached the Note
Purchase Agreement between MLI and the Trust and has
unlawfully sought to coerce the Trust into relinquishing
certain of its rights and further alleges that MLI has
engaged in acts of bad faith and conspiracy. The lawsuit
was subsequently amended to name as additional defendants
Fidelity Management and Research Company and certain
affiliates (the "Fidelity Entities"). The Trust is seeking
recovery of damages of up to $20,000,000, plus an
unspecified amount for punitive damages, and injunctive
relief to prevent MLI and the Fidelity Entities from
continuing to violate the Trust's rights.
Due to the circumstances resulting in this litigation, the
Trust elected not to make the semi-annual interest payment
due on May 27, 1995. On June 13, 1995, the noteholder
declared the entire principal amount outstanding of
$45,239,000 and all accrued interest thereon immediately due
and payable. The noteholder further indicated that
effective June 13, 1995, interest on the principal amount
outstanding would accrue at the default rate of 11.7% as
provided in the Note Purchase Agreement. Although
management disagrees with the imposition of the default rate
by the noteholder based on the circumstances resulting in
the litigation, generally accepted accounting principles
require that interest be accrued at the default rate.
Accordingly, the accompanying financial statements include
accrued interest based on the default rate from June 13,
1995. In the event that the loan is determined to be
immediately due and payable, and is not ultimately modified
or restructured through the favorable resolution of the
litigation or otherwise, the Trust will be forced to
consider such action as it deems necessary to protect the
interests of the Trust and its shareholders, including
seeking protection under applicable bankruptcy laws.
On October 3, 1995, The Manufacturers Life Insurance Company
(U.S.A.), Inc. ("MLI-USA") intervened in the lawsuit
asserting ownership of one of the notes. On the same day,
MLI and MLI-USA filed counterclaims against the Trust
seeking recovery of all amounts due under the notes. On
October 19, 1995, the Trust filed answers to these
counterclaims. On October 18, 1995, MLI filed an
application for a temporary restraining order and injunction
in the lawsuit, seeking to enjoin the Trust from paying a
scheduled dividend to its shareholders on October 23, 1995.
On October 20, 1995, the court, after hearing argument,
denied MLI's application. On October 19, 1995, the Trust
amended its lawsuit and filed an application for declaratory
judgment and injunctive relief, stating that MLI had
wrongfully declared a default and wrongfully accelerated the
maturity of the notes.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The table below provides a reconciliation of net loss, funds
from operations ("FFO") and funds available for distribution
("FAD") for the quarter and nine months ended September 30, 1995
and 1994. Management believes that the presentation of FFO and
FAD will enhance the reader's understanding of the Trust's
financial condition as well as provide comparability to other
real estate investment trusts. Neither FFO or FAD should be
considered an alternative to net income as an indicator of the
Trust's operating performance or to cash flows from operations as
a measure of liquidity. The determination of FFO is based on the
definition adopted by the National Association of Real Estate
Investment Trusts which is net income (computed in accordance
with generally accepted accounting principles), adjusted to
exclude gains or losses from debt restructuring and sales of
property, depreciation and amortization and to include
adjustments for unconsolidated partnerships and joint ventures.
FAD is generally more indicative of the Trust's ability to make
distributions as it includes the effect of the Trust's capital
expenditures.
(000) (000)
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<TABLE>
<S> <C> <C> <C> <C>
Net loss $(898) $(906) $(2,596) $(3,371)
Loss on sales of
real estate 0 0 191 0
Extraordinary loss
on
extinguishment of
debt 0 0 55 0
Depreciation and
amortization 663 846 2,109 2,511
Amortization of OID
on Zero
Coupon Notes due
1997 0 404 0 1,155
Funds from
operations ("FFO") (235) 344 (241) 295
Capitalized
improvements and
leasing commissions (297) (183) (793) (1,251)
Funds available for
distribution("FAD") $(532) $161 $(1,034) $(956)
</TABLE>
Three Months Ended September 30, 1995 and 1994
The net loss of the Trust decreased by $8,000 when comparing
the quarter ended September 30, 1995 to the same quarter in 1994.
This was the result of a slight increase in net operating income,
a decrease in depreciation and amortization (due in part to the
sale of the Quadrant property in February 1995), the effect of
the November 1994 financing (which effectively replaced the
amortization of the original issue discount on the zero coupon
notes with interest expense), and an increase in Trust
administrative expenses due to the current litigation costs.
FFO decreased by $579,000 when comparing the quarter ended
September 30, 1995 to the same quarter in 1994. The is
attributable to the November 1994 financing (the amortization of
the original issue discount on the zero coupon notes in 1994 is
not included in the FFO calculation whereas the subsequent
interest expense is) and the higher administrative expenses in
1995. FAD decreased by $693,000 due to these same factors and
the higher level of tenant improvements and leasing commissions
in 1995. These expenditures are indicative of the Trust's
leasing activity and, over time, will decrease as the portfolio
occupancy stabilizes.
Nine Months Ended September 30, 1995 and 1994
The net loss of the Trust decreased by $775,000 when
comparing the first nine months of 1995 to the same period in
1994. This decrease resulted from the following: i) increased
net operating income from property operations as overall
occupancy and rental rates continued to improve; ii) a decrease
in Trust administrative expenses due primarily to the high level
of expenses related to contested proxy costs incurred in the
first nine months of 1994; iii) a decrease in depreciation and
amortization expense due to the sale of the Quadrant property in
February 1995; iv) the effect of the November 1994 financing and
the defeasance of the Trust's zero coupon notes; and, v) a loss
related to the sale of the Quadrant property in February 1995 and
the prepayment penalty associated with the payoff of a mortgage
loan in May 1995.
FFO for the nine months ended September 30, 1995 decreased
by $536,000 from the same period in 1994 as a result of the
November 1994 financing (the amortization of the original issue
discount on the zero coupon notes in 1994 is not included in the
FFO calculation whereas the subsequent interest expense is), the
increase in net operating income of the properties and the
decrease in Trust administrative expenses. FAD for the nine
months ended September 30, 1995 was $78,000 lower than the year
earlier period due to these same factors and the higher level of
tenant improvements and leasing commissions in 1994. These
expenditures are indicative of the Trust's leasing activity and,
over time, will decrease as the portfolio occupancy stabilizes.
The overall occupancy of the Trust's portfolio on September
30, 1995 was 95%. On a same property basis, overall occupancy
increased to 95% at September 30, 1995 from 92% a year earlier.
Same property revenue increased by 6.4% and net operating income
increased by 9.9% when comparing the nine months ended September
30, 1995 to the same period in 1994. The increase in net
operating income resulted from increased revenues due to
improving occupancy and rental rates, as well as a slight
decrease in operating expenses.
Liquidity and Capital Resources
At September 30, 1995, the Trust had approximately $7.2
million in unrestricted cash reserves. These reserves could be
decreased significantly should the Trust elect to purchase
additional real estate properties or effect a refinancing or
reduction of existing debt, including the unsecured debt
described below. The Trust intends to continue efforts to
recapitalize its debt structure and, should such an opportunity
materialize, the Trust may seek to retire existing debt
obligations with proceeds from secured debt financings, property
sales, cash on hand or a combination of these sources. Such a
transaction could require the Trust to utilize significantly all
of its unrestricted cash reserves.
As more fully described in Part II, Item 1. Legal
Proceedings, the Trust is currently involved in litigation with
its unsecured noteholder. Effective June 13, 1995, the
noteholder declared the entire principal amount of $45,239,000
and accrued interest immediately due and payable and began
accruing interest on the outstanding principal amount at the
default rate of 11.7%. Although management disagrees with the
imposition of the default rate by the noteholder based on the
circumstances resulting in the litigation, generally accepted
accounting principles require that the Trust accrue interest at
the default rate. Management intends to vigorously defend
against the actions of the defendants and believes that the
Trust's claims will ultimately be resolved favorably to the
Trust. However, there is no assurance as to the ultimate
resolution of this litigation. Accordingly, in the event that
the loan is determined to be immediately due and payable, and is
not ultimately modified or restructured through the favorable
resolution of the litigation or otherwise, the Trust will be
forced to consider such action as it deems necessary to protect
the interests of the Trust and its shareholders, including
seeking protection under applicable bankruptcy laws. The costs
of pursuing this litigation and defending against the actions of
the defendants are expected to be significant and could adversely
affect the Trust's resources and liquidity. The Trust has
entered into negotiations with MLI regarding the settlement of
the litigation, including the purchase by the Trust of the
unsecured notes payable held by MLI at a discount. There can be
no assurance that the Trust will be able to consummate a purchase
of the notes with MLI or otherwise effect a settlement of this
litigation.
Based upon the Trust's current liquidity, and in view of the
improving performance of the Trust's properties, the Trust
declared a $0.04 distribution payable on October 23, 1995 to
shareholders of record on October 12, 1995. Future distributions
will be evaluated on a quarterly basis.
The initial capitalization of the Trust included
$179,698,000 face amount at maturity of Zero Coupon Notes due
1997 (the "Notes") secured by first or second liens on all of the
Trust's properties. In November 1994, the Trust completed a
$14,500,000 refinancing of two properties. The proceeds of this
refinancing were used to partially in-substance defease a portion
of the outstanding Notes. This partial defeasance resulted in
the release to the Trust of approximately $7.1 million in
restricted funds previously held by the Trustee as well as the
release of the liens securing the Notes which encumbered the
Trust's properties. At September 30, 1995, the face amount at
maturity and the accreted value of the defeased Notes were
$16,365,000 and $12,727,000, respectively.
Capitalized improvements and leasing commissions were
$793,000 for the nine months ended September 30, 1995 as compared
to $1,251,000 for the same period in 1994. This decrease is
primarily related to the significant increase in overall
occupancy which occurred during the first nine months of 1994.
In August 1995, the Trust purchased a 72,000 square foot
warehouse/distribution property in Arlington, Texas for $1.3
million. The Trust expects an initial unleveraged yield in
excess of 12% on this property.
At September 30, 1995, the Trust had $17,632,000 in mortgage
debt outstanding. Of this amount, $1,945,000 represented
variable rate financing (with a weighted average interest rate of
10.75%) and $15,687,000 represented fixed rate financing (with a
weighted average interest rate of 8.85%).
PART II. OTHER INFORMATION
Item 1.Legal Proceedings.
On May 1, 1995, the Trust filed a lawsuit against The
Manufacturers Life Insurance Company ("MLI") in the 134th
Judicial District Court in Dallas, Texas. The suit alleges that
MLI, which on April 21, 1995, had declared the Trust in default
for non-monetary violations of the Note Purchase Agreement, had
breached the Note Purchase Agreement between MLI and the Trust
and had unlawfully sought to coerce the Trust into relinquishing
certain of its rights. Specifically, the suit alleges that MLI
and certain other entities had engaged in acts of bad faith and
conspiracy in an attempt to force the Trust to consent to the
transfer of the notes to a third party.
On May 26, 1995, a First Amended Petition, Application for
Declaratory Judgment, and Application for Injunctive Relief was
filed, naming Fidelity Management and Research Company, Fidelity
Galileo Fund L.P., Belmont Capital Partners II, L.P., Fidelity
Puritan Trust, and Fidelity Management Trust Company (together,
the "Fidelity Entities") as additional defendants.
On June 26, 1995, a Second Amended Petition, Application for
Declaratory Judgment, and Application for Injunctive Relief was
filed, specifying damages to the Trust of up to $20,000,000, plus
an unspecified amount for punitive damages.
On October 3, 1995, The Manufacturers Life Insurance Company
(U.S.A.), Inc. ("MLI-USA") intervened in the lawsuit asserting
ownership of one of the notes. On the same day, MLI and MLI-USA
filed counterclaims against the Trust seeking recovery of all
amounts due under the notes. On October 19, 1995, the Trust
filed answers to these counterclaims.
On October 18, 1995, MLI filed an Application for Temporary
Restraining Order and Injunctions in the lawsuit, seeking to
enjoin the Trust from paying a scheduled dividend to its
shareholders on October 23, 1995. On October 20, 1995, the
court, after hearing argument, denied MLI's Application.
On October 19, 1995, a Third Amended Petition, Application
for Declaratory Judgment, and Application for Injunctive Relief
was filed by the Trust, stating that MLI had wrongfully declared
a default and wrongfully accelerated the maturity of the notes.
The Trust has entered into negotiations with MLI regarding
the settlement of the litigation, including the purchase by the
Trust of the unsecured notes payable held by MLI at a discount.
There can be no assurance that the Trust will be able to
consummate a purchase of the notes with MLI or otherwise effect a
settlement of this litigation.
Item 3.Defaults Upon Senior Securities.
Reference is made to Item 3., Defaults Upon Senior
Securities, in the Trust's Form 10-Q for the period ending June
30, 1995. As of September 30, 1995, the Trust has $45,239,000 in
principal indebtedness to MLI and approximately $3,744,000 of
accrued interest thereon. The accrued interest reflects a
default rate of 11.7% effective June 13, 1995.
Item 6.Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
27.1 (filed herewith) Financial Data Schedule
(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.
AMERICAN INDUSTRIAL PROPERTIES REIT
(Registrant)
Date: November 2, 1995 /s/ MARC A. SIMPSON
Marc A. Simpson,
Vice President and Chief Financial Officer
(principal accounting and financial
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 7918
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 102343
<DEPRECIATION> 22810
<TOTAL-ASSETS> 90223
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 908
0
0
<OTHER-SE> 20692
<TOTAL-LIABILITY-AND-EQUITY> 90223
<SALES> 0
<TOTAL-REVENUES> 8831
<CGS> 0
<TOTAL-COSTS> 11181
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (191)
<INTEREST-EXPENSE> 4690
<INCOME-PRETAX> (2596)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2596)
<DISCONTINUED> 0
<EXTRAORDINARY> (55)
<CHANGES> 0
<NET-INCOME> (2596)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> (.29)
</TABLE>
