================================================================================
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 March 31, 1997
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 0-17651
HIGH CASH PARTNERS, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3347257
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 West Putnam Avenue Greenwich, CT 06830
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 862-7000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by checkmark 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>
HIGH CASH PARTNERS, L.P.
FORM 10-Q - MARCH 31, 1997
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS - March 31, 1997 and December 31, 1996 ...................
STATEMENTS OF OPERATIONS - For the three months
ended March 31, 1997 and 1996 .....................................
STATEMENT OF PARTNERS' EQUITY - For the three months
ended March 31, 1997...............................................
STATEMENTS OF CASH FLOWS - For the three months
ended March 31, 1997 and 1996 .....................................
NOTES TO FINANCIAL STATEMENTS ...........................................
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ..............................
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K ..................................
SIGNATURES......................................................................
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
HIGH CASH PARTNERS, L.P.
BALANCE SHEETS
March 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Real estate, net .......................... $15,875,005 $22,465,506
Cash and cash equivalents ................. 1,793,547 1,774,565
Tenant receivables ........................ 78,929 78,929
Other assets .............................. 80,157 93,509
Prepaid real estate taxes ................. 58,600 --
Prepaid insurance premiums ................ 52,255 73,394
----------- -----------
$17,938,493 $24,485,903
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Mortgage loan payable ..................... $ 6,500,000 $ 6,500,000
Deferred interest payable ................. 9,636,150 9,191,865
Accounts payable and accrued expenses ..... 110,760 125,520
Due to affiliates ......................... 78,466 78,817
Tenants' security deposits payable ........ 55,259 55,259
Distributions payable ..................... -- 305,007
----------- -----------
Total liabilities ...................... 16,380,635 16,256,468
Commitments and contingencies
Partners' equity
Limited partners' equity (as restated)
(96,472 units issued and outstanding) .. 15,568 82,284
General partners' equity (as restated) .... 1,542,290 8,147,151
----------- -----------
Total partners' equity ................. 1,557,858 8,229,435
----------- -----------
$17,938,493 $24,485,903
=========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIGH CASH PARTNERS, L.P.
STATEMENTS OF OPERATIONS
For the three months ended
March 31,
-----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Revenues
Rental income ......................... $ 621,177 $ 596,658
Interest income ....................... 13,711 10,968
Other income .......................... -- 751
----------- -----------
634,888 608,377
----------- -----------
Costs and expenses
Write-down for impairment ............. 6,475,500 --
Mortgage loan interest ................ 444,285 397,323
Operating ............................. 156,051 144,829
Depreciation and amortization ......... 121,736 120,735
Partnership management fees ........... 75,369 75,369
Property management fees .............. 18,569 18,290
Administrative ........................ 14,955 36,463
----------- -----------
7,306,465 793,009
----------- -----------
Net loss ................................... $(6,671,577) $ (184,632)
=========== ===========
Net loss attributable to
Limited partners ...................... $(6,604,861) $ (182,786)
General partners ...................... (66,716) (1,846)
----------- -----------
$(6,671,577) $ (184,632)
=========== ===========
Net loss per unit of limited partnership
interest (96,472 units outstanding) ... $ (68.46) $ (1.89)
=========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIGH CASH PARTNERS, L.P.
STATEMENT OF PARTNERS' EQUITY
General Limited Total
Partners' Partners' Partners'
Equity Equity Equity
----------- ----------- -----------
<S> <C> <C> <C>
Balance, January 1, 1997 ............. $ (157,887) $ 8,387,322 $ 8,229,435
Reallocation of partners' equity ..... 240,171 (240,171) --
----------- ----------- -----------
Balance, January 1, 1997 (as restated) 82,284 8,147,151 8,229,435
Net loss for the three months ended
March 31, 1997 ................... (66,716) (6,604,861) (6,671,577)
----------- ----------- -----------
Balance, March 31, 1997 .............. $ 15,568 $ 1,542,290 $ 1,557,858
=========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the three months ended
March 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
INCREASE (DECREASE0 IN CASH AND
CASH EQUIVALENTS
Net loss ........................................ $(6,671,577) $ (184,632)
Adjustments to reconcile net loss to net cash
provided by operating activities
Write-down for impairment ............... 6,475,500 --
Deferred interest expense ............... 444,285 397,323
Depreciation and amortization ........... 121,736 120,735
Changes in assets and liabilities
Tenant receivables ......................... -- 13,011
Other assets ............................... 6,617 (9,294)
Prepaid real estate taxes .................. (58,600) --
Prepaid insurance premiums ................. 21,139 (32,803)
Accounts payable and accrued expenses ...... (14,760) (8,359)
Due to affiliates .......................... (351) 78,474
Tenants' security deposits payable ......... -- (402)
----------- -----------
Net cash provided by operating activities 323,989 374,053
----------- -----------
Cash flows from investing activities
Additions to real estate ........................ -- (7,085)
----------- -----------
Cash flows from financing activities
Distributions to partners ....................... (305,007) (305,007)
----------- -----------
Net increase in cash and cash equivalents ........ 18,982 61,961
Cash and cash equivalents, beginning of period ... 1,774,565 1,407,276
----------- -----------
Cash and cash equivalents, end of period ......... $ 1,793,547 $ 1,469,237
=========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
1 INTERIM FINANCIAL INFORMATION
The summarized financial information contained herein is unaudited;
however, in the opinion of management, all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of such
financial information have been included. The accompanying financial
statements, footnotes and discussions should be read in conjunction
with the financial statements, related footnotes and discussions
contained in the High Cash Partners, L.P. (the "Partnership") annual
report on Form 10-K for the year ended December 31, 1996. The results
of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the full year.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Leases
The Partnership accounts for its leases under the operating method.
Under this method, revenue is recognized as rentals become due, except
for stepped leases where revenue is averaged over the life of the
lease.
Depreciation
Depreciation is computed using the straight-line method over the useful
life of the property, which is estimated to be 40 years. The cost of
the property represents the initial cost of the property to the
Partnership plus acquisition and closing costs. Repairs and maintenance
are charged to operations as incurred.
Write-down for impairment
A write-down for impairment is recorded based upon a quarterly review
of the property in the Partnership's portfolio. Real estate property is
carried at the lower of depreciated cost or estimated fair value. In
performing this review, management considers the estimated fair value
of the property based upon the undiscounted future cash flows, as well
as other factors such as the current occupancy, the prospects for the
property and the economic situation in the region where the property is
located. Because this determination of estimated fair value is based
upon future economic events, the amounts ultimately realized upon a
disposition may differ materially from the carrying value.
A write-down is inherently subjective and is based upon management's
best estimate of current conditions and assumptions about expected
future conditions. The Partnership may provide for write-downs in the
future and such write-downs could be material.
In performing its quarterly impairment review of the Sierra property,
management determined that the aggregate undiscounted cash flows from
the property over the anticipated holding period were below its net
carrying value at March 31, 1997 and therefore, an impairment existed.
An internal analysis of the fair value of the property indicated an
<PAGE>
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
estimated fair value of approximately $15,875,000. Consequently, a
write-down for impairment of $6,475,500 was recorded as of March 31,
1997. A write-down for impairment was not required for the three months
ended March 31, 1996.
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Managing General Partner of the Partnership, Resources High Cash,
Inc., was until November 3, 1994, a wholly-owned subsidiary of
Integrated, at which time, pursuant to the consummation of Integrated's
Plan of Reorganization, substantially all the assets of Integrated, but
not the stock of the Managing General Partner, were sold to Presidio
Capital Corp. ("Presidio"). Presidio is also the parent of other
corporations that are, or may be in the future, engaged in businesses
that may be in competition with the Partnership. Accordingly, conflicts
of interest may arise between the Partnership and such other
businesses.
Effective April 1, 1991, Integrated purchased, in an arms-length
transaction from an unaffiliated third party, 8,361 limited partnership
units. Effective January 1, 1995 pursuant to the consummation of
Integrated's Plan of Reorganization, these units were transferred to
Presidio, XRC Corp. ("XRC").
Wexford Management LLC ("Wexford") performs management and
administrative services to XRC and its direct and indirect subsidiaries
as well as the Partnership. During the three months ended March 31,
1997 and 1996, reimbursable expenses due to Wexford from the
Partnership amounted to $6,727 and $20,000, respectively. Wexford
performs similar services for other entities which may be in
competition with the Partnership.
Subject to the rights of the Limited Partners under the Limited
Partnership Agreement, XRC controls the Partnership through its
ownership of the shares of the Managing General Partner and, as of
February 28, 1995, Presidio controls the Associate General Partner. XRC
is managed by Presidio Management Company, LLC ("Presidio Management"),
a company controlled by a director of Presidio and XRC. Presidio
Management is responsible for the day to day management of XRC and,
among other things, has authority to designate directors of the
Managing General Partner. In March 1996, Presidio Management assigned
its agreement for the day-to-day management of XRC to Wexford.
As a result of the consummation of Integrated's Plan of Reorganization,
XRC elected new directors for the Managing General Partner and
Resources Supervisory Management Corp. ("Resources Supervisory").
However, certain executives remain the same and certain of Integrated's
former employees who performed services for the Partnership are now
employees of Wexford, which provides administrative services to XRC and
the Partnership.
<PAGE>
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
Affiliates of the General Partners are also engaged in businesses
related to the acquisition and operation of real estate. An affiliated
partnership, Resources Accrued Mortgage Investors 2 L.P. ("RAM 2"),
whose managing general partner is also owned by Presidio, made a zero
coupon first mortgage loan to the Partnership and conflicts of interest
could arise with respect to such loan.
The Partnership has entered into a supervisory management agreement
with Resources Supervisory, an affiliate of the Managing General
Partner, to perform certain functions related to the management of the
property. A portion of the property management fees payable to
Resources Supervisory were paid to an unaffiliated management company
which was engaged for the purpose of performing the management
functions for the property. For the quarters ended March 31, 1997 and
1996, Resources Supervisory was entitled to receive $18,569 and
$18,290, respectively, of which $15,471 and $15,185, respectively, was
paid to the unaffiliated management company. No leasing activity
compensation was paid to Resources Supervisory for the quarter ended
March 31, 1997 or 1996. Current fees of $3,097 were payable to
Resources Supervisory at March 31, 1997, which were paid in the
subsequent quarter.
For managing the affairs of the Partnership, the Managing General
Partner is entitled to receive a partnership management fee in an
annual amount equal to 1.25% of the gross offering proceeds. For the
quarters ended March 31, 1997 and 1996, the Managing General Partner
was entitled to a partnership management fee of $75,369. Current fees
of $75,369 were payable to the Managing General Partner at March 31,
1997, which were paid in the subsequent quarter.
The general partners are allocated 1% of the net income or losses of
the Partnership which amounted to losses of $66,716 and $1,846 in the
quarters ended March 31, 1997 and 1996, respectively. They are also
entitled to receive 1% of distributions which amounted to $3,050 for
the quarter ended March 31, 1996.
4 REAL ESTATE
Real estate is summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Land ............................... $ 6,667,189 $ 8,868,859
Building and improvements .......... 12,791,547 17,065,377
------------ ------------
19,458,736 25,934,236
Accumulated depreciation ........... (3,583,731) (3,468,730)
------------ ------------
$ 15,875,005 $ 22,465,506
============ ============
</TABLE>
<PAGE>
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
5 DISTRIBUTIONS PAYABLE
Distributions payable are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------- --------
<S> <C> <C>
Limited partners ..................... $ -- $301,957
General partners ..................... -- 3,050
-------- --------
$ -- $305,007
======== ========
</TABLE>
6 PARTNERS' EQUITY
The General Partners hold a 1% equity in the interest in the
Partnership. However, at the inception of the Partnership, the General
Partners' equity account was credited with only the actual capital
contributed in cash, $1,000. The Partnership's management determined
that this accounting does not appropriately reflect the Limited
Partners' and the General Partners' relative participations in the
Partnership's net assets, since it does not reflect the General
Partners' 1% equity interest in the Partnership. Thus, the Partnership
has restated its financial statements to reallocate $240,171 (1% of the
gross proceeds raised at the Partnership's formation) of the partners'
equity to the General Partners' equity account. This reallocation was
made as of the inception of the Partnership and all periods presented
in the financial statements have been restated to reflect the
reallocation. The reallocation has no impact on the Partnership's
financial position, results of operations, cash flows, distributions to
partners, or the partners' tax basis capital accounts.
7 DUE TO AFFILIATES
Due to affiliates are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------- -------
<S> <C> <C>
Partnership Management Fee ................. $75,369 $75,369
Supervisory Management Fee ................. 3,097 3,448
------- -------
$78,466 $78,817
======= =======
</TABLE>
Such amounts were paid during May 1997 and February 1997, respectively.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The General Partners hold a 1% equity in the interest in the
Partnership. However, at the inception of the Partnership, the General
Partners' equity account was credited with only the actual capital
contributed in cash, $1,000. The Partnership's management determined
that this accounting does not appropriately reflect the Limited
Partners' and the General Partners' relative participations in the
Partnership's net assets, since it does not reflect the General
Partners' 1% equity interest in the Partnership. Thus, the Partnership
has restated its financial statements to reallocate $240,171 (1% of the
gross proceeds raised at the Partnership's formation) of the partners'
equity to the General Partners' equity account. This reallocation was
made as of the inception of the Partnership and all periods presented
in the financial statements have been restated to reflect the
reallocation. The reallocation has no impact on the Partnership's
financial position, results of operations, cash flows, distributions to
partners, or the partners' tax basis capital accounts.
The Partnership's sole property is a community shopping center located
in Reno, Nevada containing approximately 233,000 square feet of net
rentable area. The Partnership's public offering commenced on June 29,
1988 and, as of its termination on June 29, 1990, had accepted
subscriptions for 77,891 Units (not including Units held by the initial
limited partner) for aggregate proceeds of $17,282,066 (gross proceeds
of $19,472,750 less organization and offering costs aggregating
$2,190,684). The Partnership committed 100% of its net proceeds
available for investment to the Sierra Marketplace acquisition. In
addition, pursuant to a settlement agreement, on December 19, 1990 the
Partnership settled all claims with respect to its Short-Term Loans. As
a part of this transaction, the Partnership sold 18,571 unregistered
units to Integrated for aggregate net proceeds of $4,120,441 (gross
proceeds of $4,642,750 less organization and offering costs aggregating
$522,309) who in turn, sold these units to the Partnership's three bank
creditors. On February 4, 1991, Integrated purchased all of the 8,361
units owned by one of the banks. This transfer became effective on
April 1, 1991. Effective January 1, 1995, pursuant to the consummation
of Integrated's bankruptcy, these units were transferred to XRC.
The Partnership uses working capital reserves set aside from the net
proceeds of its public offering and undistributed cash flow from
operations as its primary measure of liquidity. The Partnership's
working capital reserves initially consisted of 5% of the gross
proceeds from its public offering that were set aside. As of March 31,
1997, working capital reserves amounted to approximately $1,794,000
which may be used to fund capital expenditures, insurance, real estate
taxes, and distributions to partners. All expenditures made during the
quarter ended March 31, 1997 were funded from cash flow from
operations.
<PAGE>
Liquidity and Capital Resources (continued)
The Partnership's mortgage loan payable to RAM 2 contains a provision
which requires the Partnership to provide RAM 2 with a current
appraisal of the Sierra Property upon RAM 2's request. If it is
determined, based upon the requested appraisal, that the sum of (i) the
principal balance of the mortgage loan plus all other then outstanding
indebtedness secured by the property and (ii) all accrued and unpaid
interest in excess of 5% per annum of the principal balance of such
mortgages exceeds 85% of the appraised value, an amount equal to such
excess shall become immediately due and payable to RAM 2. RAM 2 has not
requested such appraisal during 1996 or the quarter ended March 31,
1997. However, the Partnership recorded a write-down on the property to
a fair value of approximately $15,875,000 as of March 31, 1997. Based
on such fair value, the Partnership has determined that the excess
interest described above will begin to become due to RAM 2 in December
1997. Consequently, the Partnership has declared no distribution
payable for the quarter ended March 31, 1997 and will not declare any
distribution for the foreseeable future in order to build up cash
reserves so that it will be in a position to pay any such excess
interest when it becomes due.
To the extent that adjusted cash from operations during the operating
years exceeds 11% per annum, noncumulative, of original contributions
of the offering, such excess may be retained in a separate reserve
account to prepay a portion of RAM 2's loan obligations. However, it is
unlikely that adjusted cash flow will exceed such a threshold in the
near future.
The Managing General Partner believes that cash flow from operations
combined with current working capital reserves will be sufficient to
fund future essential capital expenditures. A portion of capital
expenditures consists of capitalized lease procurement costs. Since the
level of leasing activity cannot be predicted with any degree of
certainty, the Partnership cannot accurately estimate capital
expenditures for the remainder of the year, but believes that its
existing reserves will be sufficient. However, the Partnership may not
have sufficient liquidity to make the payments which may be required
under the terms of the RAM 2 loan in certain circumstances.
Real estate market
The real estate market continues to suffer from the effects of the
recent recession which included a substantial decline in the market
value of existing properties. Furthermore, the competition for
non-anchor tenants is strong among existing centers in the Sierra
Marketplace vicinity. This has hindered the lease up of difficult back
space in Sierra Market Place. These factors may in the future reduce
rental rates. As a result, the Partnership's potential for realizing
the full value of its investment in its property is at increased risk.
Write-down for impairment
A write-down for impairment is recorded based upon a quarterly review
of the property in the Partnership's portfolio. Real estate property is
carried at the lower of depreciated cost or estimated fair value. In
performing this review, management considers the estimated fair value
of the property based upon the undiscounted future cash flows, as well
<PAGE>
Liquidity and Capital Resources (continued)
as other factors such as the current occupancy, the prospects for the
property and the economic situation in the region where the property is
located. Because this determination of estimated fair value is based
upon future economic events, the amounts ultimately realized upon a
disposition may differ materially from the carrying value.
A write-down is inherently subjective and is based upon management's
best estimate of current conditions and assumptions about expected
future conditions. The Partnership may provide for write-downs in the
future and such write-downs could be material.
In performing its quarterly impairment review of the Sierra property,
management determined that the aggregate undiscounted cash flows from
the property over the anticipated holding period were below its net
carrying value at March 31, 1997 and therefore, an impairment existed.
An internal analysis of the property indicated an estimated fair value
of approximately $15,875,000. Consequently, a write-down for impairment
of $6,475,500 was recorded as of March 31, 1997. A write-down for
impairment was not required for the three months ended March 31, 1996.
Results of operations
The net loss increased for the quarter ended March 31, 1997 compared to
the same period in 1996, primarily as a result of the write-down for
impairment recorded in 1997 on the Sierra property as discussed above.
Revenues increased for the quarter ended March 31, 1997 compared with
1996, primarily due to an increase in rental revenue, due to increased
rental rates at the Sierra property.
Costs and expenses increased for the quarter ended March 31, 1997
compared with the same period in 1996, primarily due to the write-down
for impairment recorded in 1997 and an increase in mortgage interest
expense, partially offset by a decrease in general and administrative
expense. Mortgage loan interest expense increased due to the
compounding effect from the deferral of the interest expense on the
zero coupon mortgage. General and administrative expense decreased as a
result of a decrease in payroll costs.
Inflation has not had a material impact on the Partnership's operations
or financial condition during the last two years and is not expected to
have a material impact in the future.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
<PAGE>
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.
HIGH CASH PARTNERS, L.P.
By: Resources High Cash, Inc.
Managing General Partner
Dated: May 15, 1997 By: /s/ Frederick Simon
-------------------
Frederick Simon
President
(Duly Authorized Officer)
Dated: May 15, 1997 By: /s/ Jay L. Maymudes
-------------------
Jay L. Maymudes
Vice President
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the financial
statements of the March 31, 1997 Form 10-Q of High Cash Partners, L.P. and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,793,547
<SECURITIES> 0
<RECEIVABLES> 78,929
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,063,488
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,938,493
<CURRENT-LIABILITIES> 189,226
<BONDS> 16,136,150
0
0
<COMMON> 0
<OTHER-SE> 1,557,858
<TOTAL-LIABILITY-AND-EQUITY> 17,938,493
<SALES> 0
<TOTAL-REVENUES> 634,888
<CGS> 0
<TOTAL-COSTS> 264,934
<OTHER-EXPENSES> 7,041,531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 444,285
<INCOME-PRETAX> (6,671,577)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,671,577)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,671,577)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
