U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act of 1934
For the transition period from to
Commission file number 1-9224
HELMSTAR GROUP, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 13-2689850
- ----------------------------------------- ------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2 World Trade Center, Suite 2112, New York, N.Y. 10048
---------------------------------------------------------------------------
(Address of Principal Executive Offices)
212-775-0400
(Issuer's Telephone Number, Including Area Code)
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 each of the issuer's classes of
common equity, as of the latest practicable date.
The number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at July 31, 1998
----- ----------------------------
Common stock - par value $.10 5,513,373 shares
<PAGE>
PART I
FINANCIAL INFORMATION
Item l. Financial Statements.
The following consolidated financial statements of Helmstar Group, Inc.
and subsidiaries (collectively referred to as the "Company," unless the context
requires otherwise) are prepared in accordance with the rules and regulations of
the Securities and Exchange Commission for Form 10-QSB and reflect all
adjustments (consisting of normal recurring accruals) and disclosures which, in
the opinion of management, are necessary for a fair statement of results for the
interim periods presented. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company's Form 10-KSB for the fiscal year ended December 31, 1997, which was
filed with the Securities and Exchange Commission.
The results of operations for the three months and six months ended
June 30, 1998 are not necessarily indicative of the results to be expected for
the entire fiscal year.
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents ................ $ 761,788 $ 802,352
Short term investments ................... 61,147,618 71,174,934
Marketable securities .................... 7,595,830 7,234,862
Joint ventures ........................... 118,411 185,864
Land ..................................... 9,117,495
Construction in progress ................. 136,058 11,000
Deferred financing costs, less
accumulated amortization of
$47,932 in 1998 and $11,000
in 1997 .............................. 1,679,419 1,663,209
Furniture, equipment and
leasehold improvements - at cost,
less accumulated depreciation and
amortization of $256,673 in
1998 and $242,565 in 1997 ............ 105,196 106,128
Other assets ............................. 493,646 640,403
------------ ------------
TOTAL ........................... $ 81,155,461 $ 81,818,752
============ ============
LIABILITIES
Bonds payable ............................ $ 72,750,000 $ 72,750,000
Accrued expenses and other
liabilities .......................... 1,087,845 1,509,201
Income taxes payable ..................... 103,965 59,737
------------ ------------
Total liabilities ............... 73,941,810 74,318,938
------------ ------------
Due to preferred member .................. 750,000 750,000
------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1998 1997
------------ ------------
(Unaudited)
STOCKHOLDERS' EQUITY
<S> <C> <C>
Common stock - authorized
10,000,000 shares, par value
$.10; issued 6,749,600 shares ........ 674,960 674,960
Paid-in surplus .......................... 14,984,510 14,984,510
(Accumulated deficit) .................... (6,264,891) (5,981,058)
------------ ------------
Total ........................... 9,394,579 9,678,412
Less treasury stock, at cost -
1,236,227 shares in 1998 and
1,233,227 shares in 1997 ............. (2,930,928) (2,928,598)
------------ ------------
Total stockholders' equity ...... 6,463,651 6,749,814
------------ ------------
TOTAL ........................... $ 81,155,461 $ 81,818,752
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements (Unaudited).
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1998 1997 1998 1997
(Restated) (Restated)
<S> <C> <C> <C> <C>
Revenues:
(Loss) profit from
joint ventures ................. $ (59,155) $ 176,933 $ 9,527 $ 363,851
Financial consulting fees ....... 90,000
Interest income ................. 1,067,469 76,450 2,129,152 105,010
Investment income (loss) ........ 796,274 (491,164) 913,503 53,400
----------- ----------- ----------- -----------
Total revenues ............. 1,804,588 (237,781) 3,052,182 612,261
----------- ----------- ----------- -----------
Expenses:
Compensation and related costs .. 289,609 299,126 573,878 628,746
Occupancy cost .................. 47,193 41,850 87,369 83,451
General and administrative ...... 85,353 138,255 182,098 236,073
Professional fees ............... 90,000 74,177 128,027 89,197
Interest ........................ 1,155,373 69,619 2,340,706 69,619
----------- ----------- ----------- -----------
Total Expenses ............. 1,667,528 623,027 3,312,078 1,107,086
----------- ----------- ----------- -----------
Income (loss) from continuing
operations before taxes ......... 137,060 (860,808) (259,896) (494,825)
(Benefit) provision for
income taxes .................... (22,008) (6,764) 23,937 3,016
----------- ----------- ----------- -----------
Income (loss) from
continuing operations ........... 159,068 (854,044) (283,833) (497,841)
Loss from operations of
discontinued subsidiary ......... (286,928) _ (602,857)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ................... $ 159,068 $(1,140,972) $ (283,833) $(1,100,698)
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(continued)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1998 1997 1998 1997
(Restated) (Restated)
<S> <C> <C> <C> <C>
Per common share - basic and diluted:
Income (loss) from
continuing operations ........... $ .03 $ (.16) $ (.05) $ (.09)
(Loss) from discontinued operations . _ (.05) _ (.11)
----------- ----------- ----------- -----------
Net income (loss) ................... $ .03 $ (.21) $ (.05) $ (.20)
=========== =========== =========== ===========
Weighted average number of
common shares outstanding - basic 5,514,373 5,516,373 5,515,376 5,525,542
Effect of dilutive employee
stock options ................... 60,000
----------- ----------- ----------- -----------
Weighted average number of
common shares - diluted
income (loss) per share ......... 5,554,373 5,516,373 5,515,376 5,525,542
=========== =========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements (Unaudited).
The three and six month periods for 1997 have been restated to reflect the
results of a Company's subsidiary as a discontinued operation.
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
----------------------------
1998 1997
(Restated)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ..................................... $(283,833) $(1,100,699)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
Depreciation and amortization ....................... 14,106 24,065
Unrealized (gain) from joint ventures
and other investments .............................. (9,527) (363,851)
Provision for loan reserve .......................... 50,000
Changes in operating assets and liabilities:
Decrease in other assets ........................... 146,757 396,212
(Purchase) of marketable securities - net .......... (360,968) (1,853,318)
Increase (decrease) in accrued expenses ............ (377,128) 215,803
Decrease in assets and liabilities of
disposed subsidiary ............................... 1,102,857
------------ ------------
Net cash (used in) operating activities ................. (870,593) (1,528,931)
------------ ------------
Cash flows from investing activities:
Sale of investment securities - net ................... 10,027,316
Distributions from joint ventures and other investments 76,980 1,700,000
Purchase of other investments ......................... (35,000)
Purchase of land ...................................... (9,117,495)
Increase in construction in progress .................. (125,058)
Increase in deferred financing costs .................. (16,210)
Purchase of fixed assets .............................. (13,174) (41,398)
Loan to debtor in possession .......................... (50,000)
------------ ------------
Net cash provided by investing activities ............... 832,359 1,573,602
------------ ------------
Cash flows from financing activities:
Purchase of treasury stock ............................ (2,330) (15,774)
------------ ------------
Net cash (used in) financing activities ................. (2,330) (15,774)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .... (40,564) 28,897
Cash and cash equivalents at beginning of period ........ 802,352 165,858
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .............. $ 761,788 $ 194,755
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
----------------------------
1998 1997
(Restated)
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ............................................ $ 1,968,698 $ 69,619
Taxes ............................................... 39,718 688
</TABLE>
See Notes to Condensed Consolidated Financial Statements (Unaudited).
The six month period for 1997 has been restated to reflect the results of a
Company's subsidiary as a discontinued operation.
<PAGE>
HELMSTAR GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
l. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company are set forth in the
notes to the Company's financial statements included in its Form 10-KSB, for the
fiscal year ended December 3l, 1997, which was filed with the Securities and
Exchange Commission (the "SEC"). With respect to interest incurred during the
construction period, the Company capitalizes such cost ($77,126) for the six
month period ended June 30, 1998.
2. INCOME (LOSS) PER SHARE
Income (loss) per share is based on the weighted average number of
common shares outstanding and common stock equivalents based on the treasury
stock method when dilutive.
3. LITIGATION
The Company is a defendant in various lawsuits. The ultimate outcome of
the lawsuits cannot presently be determined, and no provision for any liability
that may result has been made in the financial statements, since the amounts, if
any, cannot be determined. See Part II, Item 1.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Statements of Operations for the prior period has
been restated to reflect the results of the Company's
subsidiary, Citizens Mortgage Service Company, as a
discontinued operation.
During the quarter ended June 30, 1998, Helmstar
formed a new wholly-owned subsidiary. An internet website will
be used to provide placement services for skilled technology
specialists and project/term consulting services for
corporations. The subsidiary will also provide information
technology management consulting, special project management
and corporate tax/outsourcing services.
A. Three Months Ended June 30, 1998 Compared
with Three Months Ended June 30, 1997
Total revenues increased to $1,804,588 for the three
months ended June 30, 1998 from a negative $237,781 for the
three months ended June 30, 1997.
Profit from joint ventures decreased to a loss of
$59,155 for the three months ended June 30, 1998 from a profit
of $176,933 for the three months ended June 30, 1997,
primarily as a result of the sale of the outlet shopping malls
during the fourth quarter of 1997 by two partnerships in which
the Company has a majority financial interest. The loss for
the current quarter represents final adjustments per the terms
of the sales contract and a provision for local taxes.
Financial consulting fees were nil for the both the
three months ended June 30, 1998 and the three months ended
June 30, 1997. Although providing financial structuring advice
to clients on a fee basis remains an integral component of the
Company's merchant banking business, significant variations in
revenues are likely because of the transactional nature of
this business. The Company currently is engaged in advising
clients with respect to the structuring of transactions which
are expected to generate fees later in 1998.
Interest income increased to $1,067,469 for the three
months ended June 30, 1998 from $76,450 for the three months
ended June 30, 1997, primarily due to interest earned on the
net proceeds from the $72,750,000 bond offering, pending
application of the proceeds for acquiring land and
constructing multiplex movie theaters pursuant to its
agreement with Carmike Cinemas, Inc., and on the securities
held in the cash management and investing activities of the
Company.
Investment income increased to $796,274 for the three
months ended June 30, 1998 compared to a loss of $491,164 for
the three months ended June 30, 1997. This category
principally consists of net income or loss from cash
management and investing in futures, puts, calls, equities,
municipal securities, and other securities activities.
<PAGE>
Total expenses increased to $1,667,528 for the three
months ended June 30, 1998 from $623,027 for the three months
ended June 30, 1997, primarily due to interest paid on the net
proceeds from the $72,750,000 bond offering made by the
Company.
Compensation and related costs decreased to $289,609
for the three months ended June 30, 1998 from $299,126 for the
three months ended June 30, 1997.
Occupancy costs increased to $47,193 for the three
months ended June 30, 1998 from $41,850 for the three months
ended June 30, 1997.
General and administrative expenses decreased to
$85,353 for the three months ended June 30, 1998 from $138,255
for the three months ended June 30, 1997, primarily due to a
reserve for bad debt recorded in the quarter ended June 30,
1997.
Professional fees increased to $90,000 for the three
months ended June 30, 1998 from $74,177 for the three months
ended June 30, 1997. The increase is due in large part to
increased legal expenses incurred for the quarter ended June
30, 1998.
Interest expense increased to $1,155,373 for the
three months ended June 30, 1998 from $69,619 for the three
months ended June 30, 1997, due to interest paid on the net
proceeds of the $72,750,000 bond offering made by the Company.
On a pre-tax basis, from continuing operations the
Company had income of $137,060 for the three months ended June
30, 1998 compared with a loss of $860,808 for the three months
ended June 30, 1997. Provision for income taxes for the three
months ended June 30, 1998 increased to a benefit of $22,008
compared to a benefit of $6,764 for the three months ended
June 30, 1997. The current provision consists solely of state
and local taxes for the current period and an adjustment for
the prior period. For Federal income tax purposes, as of
December 31, 1997, the Company had net operating loss
carryforwards of approximately $7,300,000 available to reduce
future taxable income. These carryforwards expire in the years
2005 through 2011. The Company has a net capital loss
carryforward of approximately $3,400,000 which will expire in
2002.
The Company's net income for the three months ended
June 30, 1998 was $159,068 compared with a net loss of
$1,140,972 for the three months ended June 30, 1997. For the
three months ended June 30, 1998, net income from continuing
operations was $.03 per share. For the three months ended June
30, 1997, net loss from continuing operations was $.16 per
share increased by a net loss from discontinued operations of
$.05 per share, resulting in a loss of $.21 per share. The
Company adopted Statements of Financial Accounting Standards
No. 128 in 1997 and has retroactively applied the effects
thereof to the quarter ended June 30, 1997. Statement No. 128
<PAGE>
replaces the calculation of primary and fully diluted earnings
per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes
any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. The
number of shares used in the computations were 5,554,373 for
the three months ended June 30, 1998 and 5,516,373 for the
three months ended June 30, 1997.
Six Months Ended June 30, 1998 Compared
with Six Months Ended June 30, 1997
Total revenues increased to $3,052,182 for the six
months ended June 30, 1998 from $612,261 for the six months
ended June 30, 1997.
Profit from joint ventures decreased to $9,527 for
the six months ended June 30, 1998 from $363,851 for the six
months ended June 30, 1997, primarily as a result of the sale
of the outlet shopping malls during the fourth quarter of 1997
by two partnerships in which the Company has a majority
financial interest. The income for the six month period ended
June 30, 1998 represents percentage rents collected during the
period, but attributable to a prior period per the terms of
the sales contract and a provision for local taxes.
Financial consulting fees were nil for the six months
ended June 30, 1998 versus $90,000 for the six months ended
June 30, 1997. Although providing financial structuring advice
to clients on a fee basis remains an integral component of the
Company's merchant banking business, significant variations in
revenues are likely because of the transactional nature of
this business. The Company currently is engaged in advising
clients with respect to the structuring of transactions which
are expected to generate fees later in 1998.
Interest income increased to $2,129,152 for the six
months ended June 30, 1998 from $105,010 for the six months
ended June 30, 1997. This increase was primarily due to
interest earned on the net proceeds from the $72,750,000 bond
offering, pending application of the proceeds for acquiring
land and constructing multiplex movie theaters pursuant to its
agreement with Carmike Cinemas, Inc., and on the securities
held in the cash management and investing activities of the
Company.
Investment income increased to $913,503 for the six
months ended June 30, 1998 from $53,400 for the six months
ended June 30, 1997. This category principally consists of net
profit or loss from cash management and investing in futures,
puts, calls, equities, municipal securities and other
securities activities.
Total expenses increased to $3,312,078 for the six
months ended June 30, 1998 from $1,107,086 for the six months
ended June 30, 1997, primarily due to interest paid on the
proceeds of the $72,750,000 bond offering made by the Company.
<PAGE>
Compensation and related costs decreased to $573,878
for the six months ended June 30, 1998 from $628,746 for the
six months ended June 30, 1997, primarily due to discretionary
bonuses paid in the first six months of 1997.
Occupancy costs increased to $87,369 for the six
months ended June 30, 1998 from $83,451 for the three months
ended June 30, 1997.
General and administrative expenses decreased to
$182,098 for the six months ended June 30, 1998 from $236,073
for the six months ended June 30, 1997, primarily due to a
reserve for bad debt recorded for the quarter ended June 30,
1997.
Professional fees increased to $128,027 for the six
months ended June 30, 1998 from $89,197 for the six months
ended June 30, 1997. The increase is due in large part to
increased legal expenses incurred for the quarter ended June
30, 1998.
Interest expense increased to $2,340,706 for the six
months ended June 30, 1998 from $69,619 for the six months
ended June 30, 1997, due to interest paid on the proceeds of
the $72,750,000 bond offering made by the Company.
On a pre-tax basis, from continuing operations, the
Company had a loss of $259,896 for the six months ended June
30, 1998 compared with a loss of $494,825 for the six months
ended June 30, 1997. Provision for income taxes for the six
months ended June 30, 1998 was $23,937 compared with $3,016
for the six months ended June 30, 1997. These provisions
consist solely of state and local taxes. For Federal income
tax purposes, as of December 31, 1997, the Company has net
operating loss carryforwards aggregating approximately
$7,300,000 available to reduce future taxable income. These
carryforwards expire in the years 2005 through 2011. The
Company has a net capital loss carryforward of approximately
$3,400,000.
The Company's net loss for the six months ended June
30, 1998 was $283,833 compared with a net loss of $1,100,698
for the six months ended June 30, 1997. On a per share basis,
the net loss from continuing operations was $.05 for the six
months ended June 30, 1998, compared with a net loss from
continuing operations of $.09 increased by a net loss from
discontinued operations of $.11 resulting in a loss of $.20
per share for the six months ended June 30, 1997. Average
common shares outstanding used for the primary computation of
net loss per common share were 5,515,376 in 1998 and 5,525,542
in 1997. Common share equivalents relating to the Company's
Incentive Compensation Plan were not included in the
computation because the effect of their inclusion would be
antidilutive for the six months ended June 30, 1998.
<PAGE>
B. Liquidity and Capital Resources
Management of the Company believes that funds
generated from operations, supplemented by its available
assets, will provide it with sufficient resources to meet all
present and reasonably foreseeable future capital needs.
Currently, the Company's assets consist primarily of cash and
investments which are readily convertible into cash.
The Company invests excess funds in liquid,
short-term financial instruments in order to maximize its
current cash return with minimum interest rate risk, while
preserving the ability to move quickly in funding attractive
merchant banking ventures. Such investments include U.S.
Government and municipal obligations, futures contracts and
money market funds.
On November 20, 1997, the Company issued $72,750,000
of adjustable rate tender securities due November 1, 2015 (the
"Bonds"). The Bonds were issued to finance 97% of the cost of
developing and/or acquiring state-of-the-art multiplex movie
theaters in various states throughout the continental United
States. The 3% balance, $2,250,000, is being provided as a
capital contribution from Preferred Members (shareholders) of
the Company's Lessor subsidiary, Movieplex Realty Leasing,
L.L.C. $772,500 of this capital was contributed during the
fourth quarter of 1997.
The Bonds pay interest from the date of delivery on
the first Monday of each month for the preceding four or five
week period commencing January 5, 1998 and principal annually
on the first Monday of November commencing in the year 2000.
Various commercial banks which provided letters of credit
securing payment on the Bonds are due letter of credit ("LOC")
fees which are payable on the same dates as the Bond interest
and also commence in 1998. In addition, a preferred return on
capital contributed is due to the Preferred Members, payable
on the same due dates as is the interest on the Bonds but
commencing in January of the year 2000.
All debt service on the Bonds, while bank letters of
credit are effectively in force, is paid directly from draws
on those LOCs. The banks are then reimbursed by the Lessor.
Fees and the Preferred return are due from the Lessor
directly. During the period from November 1997 through
November 1999, all reimbursements to the banks and bank fees
will be paid from Bond proceeds. Thereafter, all
reimbursements to the banks for debt service on the Bonds as
well as fees and the preferred return to Preferred Members
will be paid from the Rents which commence on December 1,
1999. In addition, the Rents will cover all other costs of
owning and operating the real estate other than Federal, state
or local income taxes due on a net income basis. Prior to the
utilization of these proceeds to pay for the costs in
connection with the construction of the multiplex movie
theaters, they will be invested in liquid short-term
instruments.
<PAGE>
While the Company believes that currently available
funds will provide it with sufficient resources to meet all
present and reasonably foreseeable future capital needs, the
Company may seek various forms of credit in order to finance
its merchant banking or other activities in the future. The
Company does not have any material commitments for capital
expenditures as of June 30, 1998, except for the development
of the multiplex movie theaters with funds provided by the
issuance of the Bonds.
The Company is a defendant in various lawsuits. An
unfavorable result in certain of those lawsuits could have a
significant adverse effect upon the Company's liquidity and
capital resources.
Year 2000 Issue
The Company does not anticipate that the cost of
addressing the "Year 2000" issue will be material to its
future operating results or financial condition.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Cross Creek Village v. Housing Authority of the
County of Riverside, et al., Case No. 236813, Superior Court
of the State of California, County of Riverside, July 9, 1993.
Pursuant to an Order dated April 14, 1998, the
Superior Court dismissed this case without prejudice, and
ordered that the applicable statute of limitations are tolled
for a period of three years from the date of dismissal.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: A statement regarding the computation of per
share earnings is omitted because the computation is
described in Note 2 of the Notes to Condensed Consolidated
Financial Statements (Unaudited) of this Form 10-QSB.
Exhibit 27 - Financial Data Schedule -- See below.
(b) Reports on Form 8-K:
-- The Company did not file any reports on Form 8-K
during the three months ended June 30, 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HELMSTAR
GROUP, INC. AND SUBSIDIARIES' CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE INTERIM
PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 761,788
<SECURITIES> 68,743,448
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 361,869
<DEPRECIATION> 256,673
<TOTAL-ASSETS> 81,155,461
<CURRENT-LIABILITIES> 0
<BONDS> 72,750,000
0
0
<COMMON> 674,960
<OTHER-SE> 5,788,691
<TOTAL-LIABILITY-AND-EQUITY> 81,155,461
<SALES> 0
<TOTAL-REVENUES> 3,052,182
<CGS> 0
<TOTAL-COSTS> 971,372
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,340,706
<INCOME-PRETAX> (259,896)
<INCOME-TAX> 23,937
<INCOME-CONTINUING> (283,833)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (283,833)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
