SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-16886
Banyan Strategic Land Fund II
(Exact name of Registrant as specified in its charter)
Delaware 36-3465422
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 553-9800
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 .
Shares of common stock outstanding as of May 10, 1996: 9,936,421.
Transitional Small Business Disclosure Format: YES . NO X .
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BANYAN STRATEGIC LAND FUND II
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
1996 1995
ASSETS
Cash and Cash Equivalents $ 287,002 $ 549,309
Interest Receivable on
Investments --- 3,754
Interest Receivable on
Loans 71,940 59,470
Investment Securities --- 626,946
Loans Receivable 785,000 785,000
Foreclosed Real Estate
Held for Sale 11,554,425 11,700,657
Investment in Real Estate
Venture 7,216,197 7,122,492
Other Assets 859,340 822,592
------------ ------------
Total Assets $ 20,773,904 $ 21,670,220
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities
Accounts Payable and
Accrued Expenses $ 341,583 $ 630,500
Accrued Real Estate Taxes 33,228 ---
------------ ------------
Total Liabilities $ 374,811 $ 630,500
============ ============
Stockholders' Equity
Shares of Common Stock,
$0.01 Par Value,
50,000,000 Authorized,
19,266,268 Shares
Issued 170,927,133 170,927,133
Accumulated Deficit (134,673,833) (134,033,206)
Treasury Stock at Cost,
9,329,847 Shares (15,854,207) (15,854,207)
------------ ------------
Total Stockholders' Equity 20,399,093 21,039,720
------------ ------------
Total Liabilities and
Stockholders' Equity $ 20,773,904 $ 21,670,220
============ ============
Book Value Per Share of
Common Stock (9,936,421
Shares Outstanding) $ 2.05 $ 2.12
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
BANYAN STRATEGIC LAND FUND II
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
INCOME 1996 1995
Interest on Loans $ 12,469 $ 3,886
Income on Investments 1,481 39,521
----------- ------------
Total Income 13,950 43,407
----------- ------------
EXPENSES
Expenses From Property Operating
Activities:
Interest on Advances From
Affiliates --- 17,712
Net Loss From Operations of
Foreclosed Real Estate Held
for Sale 349,683 483,163
Net Loss From Operations of
Real Estate Venture 33,971 26,248
----------- ------------
Total Expenses From Property
Operating Activities 383,654 527,123
----------- ------------
Other Expenses:
Stockholder Expenses 20,522 39,330
Directors' Fees, Expenses and
Insurance 51,269 122,677
Other Professional Fees 45,561 314,202
General and Administrative 153,571 335,631
Recovery of Losses on Loans,
Notes and Interest
Receivable --- (23,277)
----------- ------------
Total Other Expenses 270,923 788,563
----------- ------------
Total Expenses 654,577 1,315,686
----------- ------------
Net Loss $(640,627) $ (1,272,279)
=========== ============
Net Loss Per Share of Common
Stock (Based on the Weighted
Average Number of Shares
Outstanding of 9,936,421
and 19,263,596, respectively) $ (0.06) $ (0.07)
=========== ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
<TABLE>
BANYAN STRATEGIC LAND FUND II
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<CAPTION>
Common Stock Accumulated Treasury
Shares Amount Deficit Stock Total
<S> <C> <C> <C> <C> <C>
Stockholders'
Equity,
December 31,
1995 19,266,268 $170,927,133 $(134,033,206) $(15,854,207) $21,039,720
Net Loss --- --- (640,627) --- (640,627)
----------- ------------ ------------ ------------ ------------
Stockholders'
Equity,
March 31,
1996 19,266,268 $170,927,133 $(134,673,833) $(15,854,207) $20,399,093
=========== ============ ============ ============ ===========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
BANYAN STRATEGIC LAND FUND II
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET LOSS $ (640,627) $(1,272,279)
Adjustments to Reconcile Net
Loss to Net Cash Used In
Operating Activities:
Recovery of Losses on Loans, Notes
and Interest Receivable --- (23,277)
Net Loss From Operations
of Real Estate Venture 33,971 26,248
Net Change In:
Interest Receivable on Investments 3,754 (92,982)
Interest Receivable on Loans (12,470) (5,783)
Other Assets (36,748) (36,369)
Accounts Payable and Accrued
Expenses (288,917) (104,569)
Accrued Real Estate Taxes 33,228 26,555
----------- -----------
Net Cash Used In Operating
Activities (907,809) (1,482,456)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from Sale of Investment
Securities 310,007 ---
Principal Payments on Investment
Securities 316,939 ---
Proceeds from the Sale of Fore-
closed Real Estate Held for Sale 146,232 21,500,434
Recovery of Losses on Loans, Notes
and Interest Receivable --- 23,277
Collection of Loan Receivable --- 16,000
Forfeited Proceeds from Sales
Contracts --- 28,824
Payment of Liabilities Assumed
at Foreclosure of Real Estate
Held for Sale --- (173,864)
Investments in Real Estate Venture (127,676) (2,652)
Payment to Affiliate --- (730,229)
----------- -----------
Net Cash Provided By Investing
Activities 645,502 20,661,790
----------- -----------
Net (Decrease) Increase in Cash and
Cash Equivalents (262,307) 19,179,334
Cash and Cash Equivalents at
Beginning of Period 549,309 290,366
----------- -----------
Cash and Cash Equivalents at
End of Period $ 287,002 $19,469,700
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
BANYAN STRATEGIC LAND FUND II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
Readers of this quarterly report should refer to Banyan Strategic Land
Fund II's (the "Fund's") audited consolidated financial statements for the year
ended December 31, 1995, which are included in the Fund's 1995 Annual Report and
Form 10-KSB for the year ended December 31, 1995, as certain footnote
disclosures which would substantially duplicate those contained in such audited
statements have been omitted from this report.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
the Fund and its wholly-owned subsidiaries and consolidated venture which hold
title to the Fund's properties. All intercompany balances and transactions have
been eliminated in consolidation. The Fund's 47% interest in the H Street
Assemblage is accounted for on the equity method as an investment in real estate
joint venture.
FINANCIAL STATEMENT PRESENTATION
Certain reclassifications have been made to the previously reported 1995
consolidated financial statements in order to provide comparability with the
1996 consolidated financial statements. These reclassifications have not
changed the 1995 results. In the opinion of management, all adjustments
necessary for a fair presentation have been made to the accompanying
consolidated financial statements as of March 31, 1996 and for the three months
ended March 31, 1996 and 1995.
2. FORECLOSED REAL ESTATE HELD FOR SALE
RANCHO MALIBU
Rancho Malibu is a 274-acre parcel of undeveloped land north of Malibu,
California. On July 1, 1992 a joint venture (the "Venture") between the Fund
and Banyan Mortgage Investment Fund ("BMIF") acquired title to the property
pursuant to a deed in lieu of foreclosure agreement. The Fund owns a 98.6%
general partner interest in the Venture while BMIF owns the remaining 1.4%
interest as a limited partner. The Venture's results are consolidated in the
accompanying financial statements.
From the acquisition date, the Venture has engaged in zoning and
entitlement activities which have been opposed by the City of Malibu. The city
initiated two separate legal actions intended to preclude the issuance of a
Coastal Development Permit, the most recent of which has been decided in favor
of the Venture and as to which the City of Malibu appealed. On December 5,
1995, the Court of Appeals of the State of California decided this appeal in
favor of the Fund and on January 4, 1996 a petition for rehearing was denied.
Concurrent with the aforementioned appeal, the Venture pursued
entitlements before the Board of Supervisors for the County of Los Angeles. In
August 1995, the Los Angeles County Regional Planning Commission, by a 3 to 2
vote, approved a revised plan to develop a fifty-one unit housing community on
the Rancho Malibu property. The Los Angeles County Regional Planning
Commission's approval was appealed to the Los Angeles County Board of
Supervisors. On January 23, 1996, the Los Angeles County Board of Supervisors
tentatively approved a compromise forty-six unit project. Final County approval
is anticipated to occur on May 14, 1996.
During the three months ended March 31, 1996, the Fund expended
approximately $328,000 relating to entitlement activities, holding costs and
litigation relating to Rancho Malibu. These costs were included in total
expenses from property operating activities on the Fund's consolidated
statements of income and expenses. As of March 31, 1996 and December 31, 1995,
the Fund's carrying value of the property is $9,961,992.
LAKE ROGERS
On February 15, 1996, the Fund sold the remaining 11 single family home
lots comprising the Lake Rogers property to a unaffiliated third party for
approximately $165,400. After prorations for closing costs of approximately
$19,400, the Fund received net proceeds of approximately $146,000 and recognized
a loss of approximately $77,300 which was reflected in the consolidated
statements of income and expenses for the year ended December 31, 1995. The
Fund had obtained ownership of the Lake Rogers property pursuant to a deed in
lieu of foreclosure settlement on its Westholme loans.
3. TRANSACTIONS WITH AFFILIATES
Administrative costs, primarily salaries and general and administrative
expenses, are reimbursed by the Fund to Banyan Management Corp. ("BMC"). These
costs are allocated to the Fund and other entities to which BMC provides
administrative services based upon the actual number of hours spent by BMC
personnel on matters related to that particular entity in relation to total BMC
personnel hours. The Fund's allocable share of costs for the three months ended
March 31, 1996 and 1995 aggregated $91,101 and $204,517, respectively. As one
of its administrative services, BMC serves as the paying agent for general and
administrative costs of the Fund. As part of providing this payment service,
BMC maintains a bank account on behalf of the Fund. At of March 31, 1996, the
Fund had a net receivable due from BMC of $288,774. The net receivable is
included in other assets in the Fund's Consolidated Balance Sheet.
4. SUBSEQUENT EVENT
Hemet Phase III is a land parcel which consists of 75 single family home
lots located in Hemet, California. On April 18, 1996, the Fund sold its
interest in the Hemet III property to an unaffiliated third party in exchange
for cash proceeds of approximately $100,000 and a $248,000 secured promissory
note (the "Note"). The Note bears interest at a fixed rate of 10% per annum and
requires monthly payments of interest. Upon the sale of each lot all cash
proceeds received from such sale will be paid to the Fund. Such payments shall
be applied first to any fees due, second to accrued and unpaid interest and
finally to the outstanding principal. Final payment of accrued interest and
outstanding principal balance of the Note is due and payable upon its maturity
of April 18, 1997. The Fund's carrying value for this property as of March 31,
1996 was approximately $342,000. The Fund had obtained ownership of the Hemet
III property pursuant to a deed in lieu of foreclosure settlement on its
Westholme loans.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
The Fund was originally established to invest primarily in short-term,
junior, predevelopment and construction mortgage loans. The borrowers
subsequently defaulted on these mortgage loan obligations, adversely affecting
the Fund. The Fund has ceased funding mortgage loans except where necessary to
protect the value of its assets acquired through foreclosure or otherwise. In
1990, the Fund implemented a Principal Recovery Plan designed to preserve its
assets and manage its properties acquired through foreclosure or otherwise until
they would be disposed of in an orderly manner. In addition, in 1990 the Fund
suspended distributions to stockholders due to its modest cash position and the
uncertainty regarding its remaining assets and the Fund's future cash
requirements. The Fund continues to focus on preserving and maximizing the
value of its assets, including managing and/or improving development rights
regarding such properties.
The Fund currently holds an ownership interest in a 274 acre land parcel
located in Southern California known as the Rancho Malibu property as well as
other smaller parcels of land located in California and Florida. In addition,
the Fund acquired a 47% partnership interest in the H Street Venture which holds
title to an approximately 55,900 square foot office building and an adjacent
land parcel containing 17,000 square feet located in Washington D.C. The Fund's
current loan portfolio consists of the Northholme Partners and Hemet III and IV
loans.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents consist of cash and short-term investments. The
Fund's cash and cash equivalents balance at March 31, 1996 and December 31, 1995
was $287,002 and $549,309, respectively. In addition, at December 31, 1995 the
Fund owned investment securities in the amount of $626,946. The decrease in
total cash, cash equivalents and investment securities of approximately $889,000
is primarily due to the payment of approximately $328,000 related to
entitlement, litigation and holding costs associated with the Rancho Malibu
property. Also contributing to this decrease in total cash, cash equivalents
and investment securities was an investment in real estate venture of $127,676
in respect of the Fund's interest in the H Street Venture and the payment of the
Fund's operating and other accrued expenses of approximately $655,000.
Partially offsetting these decreases was the receipt of net proceeds in the
amount of $146,232 received on February 15, 1996 resulting from the sale of the
Lake Rogers property. See Results of Operations below for further details.
The Fund's future liquidity needs are expected to be funded from cash
proceeds from the sale or any potential third party joint development of its
properties, collection of principal and interest on the Fund's loans receivable
and interest earned on the Fund's investment securities and short-term
investments. At the present time, the Fund's cash resources, as well as cash
anticipated to be generated from the sale of its various smaller land parcels
located in California and Florida which had collateralized the Fund's loans, is
anticipated to provide adequate liquidity to meet the Fund's operating expenses
plus the holding costs and operating expenses consistent with the Fund's
business plan for the H Street Assemblage, Rancho Malibu property and other
various land parcels acquired through foreclosure for the upcoming year. In the
event the Fund is unable to sell its various real estate assets, the Fund will
be required to seek additional sources of liquidity to meet its operational
needs.
As of March 31, 1996 and December 31, 1995, the Fund's mortgage loan
portfolio consisted of two loans with a carrying value totaling $785,000. For
the three months ended March 31, 1996, the Fund accrued interest on these loans
totalling approximately $12,500.
The Fund's ability to resume distributions to its stockholders is
dependent upon, among other things: (i) the Fund's ability to sell its
properties and the eventual sales price of these properties; (ii) operating
results of the Fund's properties; (iii) the Fund's ability to control its
operating expenses; and (iv) the general improvement of conditions in the real
estate markets where the Fund's properties or loan collateral are located.
RESULTS OF OPERATIONS
Total income for the three months ended March 31, 1996 decreased to
$13,950 from $43,407 for the three months ended March 31, 1995. This decrease
is due primarily to a decrease in income on investments. Income on investments
decreased due to a decrease in cash available for investment.
Total expenses for the three months ended March 31, 1996 decreased to
$654,577 from $1,315,686 for the three months ended March 31, 1995. This
decrease of approximately $661,000 for the three months ended March 31, 1996
when compared to the prior year's period is due primarily to decreases of
approximately $143,000 in total expenses from property operating activities and
approximately $518,000 in total other expenses. The decrease in total property
operating expenses is due to the elimination of interest expense on advances
from affiliates and a decrease in net loss from operations of foreclosed real
estate held for sale. Interest on advances from affiliates decreased due to the
Fund's repayment in 1995 of all outstanding advances from Banyan Strategic
Realty Trust relating to the H Street Venture. Net loss from operations of
foreclosed real estate held for sale decreased due to a reduction in legal and
entitlement costs relating to the Rancho Malibu property during the three months
ended March 31, 1996 as compared to the same period in 1995. The decrease in
total other expenses is due primarily to decreases in directors fees, expenses
and insurance, other professional fees and general and administration expenses.
Director's fees, expense and insurance decreased for the three months ended
March 31, 1996 as compared to the same period in 1995 due to a decrease in the
premium for insurance coverage of approximately $56,000 and a decrease in
director's fee and other compensation of approximately $10,000 as a result of a
decrease in the number of directors presiding on the Fund. Other professional
fees decreased since the legal costs incurred in 1995 relating to the Fund's Key
Biscayne litigation were nonrecurring. The decrease in general and
administrative expenses was due primarily to a decrease in expenses charged to
the Fund by its paying agent, BMC, and a decrease in administrative costs
associated with the Rancho Malibu litigation and entitlement activities.
During the three months ended March 31, 1996 and March 31, 1995, the Fund
recorded net losses of $33,971 and $26,248, respectively, from the operations of
the H Street Venture. Net loss from operations of real estate venture includes
the Fund's 47% interest in the real estate venture known as the H Street
Venture. The H Street Venture owns an approximately 55,900 square foot office
building (the "Victor Building") and an adjacent land parcel consisting of
17,000 square feet (the "H Street Assemblage") located in Washington, D.C. The
net loss at the H Street Assemblage remained relatively stable for the three
months ended March 31, 1996 as compared to the same period in 1995. The H
Street Venture completed and obtained the zoning, entitlement and historic
preservation rights for the development of an approximately 330,000 square foot
commercial building on the H Street site. The H Street Venture has not made any
significant capital expenditures on the H Street Assemblage and is allowing
occupancy to decline by selectively retenanting the Victor Building at the H
Street Assemblage with short term leases so that the building will be more
marketable to a potential buyer which would need to vacate the Victor Building
before its redevelopment. The H Street Venture is currently marketing the H
Street Assemblage for sale based upon its current assessment of the Washington
D.C. office market. The current market for the sale of undeveloped land where
the H Street Assemblage is located is currently limited because of the decline
in demand for commercial development sites in the Washington, D.C. market
resulting from the recent government decision to downsize various departments
and agencies and place a freeze on leasing of any additional office space.
Therefore, the H Street Venture currently anticipates its marketing efforts
could proceed slower than originally anticipated. The environment for the
Washington, D.C. office market is subject to modification based upon changes in
general business and economic conditions as well as risks associated with the
operations of real estate. The Venture will continue to try to find ways to
limit holding costs at the H Street Assemblage while attempting to find a
buyer.
On a quarterly basis, management reviews the mortgage loans in the Fund's
portfolio and records appropriate loss provisions. The provisions are based
upon a number of factors, including analysis of the value of the collateral and,
in certain cases, ongoing negotiations regarding disposition of this collateral,
as well as consideration of the general business conditions affecting the Fund's
portfolio. Management also reviews the investment properties held by the Fund
on a quarterly basis and, when it has been determined that a permanent
impairment in the value of a given property has occurred, the carrying value of
the property is then written down to its fair market value. Management has
determined that no reductions are necessary for the quarter ended March 31,
1996.
Rancho Malibu is a 274-acre parcel of undeveloped land north of Malibu,
California. On July 1, 1992 a joint venture (the "Venture") between the Fund
and Banyan Mortgage Investment Fund ("BMIF") acquired title to the property
pursuant to a deed in lieu of foreclosure agreement. The Fund owns a 98.6%
general partner interest in the Venture while BMIF owns the remaining 1.4%
interest as a limited partner.
From the acquisition date, the Venture has engaged in zoning and
entitlement activities which have been opposed by the City of Malibu. The city
initiated two separate legal actions intended to preclude the issuance of a
Coastal Development Permit, the most recent of which has been decided in favor
of the Venture and as to which the City of Malibu appealed. On December 5,
1995, the Court of Appeals of the State of California decided this appeal in
favor of the Fund and on January 4, 1996 a petition for rehearing was denied.
Concurrent with the aforementioned appeal, the Venture pursued entitlements
before the Board of Supervisors for the County of Los Angeles. In August 1995,
the Los Angeles County Regional Planning Commission, by a 3 to 2 vote, approved
a revised plan to develop a fifty-one unit housing community on the Rancho
Malibu property. The Los Angeles County Regional Planning Commission's approval
was appealed to the Los Angeles County Board of Supervisors. On January 23,
1996, the Los Angeles County Board of Supervisors tentatively approved a
compromise forty-six unit project. Final County approval is anticipated to
occur on May 14, 1996.
During the quarter ended March 31, 1996, the Fund expended approximately
$328,000 on Rancho Malibu relating to entitlement activities, holding costs and
litigation. These costs were included in total expenses from property operating
activities on the Fund's consolidated statements of income and expenses. As of
March 31, 1996 and December 31, 1995, the Fund's carrying value for its interest
in the Venture was $9,961,992.
On February 15, 1996, the Fund sold the remaining 11 single family home
lots comprising the Lake Rogers property to an unaffiliated third party for
approximately $165,400. After prorations for closing costs of approximately
$19,400, the Fund received net proceeds of approximately $146,000 and recognized
a loss of approximately $77,300 which has been reflected in the accompanying
consolidated statements of income and expenses for the year ended December 31,
1995.
The above discussed changes resulted in an decrease in the net loss for
the three months ended March 31, 1996 to $640,627 ($0.06 per share) from
$1,272,279 ($0.07 per share) for the three months ended March 31, 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are included with this Report.
(b) No Reports on Form 8-K were filed during the quarter ended March 31,
1996.
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.
BANYAN STRATEGIC LAND FUND II
By: /s/ Leonard G. Levine Date: May 10, 1996
Leonard G. Levine, President
By: /s/ Joel L. Teglia Date: May 10, 1996
Joel L. Teglia, Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"This schedule contains summary financial information extracted from
Banyan Strategic Land Fund II's Form 10-QSB for the quarter ended
March 31, 1996 and is qualified in its entirety by reference to
such Form 10-QSB".
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 287,002
<SECURITIES> 0
<RECEIVABLES> 856,940
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,143,942
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,773,904
<CURRENT-LIABILITIES> 374,811
<BONDS> 0
0
0
<COMMON> 20,399,093
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,773,904
<SALES> 0
<TOTAL-REVENUES> 13,950
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 654,577
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (640,627)
<INCOME-TAX> 0
<INCOME-CONTINUING> (640,627)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (640,627)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
