<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 2O549
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, 1998 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-16097
BAYOU INTERNATIONAL, LTD.
(Exact name of Registrant as specified in its charter)
Delaware 98-0079697
(State or other jurisdiction of (IRS Employer
incorporation or organisation) Identification No.)
210 Kings Way, South Melbourne, Victoria, 3205 Australia
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 0ll (613) 9234 1100
Securities registered pursuant to Section 12(b) of the Act :
Title of each class Name of each exchange
on which registered
N/A N/A
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.15 per share
(Title of Class)
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 the past 90 days.
Yes /X/ No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the restraint has filed all documents and reports
required to be filed by Section 12,13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. There were 46,941,789
outstanding shares of Common Stock as of September 30, 1998.
1
<PAGE> 2
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRODUCTION TO INTERIM FINANCIAL STATEMENTS.
The interim financial statements included herein have been prepared by
Bayou International, Ltd. (the "Company") without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (The "Commission").
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These interim financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1998.
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of September 30, 1998 and September 30, 1997, the results of
its operations for the three month periods ended September 30, 1998 and
September 30, 1997, and the changes in its cash flows for the three-month
periods ended September 30, 1998 and September 30, 1997, have been included. The
results of operations for the interim periods are not necessarily indicative of
the results for the full year.
The results of the Company's operations for the three months ended
September 30, 1998 were effected by the sale, on July 8, 1998 of the Company's
sole operating subsidiary, Solmecs Corporation N.V. ("Solmecs"), in exchange for
an approximate 24% interest in the acquiror. The results of operations of
Solmecs are presented in the consolidated financial statements as discontinued
operations. The results for previous periods have been restated accordingly.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION
PRESENTED IS IN AUSTRALIAN DOLLARS.
2
<PAGE> 3
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Consolidated Balance Sheets
September 30, 1998, June 30, 1998
and September 30, 1997
(in Australian Dollars)
(000's omitted)
(Unaudited)
<TABLE>
<CAPTION>
Sept 30 June 30 Sept 30
1998 1998 1997
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash 1 1 1
Accounts Receivable, net -- -- --
Investments -- -- --
------- ------- -------
Total Current Assets 1 1 1
------- ------- -------
Other Assets:
Investments 4,516 4,516 --
Property and Equipment, net -- -- --
Goodwill, net -- -- --
Organisational Costs, net 1 1 --
------- ------- -------
Total Other Assets 4,517 4,517 --
------- ------- -------
Total Assets 4,518 4,518 1
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-Term Notes -- -- --
Accounts Payable and
Accrued Expenses 221 229 153
------- ------- -------
Total Current Liabilities 221 229 153
------- ------- -------
Long-Term Debt 3,740 3,585 3,219
Net Liabilities of Discontinued Operations -- -- 426
------- ------- -------
Total Liabilities 3,961 3,814 3,798
Stockholders' Equity (Deficit):
Common Stock: $0.20 par value
100,000,000 shares authorized,
46,941,789 issued and outstanding 9,388 9,388 9,388
less Treasury Stock at cost, 50,000 shares, (20) (20) --
Additional Paid-in-Capital 11,592 11,592 11,592
Cumulative Translation Adjustments (1,989) (1,989) (697)
Retained Deficits (18,414) (18,267) (24,080)
------- ------- -------
Total Stockholders' Equity (Deficit) 557 704 (3,797)
------- ------- -------
Total Liabilities and Stockholders' Equity 4,518 4,518 1
======= ======= =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
3
<PAGE> 4
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Consolidated Statements of Operations
Three Months Ended September 30, 1998, Year ended June 30, 1998
and Three Months Ended September 30, 1997
(000's omitted)
(in Australian Dollars)
(Unaudited)
<TABLE>
<CAPTION>
3 Months Year 3 Months
Ended Ended Ended
Sept 30 June 30 Sept 30
1998 1998 1997
-------- ------- --------
<S> <C> <C> <C>
Revenues -- -- --
------- ------- -------
Costs and Expenses:
Interest Expense 77 290 68
Legal, Accounting & Professional 15 145 29
Administrative 55 109 14
------- ------- -------
147 544 111
------- ------- -------
Loss from Operations (147) (544) (111)
Gain on disposal of Subsidiary -- 5,899 --
Foreign Currency Exchange Gain (Loss) -- 1,381 247
------- ------- -------
-- 7,280 247
------- ------- -------
Profit (Loss) before Income Tax (147) 6,736 136
Provision for Income Tax -- -- --
------- ------- -------
Net Profit (Loss) from Continuing Operations (147) 6,736 136
Discontinued Operations
Net Loss from Discontinued Operations -- (952) (165)
------- ------- -------
Net Profit (Loss) (147) 5,784 (29)
======= ======= =======
Earnings Per Common Equivalent Share
From Continued Operations .00 0.14 .00
From Discontinued Operations .00 (0.02) .00
------- ------- -------
Total .00 0.12 .00
------- ------- -------
Weighted Number of Common Equivalent Shares Outstanding 46,942 46,942 46,942
======= ======= =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
4
<PAGE> 5
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
September 30, 1998 and June 30, 1998,
September 30, 1997 and June 30, 1997,
and September 30, 1996, and June 30, 1996.
(in Australian Dollars)
(000's omitted)
(Unaudited)
<TABLE>
<CAPTION>
Cumulative Retained
Common Stock Treasury Stock Paid-In- Translation Earnings
Shares Amount at Cost Capital Adjustment (Deficit)
<S> <C> <C> <C> <C> <C> <C>
Balance June 30, 1996 46,942 9,388 -- 11,592 (70) (22,791)
Net Income three months
ending 9-30-96 -- -- -- -- -- (374)
Foreign Currency Translation -- -- -- -- 30 --
----------------------------------------------------------------------------------
Balance September 30, 1996 46,942 9,38 -- 11,592 (40) (23,165)
Net Income nine months
ending 6-30-97 -- -- -- -- -- (886)
Foreign Currency Translation -- -- -- -- (395) --
----------------------------------------------------------------------------------
Balance June 30, 1997 46,942 9,388 -- 11,592 (435) (24,051)
Net Income three months
ending 9-30-97 -- -- -- -- -- (29)
Foreign Currency Translation -- -- -- -- (262) --
----------------------------------------------------------------------------------
Balance September 30, 1997 46,942 9,388 -- 11,592 (697) (24,080)
Net Income nine
months ending 6-30-1998 -- -- -- -- -- 5,813
Foreign Currency Translation -- -- (1,292) --
Acquisition of Treasury Stock,
at cost, 50,000 shares -- -- (20) -- -- --
----------------------------------------------------------------------------------
Balance June, 30, 1998 46,942 9,388 (20) 11,592 (1,989) (18,267)
Net Income three
months ending 9-30-1998 -- -- -- -- -- (147)
----------------------------------------------------------------------------------
Balance September 30, 1998 46,942 9,388 (20) 11,592 (1,989) (18,414)
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
5
<PAGE> 6
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Three Months Ended September 30, 1998
Year Ended June 30, 1998 and Three
Months Ended September 30, 1997
(in Australian Dollars)
(000's omitted)
(Unaudited)
<TABLE>
<CAPTION>
3 Months Year 3 Months
Ended Ended Ended
Sept 30 June 30 Sept 30
1998 1998 1997
-------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) from Continuing Operations (147) 6,736 136
Adjustments:
Foreign Currency Translation -- (1,554) (262)
(Gain) Loss on Disposition of Assets -- (5,899) --
Change Net of Effects of Subsidiary -- -- --
Acquisitions:
Accounts Receivable -- -- --
A/P and Accrued Liabilities (8) 89 (6)
------ ------ ------
Net Cash Provided (Used) in Continuing Operations (155) (628) (132)
Net Cash Provided by (Used In) Discontinued Operations -- 63 (87)
------ ------ ------
Net Cash Provided by (Used In) Operating Activities (155) (565) (219)
------ ------ ------
CASH FLOW FROM INVESTING ACTIVITIES:
Investments in Treasury Stock -- (20) --
Investments in Subsidiary -- (1) --
------ ------ ------
Net Cash Provided (Used) in Investing Activities -- (21) --
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing from Affiliates 155 586 219
New Borrowing -- -- --
------ ------ ------
Net Cash Provided by Financing Activities 155 586 219
------ ------ ------
Net Increase (Decrease) in Cash -- -- --
Cash at Beginning of Year 1 1 1
------ ------ ------
Cash at End of Year 1 1 1
====== ====== ======
Supplemental Disclosures:
Common Stock Issued in Lieu of
Debt Repayment -- -- --
Paid (Net Capitalized) 77 290 68
Income Tax Paid -- -- --
</TABLE>
6
<PAGE> 7
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1998, June 30, 1998 and
September 30, 1997
(1) ORGANIZATION
Bayou International, Ltd. (Bayou) is incorporated in the State of Delaware.
The principal shareholder of Bayou is Edensor Nominees Proprietary Limited
("Edensor"), an Australian
corporation. Edensor owned 42.7% of Bayou as of
September 30, 1998.
Bayou acquired a controlling interest on September 3, 1987 in former
subsidiary, Solmecs Corporation N.V. ("Solmecs") and 100% ownership on
January 2, 1992. Bayou sold its interest in Solmecs effective June 5, 1998.
During fiscal 1998, Bayou incorporated a further subsidiary, Bayou
Australia Pty Ltd, under the laws of Australia. Bayou Australia Pty Ltd has
not traded at September 30, 1998.
(2) ACCOUNTS RECEIVABLE
Accounts Receivable at September 30,1998, June 30, 1998 and September 30,
1997 includes:
<TABLE>
<CAPTION>
(in Australian Dollars)
(000's omitted)
Sept 30 June 30 Sept 30
1998 1998 1997
<S> <C> <C> <C>
Miscellaneous Receivables -- -- --
Less Allowance for
Doubtful Account -- -- --
Net -- -- --
(3) INVESTMENT SECURITIES
The following is a summary of Investment Securities
at September 30, 1998, June 30, 1998 and September 30, 1997:
Investment, Cost Method 4,516 4,516 --
Trading Securities:
Marketable Equity
Securities, at cost -- -- --
Gross Unrealized Gains -- -- --
Gross Unrealized Losses -- -- --
Marketable Equity Securities,
at fair value 4,516 4,516 --
</TABLE>
The investment using this cost method is carried at cost. Dividends
received from the investment carried at cost are included in other income.
Dividends received in excess of the Company's proportionate share of
accumulated earnings ("return of capital dividend") are applied as a
reduction of the cost of the investment.
7
<PAGE> 8
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1998, June 30, 1998 and
September 30, 1997
(4) PROPERTY
Property at September 30, 1998, June 30, 1998 and September 30, 1997
includes:
<TABLE>
<CAPTION>
(in Australian Dollars)
(000's omitted)
Sept 30 June 30 Sept 30
1998 1998 1997
<S> <C> <C> <C>
Office Furniture & Equipment -- -- --
Motor Vehicles -- -- --
----- ----- -----
Less Accumulated Depreciation -- --
----- ----- -----
(5) SHORT TERM AND LONG TERM DEBT
The following is a summary of Bayou's borrowing arrangements as of
September 30, 1998, June 30, 1998 and September 30, 1997.
Long-Term
Loan from corporations affiliated with the President of Bayou. Interest
accrues at the ANZ Banking Group Limited rate + 1% for overdrafts over
$100,000. Repayment of loan not required before June 30, 1999. 3,740 3,585 3,219
Total Long-Term 3,740 3,585 3,219
Short-Term
Overdraft arrangement with
balance accruing interest -- -- --
Notes Payable - Affiliates -- -- --
Total Short-Term -- -- --
Total 3,740 3,585 3,219
</TABLE>
8
<PAGE> 9
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1998, June 30, 1998 and
September 30, 1997
(6) AFFILIATE TRANSACTIONS
Bayou advances to and receives advances from various affiliates. All
advances between consolidated affiliates are eliminated on consolidation.
At September 30, 1998, Bayou had no outstanding advances to or from
unconsolidated affiliated companies. $197,000, $171,000 and $163,000 of
accounts payable for the years shown is due to an affiliated management
company.
(7) GOING CONCERN
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplates continuation of Bayou as a going concern. However, Bayou
sustained recurring losses. In addition, Bayou has no net working capital,
which raises substantial doubts as to its ability to continue as a going
concern.
Bayou anticipates that it will be able to defer repayment of certain of its
short term loan commitments until it has sufficient liquidity to enable
these loans to be repaid or other arrangements to be put in place.
In addition Bayou has historically relied on loans and advances from
corporations affiliated with the President of Bayou. Based on discussions
with these affiliate companies, Bayou believes this source of funding will
continue to be available.
Other than the arrangements noted above, Bayou has not confirmed any other
arrangements for ongoing funding. As a result Bayou may be required to
raise funds by additional debt or equity offerings in order to meet its
cash flow requirements during the forthcoming year.
(8) SALE OF SOLMECS
Pursuant to a stock purchase agreement dated as of June 5, 1998, the
Company acquired 499,701 shares in SCNV Acquisition Corp ("SCNV"),
representing approximately 24% of the issued and outstanding share capital
of SCNV, in return for the whole of the share capital of Solmecs
Corporation N.V., a Netherlands Antilles company which prior to the
exchange was formerly a wholly owned subsidiary of the Company. The 499,701
shares has been valued at US$2,800,000 or A$4,516,000 and will be accounted
for using the cost method because the Company does not exercise significant
influences over SCNV's operating and financial activities (see note 4). The
sale resulted in a gain of $5,899,000 which is included in other income.
SCNV is a Delaware corporation established May 1997 to select, develop and
commercially exploit proprietary technologies, in various stages of
development, invented primary by scientists who have been recently
immigrated to Israel from and by scientists and institutions in Russia and
other countries that formerly comprised the Soviet Union. Simultaneously
with the SCNV stock acquisition by the Company, SCNV completed an initial
public offering of common stock and warrants which resulted in gross
proceeds of approximately US$5,900,000.
The Company has been granted certain demand and "piggyback" registration
rights with respect to the SCNV shares. Notwithstanding the foregoing, the
Company has agreed not to sell, grant options for sale of assign or
transfer any of the SCNV shares, for a period of 24 months from the closing
of
the ("Lock-up") agreement, provided, however, that under certain
circumstances, the Company shall have the right to distribute the SCNV
shares pro rata to its stockholders and provide further that the recipients
will take such shares subject to the remaining term of the lock-up. The
Company does not currently have any plans to distribute the SCNV shares of
its stockholders.
The sale of Solmecs Corporation N.V. has been accounted for in the
consolidated financial statements as discontinued operations for all
periods presented. The assets and liabilities of discontinued operations as
of September 30, 1997 and June 30, 1998, have been combined and reflected
in the accompanying balance sheet as net liabilities of discontinued
operations.
9
<PAGE> 10
BAYOU INTERNATIONAL, LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1998, June 30, 1998 and
September 30, 1997
(8) SALE OF SOLMECS (CONTINUED)
The following is a summary of net assets and results of operations of
Solmecs Corporation N.V. as of September 30, 1997 and June 30, 1998 and for
the periods then ended.
<TABLE>
<CAPTION>
A$000 A$000'S
JUNE 30, SEPTEMBER 30,
1998 1997
<S> <C> <C>
Cash 7 61
Accounts receivable 167 71
Property and equipment, net 185 49
------ ------
TOTAL ASSETS 359 181
------ ------
Accounts payable and
Accrued Expenses 1,399 329
Long-term Debt 8,521 7,335
------ ------
NET ASSETS (9,561) (7,483)
------ ------
Sales 83 6
Cost and Expenses 1,035 177
------ ------
Loss before Income Tax (952) (171)
Income Taxes -- --
------ ------
NET PROFIT (LOSS) (952) (171)
------ ------
</TABLE>
(9) INCOME TAXES
Bayou files its income tax returns on an accrual basis. Bayou has carry
forward losses of approximately US$14 million as of June 30, 1998 which
expire in the years 1999 through 2012. Due to the uncertainty as to
realization of these losses, no benefit has been recorded.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FUND COSTS CONVERSION
The consolidated statements of income and other financial and operating data
contained elsewhere herein and the consolidated balance sheets and financial
results have been reflected in Australian dollars unless otherwise stated.
The following table shows the average rate of exchange of the Australian dollar
as compared to the US dollar during the periods indicated:
3 months ended Sept 30, 1997 A$1.00 = U.S. $0.7196
3 months ended Sept 30, 1998 A$1.00 = U.S. $0.5930
RESULTS OF OPERATION
THREE MONTHS ENDED SEPTEMBER 30, 1998 VS. THREE MONTHS ENDED SEPTEMBER 30, 1997.
Cost and expenses increased from A$111,000 for the three months ended September
30, 1997 to A$147,000 for the three months ended September 30, 1998. The
increase is a net result of:
a) an increase in interest expense from A$68,000 for the three months
ended September 30, 1997 to A$77,000 for the three months ended
September 30, 1998 due to the increased level of borrowings.
b) a decrease in legal, accounting and professional from A$29,000 for the
three months ended September 30, 1997 to A$15,000 for the three months
ended September 30, 1998 as a result of the finalisation of the sale
of Solmecs.
c) the increase in administrative costs from A$14,000 in the three months
ended September 30, 1997 to A$55,000 in the three months ended
September 30, 1998 primarily due to the costs in obtaining shareholder
approval to the sale of Solmecs.
As a result of the foregoing the loss from operations amounted to A$147,000 for
the three months ended September 30, 1998 compared to A$111,000 for the three
months ended September 30, 1997.
The Company incurred a foreign exchange gain of A$247,000 for the three months
ended September 30, 1997 and had no comparative amount in the three months ended
September 30, 1998. All of the Company's loan accounts were denominated in U.S.
dollars. However, the loans were foregiven as part of the sale of Solmecs during
fiscal 1998.
Solmecs incurred a loss of A$165,000 during the three months ended September
30,1997 with no comparable amount in the current period.
The Company incurred a net loss of A$147,000 for the end three months ended
September 30, 1998 compared to a loss of A$29,000 for the three months ended
September 30, 1997.
11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998 the Company had short term obligations of A$221,000
comprising accounts payable and accrued expenses and has a long term debt of
A$3,740,000 to Chevas Pty Ltd of which the President and the Chief Executive
Officer of the Company Mr. J I Gutnick is a Director.
The Company anticipates that it will be able to defer repayment of certain of
its short term loan commitments until it has sufficient liquidity to enable
these loans to be repaid which there can be no assurance. In addition the
Company has historically relied upon loans and advances from affiliates to meet
a significant portion of the Company's cash flow requirements which the Company
believes based on discussions with such affiliates will continue to be available
during fiscal 1999.
Other than the arrangements above the Company has not confirmed any further
arrangements for ongoing funding. As a result the Company may be required to
raise funds from additional debt or equity offerings and/or increase the
revenues from operations in order to meet its cash flow requirements during the
forthcoming year.
CAUTIONARY SAFE HARBOR STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
Certain information contained in this Form 10-Q is forward looking information
within the meaning of the Private Securities Litigation Act of 1995 (the "Act")
which became law in December 1995. In order to obtain the benefits of the "safe
harbor" provisions of the act for any such forwarding looking statements, the
Company wishes to caution investors and prospective investors about significant
factors which among others have affected the Company's actual results and are in
the future likely to affect the Company's actual results and cause them to
differ materially from those expressed in any such forward looking statements.
This Form 10-Q report contains forward looking statements relating to future
financial results. Actual results may differ as a result of factors over which
the Company has no control including the strength of the domestic and foreign
economies, slower than anticipated completion of research and development
projects and movements in the foreign exchange rate. Additional information
which could affect the Company's financial results is included in the Company's
Form 10-K on file with the Securities and Exchange Commission.
12
<PAGE> 13
PART II
Item 1. LEGAL
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company did not file any Report on Form 8-K during the three
months ended September 30, 1998.
13
<PAGE> 14
(FORM 10-Q)
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 thereinto duly authorised.
BAYOU INTERNATIONAL, LTD.
By: /s/ Joseph Isaac Gutnick
---------------------------------
Joseph Isaac Gutnick
President
Dated: December 16, 1998 By: /s/ Peter James Lee
---------------------------------
Peter James Lee
Director, Secretary and Chief
Financial Officer
(Principal Financial Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM 10-Q OF BAYOU INTERNATIONAL, LTD FOR THE QUARTER ENDED SEPTEMBER 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> AUSTRALIAN DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> .5930
<CASH> 1
<SECURITIES> 4,516
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,518
<CURRENT-LIABILITIES> 221
<BONDS> 3,740
0
0
<COMMON> 9,388
<OTHER-SE> (8,831)
<TOTAL-LIABILITY-AND-EQUITY> 4,518
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 70
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77
<INCOME-PRETAX> (147)
<INCOME-TAX> (0)
<INCOME-CONTINUING> (147)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (147)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
