SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: March 31, 1998
Commission file number 0-16819
National Capital Management Corporation
(Exact name of registrant as specified in its charter)
Delaware 94-3054267
(State or other jurisdiction of (I.R.S Employer Identification Number)
incorporation or organization)
520 Madison Avenue New York NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 980-3883
Former name, former address and former fiscal year, if changed from last
report
-----------------------------------------------------------------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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
------------- ------------
Number of common shares outstanding as of March 31, 1998:
Common stock, $0.01 par value, 1,673,190 shares
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
FORM 10-QSB QUARTERLY REPORT
MARCH 31, 1998
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets as of March 31, 1998
(unaudited) and December 31, 1997 3
Consolidated Statements of Operations for the three
months ended March 31, 1998 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1998 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements(unaudited) 6-9
ITEM II. Management's Discussion and Analysis of
Financial Condition and
Results of Operations 10-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
-2-
<PAGE>
<TABLE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
<CAPTION>
March 31, December 31,
1998 1997
---------- ------------
ASSETS (Unaudited) (Audited)
------
<S> <C> <C>
Cash and cash equivalents $ 31,901 $ 56,035
Notes receivable 150,000 150,000
Property and equipment, less accumulated
depreciation of $74,148 and $71,958 at
March 31, 1998 and December 31, 1997,
respectively 30,683 32,873
Net assets of discontinued operations -
Real Estate Segment 1,782,988 1,795,030
Viatical Settlements Segment 35,519 25,528
Other assets 36,225 36,225
----------- -----------
Total assets $ 2,067,316 $ 2,095,691
=========== ===========
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<TABLE>
<S> <C> <C>
Accounts payable and accrued expenses $ 188,511 $ 103,299
Shareholders' equity:
Preferred stock, $0.01 par value,
3,000,000 shares authorized, no shares
issued and outstanding
Common stock, $0.01 par value, 6,666,666
shares authorized, 1,813,056 shares
issued, 1,673,190 outstanding 16,732 16,732
Additional paid-in capital 23,125,123 23,125,123
Accumulated deficit (21,088,833) (20,975,246)
Treasury stock, 139,866 shares at
March 31, 1998 and December 31, 1997 (174,217) (174,217)
----------- ------------
Total shareholders' equity 1,878,805 1,992,392
----------- -----------
Total liabilities and shareholders' equity $ 2,067,316 $ 2,095,691
=========== ===========
See Accompanying Notes to Financial Statements.
-3-
</TABLE>
<PAGE>
<TABLE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<CAPTION>
For the Three Months
Ended
March 31,
1998 1997
--------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Income (expense):
Other income $ 10,893 $ 63,850
Corporate administrative expense (137,439) (376,702)
Net loss from continuing operations
before tax (126,546) (312,852)
Provision for income taxes - -
----------- ----------
Net loss from continuing operations
after tax (126,546) (312,852)
----------- ----------
Discontinued operations:
Net operating income (loss):
Viatical settlements (Note 2) - (37,996)
Real estate segment (Note 3) 12,959 (22,549)
---------- ---------
Net income (loss) from discontinued operations 12,959 (60,545)
---------- ---------
Net loss $ (113,587) $ (373,397)
========== ==========
Net loss from continuing operations
per share $(.08) $(.19)
Net income (loss) from discontinued operations
per share .01 (.03)
---- -----
Net loss per share $(.07) $(.22)
==== ======
Average number of shares outstanding 1,673,190 1,673,190
========= =========
See Accompanying Notes to Financial Statements.
-4-
</TABLE>
<PAGE>
<TABLE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<CAPTION>
For the Three Months
Ended
March 31,
---------- ---------
1998 1997
---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $(113,587) $(373,397)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 2,190 2,191
Reserves and allowances on notes receivable - 200,000
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable
and accrued liabilities 85,212 (65,500)
------- ---------
Net cash used in operating activities (26,185) (236,706)
------- ---------
Change in net assets of discontinued operations 2,051 (76,446)
------- --------
Cash flows from investing activities:
Collections on notes receivable - 132,500
Issuance of note receivable - (198,035)
------- ---------
Net cash used in investing activities - (65,535)
------- ---------
Decrease in cash and cash equivalents (24,134) (378,687)
Cash and cash equivalents at
beginning of period 56,035 651,345
------- ---------
Cash and cash equivalents at end of period $31,901 $ 272,658
======= =========
See Accompanying Notes to Financial Statements.
-5-
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(Unaudited)
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
The financial information for the three month periods ended March 31, 1998
and 1997 presented in this Form 10-QSB has been prepared from the
accounting records without audit. The information furnished reflects all
adjustments (consisting of only normal recurring adjustments) which are,
in the opinion of management, necessary for a fair statement of the
results of interim periods. The results of operations for the three
months ended March 31, 1998 are not necessarily indicative of the results
to be expected for a full year. The consolidated balance sheet as of
December 31, 1997 has been derived from audited financial statements.
This report should be read in conjunction with the consolidated financial
statements included in the Company's December 31, 1997 Annual Report to
shareholders on Form 10-KSB as filed with the Securities and Exchange
Commission.
National Capital Management Corporation ("NCMC" or the "Company") is a
holding company that currently is completing the orderly liquidation of
its discontinued operations, while seeking other acquisitions.
Prior to 1995, the Company had been comprised of three distinctly
different operating businesses, the Viatical Settlement Segment, which was
operated through National Capital Benefits Corporation ("NCBC"), a wholly
owned subsidiary, the Real Estate Segment and the Industrial Products
Segment. The Industrial Products Segment and Real Estate Segment were
discontinued in 1995. The Viatical Settlement Segment was discontinued in
1996.
Consolidation Principles
------------------------
The consolidated financial statements include the accounts of the Company
and all of its majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
Reclassifications
-----------------
Certain amounts as presented in prior year financial statements have been
reclassified to conform with the current period presentation.
Earnings per share
------------------
Effective December 15, 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share". Statement No. 128
replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Under the new
requirements for calculating earnings per share, the dilutive effect of
stock options will be excluded from basis earnings per share but included
in the computation of diluted earnings per share. All earnings per share
amounts have been restated so as to comply with Statement No. 128.
NOTE 2 - DISCONTINUED OPERATIONS - VIATICAL SETTLEMENTS
The results of the Viatical Settlements Segment have been reported
separately as discontinued operations in these consolidated statements of
operations.
-6-
<PAGE>
NOTE 2 - DISCONTINUED OPERATIONS - VIATICAL SETTLEMENTS (CONTINUED)
In December 1996, the Company decided to discontinue the operations of the
Viatical Settlements business. The Company reduced its staff and expects
that the remaining personnel will administer the orderly liquidation of
its existing portfolio. It is expected that this process will take
several years. The Company established a $1,500,000 valuation reserve
during 1996, and as adjusted during the quarter ended March 31, 1998,
against accrued policy revenues and purchased policy costs which
represents the estimated expected loss on holding the remaining policies
to maturity in order to reflect management's estimate of the fair market
value of the net assets. During the fourth quarter ended December 31,
1997, the Company increased its original reserve by $350,000. The amount
of the reserve was determined based on projections of expected cash
inflows from maturities and reinsurance claims, and cash outflows for debt
service and operating costs during the portfolio administration process,
which is expected to take several more years.
NCBC has an insurance contract with NCB Insurance Ltd. ("NCB"), a wholly-
owned subsidiary of NCBC, which automatically provides for payment of 90%
of the face value of the policies purchased at a specified period of time
after the expected maturity date, in accordance with the contract. NCB,
in turn, has reinsured this risk with several large, non-affiliated
international reinsurance companies. NCBC, through NCB, maintains a
participation in the residual 10%.
The anticipated reinsurance recoveries represent a substantial element of
the cash flow projections used to determine the valuation reserve. While
management expects full collection of reinsurance recoveries, these
recoveries from the sole reinsurance facility represent a significant
concentration of risk.
Summarized below are the operations of the Company's Viatical Settlements
for the three months ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
For the three months
ended March 31,
1998 1997
---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Revenue accrued and received $1,033,738 $1,461,721
Cost of insurance policies (756,843) (1,208,725)
Valuation reserve income 92,205 110,321
--------- ----------
Earned discount 369,100 363,317
Interest expense (308,374) (337,692)
--------- ----------
Earned discount after interest expense 60,726 25,625
General and administrative expenses (60,453) (63,348)
Depreciation and amortization (273) (273)
--------- ----------
Net loss $ - $ (37,996)
========== ==========
</TABLE>
The components of the Viatical Settlements Segment net assets from
discontinued operations in the consolidated balance sheet as of March 31,
1998 and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Purchased policy costs, less amortized
policy costs of $18,807,923 and
$18,051,081, respectively $ 3,443,359 $ 4,200,382
Valuation reserve (955,972) (1,048,177)
Accrued policy revenues, less matured
revenues valuation of $7,957,801 and
$7,820,301, respectively 14,404,949 13,715,134
Revolving credit facility (9,077,225) (9,511,468)
Subordinated note payable (2,000,000) (2,000,000)
Reinsurance liability (5,381,808) (4,927,799)
Other, net (397,784) (402,544)
----------- -----------
$ 35,519 $ 25,528
=========== ===========
-7-
</TABLE>
<PAGE>
NOTE 3 - DISCONTINUED OPERATIONS - REAL ESTATE SEGMENT
On November 27, 1995, the Company elected to discontinue operations of the
Real Estate Segment to concentrate its efforts on its viatical settlements
business. The following is a description of the Company's recent disposal
activity:
Colony Ridge Apartments, the Company's only remaining real estate property
since its disposal activities began in 1995, is an apartment complex in
Decatur, Georgia which was constructed in 1968 and consists of 23 two-
story buildings containing a total of 212 apartment units. On May 6,
1998, the Company sold the Colony Ridge Apartments for $3,650,000. The
Company received net proceeds of approximately $2,500,000. The difference
between the sales price and the net proceeds received is due to the
repayment of the mortgage, state taxes, and miscellaneous expenses.
The results of the Real Estate Segment have been reported separately as
discontinued operations in these consolidated statements of operations.
Summarized below are the operations of the Company's Real Estate Segment
for the three months ended March 31, 1998 and 1997:
<TABLE>
<CAPTION>
For the three months
ended March 31,
1998 1997
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Total revenues $279,588 $261,407
Costs and expenses:
Operations and maintenance 147,432 149,590
Property taxes and insurance 20,042 19,716
Depreciation and amortization 75,000 73,500
Net interest 24,155 26,905
Corporate administrative expenses - 14,245
-------- --------
Total costs and expenses 266,629 283,956
-------- --------
Net income (loss) $ 12,959 $(22,549)
======== ========
</TABLE>
The components of the Real Estate Segment net assets from discontinued
operations in the consolidated balance sheet as of March 31, 1998 and
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Rental properties, less accumulated
depreciation of $1,532,881 and
$1,457,881, respectively $2,868,286 $2,905,725
Mortgage note payable (1,082,790) (1,115,599)
Accounts payable (38,362) (109,120)
Other, net 35,854 114,024
---------- ----------
$1,782,988 $1,795,030
========== ==========
</TABLE>
NOTE 4 - DISCONTINUED OPERATIONS:
The Industrial Products Segment was discontinued during 1995. It
consisted of the Company's wholly-owned subsidiary, Jensen Corporation
("Jensen"), which manufactured and distributed machinery used primarily by
commercial laundries, large institutions and hotels as well as commercial
compactor products for waste disposal. On November 10, 1995, the Company
sold 100% of the common stock of Jensen, located in Fort Lauderdale,
Florida to AMKO USA, Inc. ("AMKO"), an affiliate of AMKO International
B.V. which is based in The Netherlands, for $1,726,000. The sale proceeds
included cash of $415,000 and a promissory note receivable in the amount
of $1,311,000 which was secured by Jensen's stock, accounts receivable and
inventory. The $1,311,000 note was guaranteed in its entirety by AMKO
International B.V., and the sole shareholder of AMKO International B.V.
guaranteed, as amended May 16, 1997, $500,000 of payments, of all notes
(see below).
-8-
<PAGE>
NOTE 4 - DISCONTINUED OPERATIONS - INDUSTRIAL PRODUCTS SEGMENT (CONTINUED)
AMKO also agreed to cause Jensen to pay to the Company a $765,000
obligation in the form of a note, which was loaned to Jensen, $500,000 of
which was prior to the sale and $265,000 which was simultaneous with the
sale, and an intercompany balance payable by Jensen to the Company of
$337,650, which was secured by the assets of Jensen. These notes were
guaranteed by AMKO International B.V.
The $1,311,000 note, as amended May 16, 1997, bore interest at 8.5% per
annum and was payable in varying installments with the balance due in
April 1998 unless extended as indicated below. The $765,000 note, as
amended May 16, 1997, bore interest at 8.5% per annum and was payable in
varying installments with the balance due in April 1998 unless extended as
indicated below. The $337,650 note, as amended May 16, 1997, bore
interest at 8.5% per annum and was payable in varying installments with
the balance due in April 1998 unless extended as indicated below.
The Company advanced $198,000 to AMKO during February and March 1997, of
which $82,500 was repaid. The balance was a Demand Note which bore
interest at 12% per annum. This note is also guaranteed by AMKO
International. As of December 31, 1997, this note was paid in full.
In accordance with the May 16, 1997 amendment, the notes could be extended
until April 1999, if AMKO prepaid $500,000 on or before April 1, 1998. If
extended, the interest rate on all of the notes would increase to 12%.
The Company charged AMKO a fee of $200,000 in conjunction with the
amendment. The fee was paid on May 16, 1997.
The Company loaned Jensen an additional $200,000 in conjunction with the
May 16, 1997 modification and an additional $36,000 in October 1997.
These notes bore interest at 8.5% and mature simultaneously with the other
notes.
As of October 1997, Jensen stopped making payments as required by the
terms of the May 16, 1997 amendment. On November 11, 1997, Jensen filed
for Chapter 7 bankruptcy. On March 26, 1998, an auction sale was held,
the proceeds of which were distributed by the trustee in bankruptcy. The
Company received $56,686 in April 1998 as a result of the sale and
anticipates receiving approximately an additional $95,000. The remaining
balance of the notes were written off as of December 31, 1997. Amko
International filed for and was discharged from the bankruptcy in the
Netherlands between January and April 1998. The Company has pursued a
remedy in judicial proceedings in the Netherlands with a procedural result
that allows the Company to pursue Amko International in the United States
courts. The Company has not yet elected to pursue a remedy in the United
States courts. The Company is pursuing in the Netherlands collection
efforts against the sole stockholder of AMKO for his personal guarantee.
The Company cannot predict the outcome of this effort.
-9-
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
Overview
--------
The following is a discussion and analysis of the consolidated financial
condition of the Company as of March 31, 1998 and of the results of
operations for the Company for the three months ended March 31, 1998 and
1997, and of certain factors that may affect the Company's prospective
financial condition and results of operations. The following is
supplemental to and should be read in conjunction with the Company's
December 31, 1997 Annual Report to shareholders on Form 10-KSB as filed
with the Securities and Exchange Commission, and the financial information
and accompanying notes beginning on page 3 of this report.
Information contained in this discussion and analysis contains "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, which can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "plan",
"anticipate", "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. There are certain important
factors that could cause results to differ materially from those
anticipated by some of these forward-looking statements. Investors are
cautioned that all forward-looking statements involve risks and
uncertainty. The factors, among others, that could cause actual results
to differ materially include: cures and advances in medical treatments for
terminal illnesses; dependence on medical consultants and an ability to
predict life expectancy; the Company's ability to execute its business
plan, and the ability to collect reinsurance recoveries from a single
reinsurance facility.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ significantly
from those estimates.
Material estimates that are particularly susceptible to significant change
in the near term relate to the determination of the valuation reserve
against accrued policy revenues and the cost of purchased policies and the
collectibility of notes receivable.
While the Company is managing the administration of the collection of the
portfolio of life insurance policies and the orderly liquidation of its
remaining real estate, management intends to seek other acquisitions.
Accounting for long-lived assets
--------------------------------
For the three months ending March 31, 1998 and calendar year December 31,
1997, the Company has applied SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", and
determined that certain adjustments for impairment were required. In
addition to the write-down of several assets of the Company, a $1.5
million valuation reserve was established against accrued policy revenues
and purchased policy costs in order to reflect management's estimate of
the fair market value of the net assets. During the fourth quarter ended
December 31, 1997, the Company increased its original reserve by $350,000
(Note 2).
-10-
<PAGE>
The accuracy of the valuation reserve established by the Company (Note 2)
is directly related to NCBC's assumptions regarding the remaining life
expectancy of terminally ill individuals. While NCBC believes that its
estimate of life expectancy, and the related valuation reserve will
approximate actual experience, given the inherent scientific uncertainty
of such estimates, including the potential impact of recently announced
medical treatments that might extend life expectancies, there can be no
assurance that these policies will mature in accordance with management's
estimates. Therefore, the Company established a $1,500,000 valuation
reserve against accrued policy revenues and purchase policy costs during
1996, which is adjusted quarterly. During the fourth quarter ended
December 31, 1997, the Company increased its original reserve by $350,000.
The amount of the reserve was determined based on projections of expected
cash inflows from maturity and reinsurance claims, and cash outflows for
debt service and operating costs during the portfolio administration
process which is expected to take several years (Note 2).
Financial condition and liquidity
---------------------------------
The Company's cash decreased from $56,035 as of December 31, 1997 to
$31,901 at March 31, 1998, principally as a result of financing operating
activities.
Other than in its Viatical Settlement subsidiary, the Company does not
have any existing general credit facilities to fund its ongoing working
capital requirements. These lending facilities were amended in 1997 in
light of management's decision to discontinue the Viatical Settlement
Business and liquidate the portfolio.
Results of operations
---------------------
As a result of the Company's decision to discontinue its Viatical
Settlements business in December 1996, the Company ceased purchasing
insurance policies from individuals. The Company may, however, seek the
purchase of a portfolio of life insurance policies to the extent each of
the policies in such a bulk purchase is within the guidelines set forth in
the reinsurance agreements with NCBC. As previously announced, NCBC has
restructured its organization and reduced its office staff to one person.
Management anticipates that this remaining person, as well as NCMC
management, will manage NCBC's existing portfolio of approximately $19
million of insurance policies. Management estimates that the
administration of these policies will take several more years.
During the three months ended March 31, 1998, approximately $137,500 of
life insurance policies matured as compared to $740,000 for the same
period last year.
The recognition of earned discount and the ultimate profitability
associated with purchased insurance policies is directly related to NCBC's
assumptions regarding the remaining life expectancy of terminally ill
individuals. Such estimates were made when the insurance policy was
purchased based upon facts and circumstances then known. While NCBC
believes that its estimate of life expectancy, and the related recognition
of earned discount will closely approximate actual experience, given the
inherent scientific uncertainty of such estimates, including the potential
impact of recently announced medical treatments that might extend life
expectancies, there can be no assurance that these policies will mature in
accordance with management's estimates. Therefore, the Company established
a $1,500,000 valuation reserve against accrued policy revenues and
purchase policy costs during 1996, and as adjusted during the three months
ended March 31, 1998. During the fourth quarter ended December 31, 1997,
the Company increased its original reserve by $350,000. The amount of the
reserve was determined based on projections of expected cash inflows from
maturity and reinsurance claims, and cash outflows for debt service and
operating costs during the portfolio administration process which is
expected to take several years (Note 2).
On May 6, 1998, the Company sold the Colony Ridge Apartments for
$3,650,000. The Company received net proceeds of approximately
$2,500,000. The difference between the sales price and the net proceeds
received is due to the repayment of the mortgage, state taxes, and
miscellaneous expenses.
-11-
<PAGE>
In December 1997, the Company wrote off all except $150,000 of notes
receivable as a result of Jensen's bankruptcy (Note 4). The Company
received $56,686 in April 1998 and expects to receive approximately an
additional $95,000. Management believes this amount will be collected
within a reasonable period of time.
-12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Not applicable
-13-
<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.
NATIONAL CAPITAL
MANAGEMENT CORPORATION
Dated: May 12, 1998 By: //s// John C. Shaw
------------ -----------------------------------
John C. Shaw
Chief Executive Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 31,901
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 104,831
<DEPRECIATION> 74,148
<TOTAL-ASSETS> 2,067,316
<CURRENT-LIABILITIES> 188,511
<BONDS> 0
0
0
<COMMON> 16,732
<OTHER-SE> 1,862,073
<TOTAL-LIABILITY-AND-EQUITY> 2,067,316
<SALES> 0
<TOTAL-REVENUES> 10,893
<CGS> 0
<TOTAL-COSTS> 137,439
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (126,546)
<INCOME-TAX> 0
<INCOME-CONTINUING> (126,546)
<DISCONTINUED> 12,959
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (113,587)
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
