<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13
or 15 (d) of the Securities
Exchange Act of 1934
For the Quarter Ended
September 30, 1997 Commission File Number 0-17744
--------------------- ------------------------------
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3581924
- ----------------- ---------------------------
State or other IRS Employer Identification
jurisdiction of Number
incorporation or
organization
1300 E. Woodfield Road, Suite 312 Schaumburg, Illinois 60173
- --------------------------------- ---------------------------
Address of principal City, State, Zip Code
executive offices
Registrant's telephone number: (847) 240-6200
---------------------------
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.
(1) Yes x No
---- ----
(2) Yes x No
---- ----
<PAGE> 2
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
PART I - FINANCIAL INFORMATION
Item 1.
Index to Financial Statements
Balance Sheets
September 30, 1997 (unaudited) 3
December 31, 1996 4
Statements of Revenue and Expenses (unaudited)
For the three months ended September 30, 1997 5
For the three months ended September 30, 1996 6
For the nine months ended September 30, 1997 7
For the nine months ended September 30, 1996 8
Statements of Changes in Partners' Equity
For the nine months ended September 30, 1997
(unaudited) 9
Statements of Cash Flows (unaudited)
For the nine months ended September 30, 1997 10
For the nine months ended September 30, 1996 11
Notes to Financial Statements (unaudited) 12
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 13 - 15
PART II - OTHER INFORMATION
Items 1-6. 16
2
<PAGE> 3
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
BALANCE SHEETS
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
ASSETS
- ------
<S> <C> <C> <C>
Cash and cash equivalents $1,937,833 $3,897,766 $5,835,599
Net investment in direct
financing leases - 700,775 700,775
Diverted and other assets, net 94,076 204,388 298,464
Datronic assets, net - - -
----------- ---------- ----------
$2,031,909 $4,802,929 $6,834,838
=========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 3,434 $ 23,899 $ 27,333
Lessee rental deposits 38,263 91,578 129,841
----------- ---------- ----------
Total liabilities 41,697 115,477 157,174
Total partners' equity 1,990,212 4,687,452 6,677,664
----------- ---------- ----------
$2,031,909 $4,802,929 $6,834,838
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
BALANCE SHEETS
December 31, 1996
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
ASSETS
- ------
<S> <C> <C> <C>
Cash and cash equivalents $2,203,075 $3,532,245 $5,735,320
Due from management company 12,676 31,334 44,010
Net investment in direct
financing leases 10,824 1,594,812 1,605,636
Diverted and other assets, net 94,076 204,388 298,464
Datronic assets, net - - -
----------- ---------- ----------
$2,320,651 $5,362,779 $7,683,430
=========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 67,596 $ 173,025 $ 240,621
Lessee rental deposits 76,041 186,827 262,868
----------- ---------- ----------
Total liabilities 143,637 359,852 503,489
Total partners' equity 2,177,014 5,002,927 7,179,941
----------- ---------- ----------
$2,320,651 $5,362,779 $7,683,430
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 5,336 $ 42,722 $ 48,058
Interest income 22,931 53,349 76,280
----------- ---------- ----------
28,267 96,071 124,338
----------- ---------- ----------
Expenses:
General Partner's
expense reimbursement 85,187 199,925 285,112
Professional fees 43,893 98,738 142,631
Other operating expenses 6,749 14,677 21,426
Credit for lease losses (14,116) (30,668) (44,784)
----------- ---------- ----------
121,713 282,672 404,385
----------- ---------- ----------
Net loss $ (93,446) $ (186,601) $ (280,047)
=========== ========== ==========
Net loss - General Partner $ (934) $ (1,866) $ (2,800)
=========== ========== ==========
Net loss - Limited Partners $ (92,512) $ (184,735) $ (277,247)
=========== ========== ==========
Net loss per limited
partnership unit $ (1.47) $ (1.35)
=========== ==========
Weighted average number
of limited partnership units
outstanding 63,030 136,969
=========== ==========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 10,886 $ 99,858 $ 110,744
Interest income 11,274 79,114 90,388
----------- ---------- ----------
22,160 178,972 201,132
----------- ---------- ----------
Expenses:
General Partner's
expense reimbursement 92,126 216,763 308,889
Professional fees 34,092 79,728 113,820
Other operating expenses 7,411 16,116 23,527
----------- ---------- ----------
133,629 312,607 446,236
----------- ---------- ----------
Net loss $ (111,469) $ (133,635) $ (245,104)
=========== ========== ==========
Net loss - General Partner $ (1,115) $ (1,336) $ (2,451)
=========== ========== ==========
Net loss - Limited Partners $ (110,354) $ (132,299) $ (242,653)
=========== ========== ==========
Net loss per limited
partnership unit $(1.75) $(.97)
=========== ==========
Weighted average number
of limited partnership units
outstanding 63,030 136,969
=========== ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 17,710 $ 157,064 $ 174,774
Interest income 62,538 161,299 223,837
----------- ---------- ----------
80,248 318,363 398,611
----------- ---------- ----------
Expenses:
General Partner's
expense reimbursement 253,548 589,991 843,539
Professional fees 95,326 221,487 316,813
Other operating expenses 14,455 31,534 45,989
Credit for lease losses (96,279) (209,174) (305,453)
----------- ---------- ----------
267,050 633,838 900,888
----------- ---------- ----------
Net loss $ (186,802) $ (315,475) $ (502,277)
=========== ========== ==========
Net loss - General Partner $ (1,868) $ (3,155) $ (5,023)
=========== ========== ==========
Net loss - Limited Partners $ (184,934) $ (312,320) $ (497,254)
=========== ========== ==========
Net loss per limited
partnership unit $ (2.93) $ (2.28)
=========== ==========
Weighted average number
of limited partnership units
outstanding 63,030 136,969
=========== ==========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 44,810 $ 390,125 $ 434,935
Interest income 31,641 213,254 244,895
----------- ---------- ----------
76,451 603,379 679,830
----------- ---------- ----------
Expenses:
Management fees-New Era 156,713 382,178 538,891
General Partner's
expense reimbursement 148,637 339,539 488,176
Professional fees 102,239 240,300 342,539
Other operating expenses 14,057 31,670 45,727
----------- ---------- ----------
421,646 993,687 1,415,333
----------- ---------- ----------
Net loss $ (345,195) $ (390,308) $ (735,503)
=========== ========== ==========
Net loss - General Partner $ (3,452) $ (3,903) $ (7,355)
=========== ========== ==========
Net loss - Limited Partners $ (341,743) $ (386,405) $ (728,148)
=========== ========== ==========
Net loss per limited
partnership unit $ (5.42) $ (2.82)
=========== ==========
Weighted average number
of limited partnership units
outstanding 63,030 136,969
=========== ==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
General Limited Limited Total
Partner's Partners' Partners' Partners'
Equity Equity Equity Equity
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 $ (392,712)* $2,275,030 $5,297,623 $7,179,941
Net loss (5,023) (184,934) (312,320) (502,277)
Allocation of General
Partner's equity 397,735 (99,884) (297,851) 0
----------- ----------- ---------- ----------
Balance, September 30, 1997 $ 0 $1,990,212 $4,687,452 $6,677,664
=========== =========== ========== ==========
</TABLE>
* Balance as previously reported was $0 due to allocation of $98,016 and
$294,696 to Liquidating and Continuing Limited Partners' Equity,
respectively.
See accompanying notes to financial statements.
9
<PAGE> 10
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----------
<S> <C> <C> <C>
Cash flows used for operating
activities:
Net loss $ (186,802) $ (315,475) $ (502,277)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Credit for lease losses (96,279) (209,174) (305,453)
Changes in assets and
liabilities:
Accounts payable and
accrued expenses (64,162) (149,126) (213,288)
Lessee rental deposits (37,778) (95,249) (133,027)
Due from management company 12,676 31,334 44,010
----------- ---------- -----------
(372,345) (737,690) (1,110,035)
----------- ---------- -----------
Cash flows from investing activities:
Principal collections on leases 107,103 1,103,211 1,210,314
----------- ---------- -----------
Net increase (decrease) in cash
and cash equivalents (265,242) 365,521 100,279
Cash and cash equivalents:
Beginning of year 2,203,075 3,532,245 5,735,320
----------- ---------- -----------
End of third quarter $1,937,833 $3,897,766 $ 5,835,599
=========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----
<S> <C> <C> <C>
Cash flows used for operating activities:
Net loss $ (345,195) $ (390,308) $ (735,503)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Changes in assets and liabilities:
Accounts payable and accrued
expenses (75,143) (166,117) (241,260)
Lessee rental deposits (102,560) (251,089) (353,649)
Due to management company 373 826 1,199
---------- ---------- ----------
(522,525) (806,688) (1,329,213)
---------- ---------- ----------
Cash flows from investing activities:
Principal collections on leases 524,875 2,870,605 3,395,480
Principal collections on installment
contract receivable 25,085 54,497 79,582
Release of restricted cash 10,812 23,489 34,301
---------- ---------- ----------
560,772 2,948,591 3,509,363
---------- ---------- ----------
Cash flows used for financing activities:
Distributions to Limited Partners - (136,970) (136,970)
---------- ---------- ----------
Net increase in cash and cash equivalents 38,247 2,004,933 2,043,180
Cash and cash equivalents:
Beginning of year 2,379,752 1,515,551 3,895,303
---------- ---------- ----------
End of third quarter $2,417,999 $3,520,484 $5,938,483
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
NOTE 1 - ORGANIZATION:
Datronic Equipment Income Fund XVII, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on May 12, 1988 for the purpose of acquiring and
leasing both high-and low-technology equipment. Reference is made to Notes 3,
4, 5, and 6 to the Partnership's financial statements included in the 1996 Form
10-K for a discussion of the alleged diversion of Partnership assets in 1991
and 1992 and the subsequent litigation and settlement, change in general
partner, new classes of limited partners established and amendments to the
Partnership Agreement which occurred.
NOTE 2 - BASIS OF FINANCIAL STATEMENTS:
The accompanying financial statements should be read in conjunction with the
Partnership's financial statements included in the 1996 Form 10-K. The
financial information furnished herein is unaudited but in the opinion of
Management includes all adjustments necessary (all of which are normal
recurring adjustments) for a fair presentation of financial condition and
results of operations.
In December 1996, the Court approved a Management Termination Agreement between
New Era Funding Corp. and Lease Resolution Corporation ("LRC"). Pursuant to
that agreement, LRC assumed day-to-day management responsibility for the
Partnership and for the related expenses incurred on its behalf retroactive to
July 1, 1996. Accordingly, management fees totaling $268,126 for the period
July 1-September 30, 1996 originally reported as Management fees-New Era in
the Partnership's Statements of Revenue and Expenses for the three and nine
months ended September 30, 1996 have been reclassified as General Partner's
expense reimbursement. This reclassification has no effect on the
Partnership's net loss for these periods and is consistent with the manner in
which these expenses were reported for the full year in the Partnership's 1996
financial statements included in Form 10-K.
NOTE 3 - LIMITED PARTNERSHIP DISTRIBUTIONS:
Distributions to Liquidating Limited Partners were suspended after payment of
the April 1, 1995 distribution. Distributions to Continuing Limited Partners
were suspended after payment of the January 1, 1996 distribution.
12
<PAGE> 13
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of liquidity and capital resources covers
material changes in the Partnership's financial condition from December 31,
1996 through September 30, 1997. The discussion and analysis of results of
operations is for the three and nine months ended September 30, 1997 as
compared to the corresponding periods in 1996.
Financial Condition, Liquidity and Capital Resources
During the nine months ended September 30, 1997, Partnership assets continued
to be converted to cash to pay Partnership operating expenses and liquidate
Partnership liabilities.
Net investment in direct financing leases decreased $905,000 during the nine
months ended September 30, 1997. This decrease is attributable to principal
collections of $1,210,000, partially offset by a credit for lease losses of
$305,000.
Accounts payable and accrued expenses decreased $213,000 during the nine months
ended September 30, 1997 primarily due to payment of accrued legal fees and
sales and use taxes.
Lessee rental deposits decreased $133,000 from the return of lease deposits at
the expiration of the respective leases.
In the aggregate, partners' equity decreased $502,000 during the nine months
ended September 30, 1997 due to a net loss.
During the nine months ended September 30, 1997, the Partnership's operating
activities resulted in a use of $1,110,000 of cash. This was due to a net loss
of $502,000, decreases in accounts payable and rental deposits of $346,000, and
a non-cash credit for lease losses of $306,000, partially offset by a decrease
in due from management company of $44,000. During the period, cash flows from
investing activities totaled $1,210,000 from principal collections on leases.
The Partnership's sources of liquidity on both a long-term and short-term basis
are expected to come principally from cash-on-hand and cash receipts from
leases owned by the Partnership. In addition, the Partnership's sources of
liquidity on a long-term basis are expected to include proceeds from the sale
of diverted and other assets and portions of the Partnership's lease portfolio
which may be sold in bulk. Management believes that its sources of liquidity
in the short and long-term are sufficient to meet its operating cash
obligations, pursue litigation, and provide for the orderly liquidation of the
Partnership.
13
<PAGE> 14
Distributions to the Liquidating Limited Partners were suspended after the
April 1, 1995 distribution and distributions to the Continuing Limited Partners
were suspended after the January 1, 1996 distribution.
The continued operation and eventual liquidation of the Partnership involves
numerous complex issues which have to be resolved. These issues relate to the
timing and realizability of lease-related assets, Diverted and other assets,
Datronic assets, litigation and the liquidation of the other Datronic
Partnerships (see Notes 3, 5 and 9 to the Partnership's financial statements
included in the 1996 Form 10-K). These issues make it difficult to predict the
time and costs necessary to operate and liquidate the Partnership in an orderly
manner. As a result of these uncertainties, it is unlikely that any additional
distributions will be made until all remaining assets are liquidated and the
pending litigation is resolved. The amount of future distributions, if any, to
the Limited Partners is likely to be significantly less than the amount of
partners' equity reflected in the September 30, 1997 Balance Sheets (see the
financial statements included in Item 1).
Results of Operations
Lease income decreased $63,000 and $260,000 for the three and nine months ended
September 30, 1997 as compared to the corresponding periods in 1996 primarily
due to declining lease portfolios.
Interest income decreased $14,000 and $21,000 for the three and nine months
ended September 30, 1997 as compared to the corresponding periods in 1996. This
decrease is primarily due to an early payoff of an installment contract
receivable in December 1996.
Management fees-New Era represents payments to New Era Funding for managing the
day-to-day operations of the Partnership pursuant to a Management Agreement
that was terminated effective June 30, 1996. Accordingly, no management fees
were paid to New Era for any periods after that date. Management fees of
$539,000 for the nine months ended September 30, 1996 are all attributable to
the first six months of the year. Effective July 1, 1996, the General Partner,
Lease Resolution Corporation ("LRC") assumed responsibility for the day-to-day
management of the Partnership and the related expenses are included in General
Partner's expense reimbursement (see Note 8 to the financial statements
included in the 1996 Form 10-K).
The General Partner's expense reimbursement includes (i) payments to LRC for
expenses it incurred as general partner beyond those covered by its partner
distributions, and (ii) effective July 1, 1996, reimbursement of additional
expenses incurred by LRC in the day-to-day management of the Partnership. The
following table summarizes all payments to LRC for the three and nine months
ended September 30, 1996 and 1997.
14
<PAGE> 15
<TABLE>
<CAPTION>
General
Expense Partner
Reimbursement Distributions Total
----------------------------------------
<S> <C>
Three months ended
9/30/97 $ 285,000 $ - $ 285,000
9/30/96 309,000 - 309,000
----------------------------------------
Increase (decrease) $ (24,000) $ - $ (24,000)
========================================
Nine months ended
9/30/97 $ 844,000 $ - $ 844,000
9/30/96 488,000 - 488,000
----------------------------------------
Increase (decrease) $ 356,000 $ - $ 356,000
========================================
</TABLE>
Total payments to LRC for the three months ended September 30, 1997 decreased
$24,000 compared to last year because of staff reductions and other cost
savings associated with the management of the Partnership. These 1997 savings
were partially offset by a $120,000 premium for insurance coverage that extends
through the ultimate liquidation of the Partnership.
The nine month increase of $356,000 reflects the fact that LRC managed the
day-to-day operations of the Partnership for all three quarters through
September 30, 1997 versus only one quarter in 1996, partially offset by staff
reductions and other cost savings. The increase also includes the $120,000
insurance premium noted above and a $66,000 one-time charge for relocating the
former New Era staff to reduced office space.
Professional fees increased $29,000 for the three month period and decreased
$26,000 for the nine month period ended September 30, 1997 as compared to the
corresponding periods in 1996. The increase results from additional legal fees
for Partnership claims against former accountants and others, partially offset
by decreases in other legal fees and legal fees for collections. The decrease
is due to reductions in audit fees and legal fees for collections and other
matters partially offset by increases in legal fees for Partnership claims
against former accountants and others.
The credit for lease losses reflects Management's ongoing assessment of
potential losses inherent in the lease portfolio and actual collections for
certain leases in excess of those anticipated in prior years.
15
<PAGE> 16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 - Legal Proceedings in the Partnership's December
31, 1996 Form 10-K for a discussion of material legal proceedings involving the
Partnership.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None.
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized, on the 13th day of November 1997.
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
Registrant
By: /s/DONALD D. TORISKY
----------------------------------------
Donald D. Torisky
Chairman and Chief Executive Officer
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XVII, L.P.
By: /s/ROBERT P. SCHAEN
----------------------------------------
Robert P. Schaen
Vice Chairman and Chief Financial Officer
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XVII, L.P.
17
<PAGE> 18
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule, which is
submitted electronically to the
Securities and Exchange Commission for
Information only and not filed.
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet and the Statements of Revenue and Expenses and is qualified in its
entirety by reference to such Report on Form 10-Q.
</LEGEND>
<CIK> 0000833409
<NAME> DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,835,599
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,834,838
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,677,664
<TOTAL-LIABILITY-AND-EQUITY> 6,834,838
<SALES> 0
<TOTAL-REVENUES> 398,611
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 45,989
<LOSS-PROVISION> (305,453)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (502,277)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
