<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 1997
Commission file No. 0-18866
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FIRST NATIONAL ENTERTAINMENT CORP.
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(Exact name of small business issuer as specified in its charter)
COLORADO 93-1004651
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 ENTERPRISE DRIVE, SUITE 109, OAK BROOK, ILLINOIS 60523
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(Address of principal executive offices)
(630) 573-8209
----------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK $0.005 PAR VALUE
-----------------------------
(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 for the past 90 days.
YES [ X ] NO [ ]
As of NOVEMBER 10, 1997 the registrant had outstanding 18,398,458 shares of
its $.005 par value Common Stock.
<PAGE> 2
INDEX
Part I - Financial Information
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Page
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Item 1 Consolidated Balance Sheets..................................................
Consolidated Statements of Income............................................
Consolidated Statements of Cash Flow.........................................
Notes to Consolidated Financial Statements...................................
Item 2 Management's Discussion and Analysis of Financial Conditions and Results
of Operations................................................................
</TABLE>
Part II - Other Information and Signatures
<TABLE>
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Item 5 Other Information............................................................
Item 6 Exhibits and Reports on Form 8-K.............................................
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
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September 30, 1997 1996
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<S> <C> <C>
ASSETS
Current Assets
Cash $232,915 $38,967
Cash escrow account 500,000 --
Loans Receivable, net of allowance 2,226,083 --
Accounts receivable, net of allowance 5,048 26,945
Interest Receivable 104,957 --
Other 4,881 9,314
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Total Current Assets 3,073,884 75,426
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Real estate held for development 550,000 --
Property and equipment, net 50,146 41,470
Other Assets
Film inventory, net of accumulated
amortization of $10,062,101 (1997) and
$7,862,101 (1996) 500,000 2,648,210
Intangible assets, net of accumulated
amortization of $119,508 (1996) -- 132,570
Organization Costs 519,349 --
Franchise rights 22,686 --
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Total Other Assets 1,042,035 2,822,250
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TOTAL ASSETS $4,716,065 $2,897,676
================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
3
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FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
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September 30, 1997 1996
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<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to shareholders $328,947 $ --
Accounts payable 322,608 245,037
Accrued expenses 459,622 235,410
Obligations under capital leases -- 21,081
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Total Current Liabilities 1,111,177 501,528
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Minority interest in consolidated subsidiary 2,788,968 --
Shareholders' Equity
Preferred stock, $.0001 par value,
authorized 10,000,000 shares,
issued and outstanding, 1,862,500 186 --
Common stock, $.005 par value,
authorized 100,000,000 shares,
issued and outstanding:
1997, 18,398,458 shares, and
1996, 16,898,458 shares 528,842 84,495
Dividends payable (30,000) --
Paid in capital 26,850,608 26,090,608
Accumulated deficit (26,533,716) (23,778,955)
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Total Shareholders' Equity 815,920 2,396,148
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,716,065 $2,897,676
===============================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
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For the three months ended September 30, 1997 1996
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<S> <C> <C>
TOTAL REVENUES $ 142,188 $ 103,579
COST OF REVENUES
Amortization of film costs -- 51,790
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GROSS PROFIT (LOSS) 142,188 51,789
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OPERATING EXPENSES
Marketing, selling & royalties -- 18,826
General and administrative 78,371 198,098
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TOTAL OPERATING EXPENSES 78,371 216,924
OPERATING PROFIT (LOSS) 63,817 (165,135)
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OTHER INCOME -- --
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NET INCOME (LOSS) $63,817 $(165,135)
===========================================================================
NET PROFIT (LOSS) PER SHARE $ -- $(.01)
===========================================================================
Weighted average shares outstanding 18,398,458 16,898,458
===========================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
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For the three months ended September 30, 1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $63,817 $(165,135)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization of film costs -- 51,790
Other amortization, depreciation, write-offs 6,885 116,778
Changes in operating assets and liabilities, net (47,080) (121,458)
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NET CASH (USED IN) OPERATING ACTIVITIES 23,622 (118,025)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment 38,425 --
Organization costs 519,349 --
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NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 557,774 --
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of warrants/calls 59,000 --
Loans from shareholders 268,947 --
Dividends paid (30,000) --
Common Stock Issuance 416,848 --
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NET CASH (USED IN) FINANCING ACTIVITIES 714,795 --
NET INCREASE/(DECREASE) IN CASH 180,643 (118,025)
CASH - BEGINNING OF PERIOD 52,272 156,993
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CASH - END OF PERIOD $232,915 $38,968
================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the three months ended September 30, 1997 1996
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Supplemental schedule of noncash investing and
financing activities
The Company, during the quarter ended September 30, 1997,
issued calls to reduce Notes Receivable for $140,000.
The Company also issued Common and Preferred stock for
Franchise Rights acquired by its subsidiary, First National
Environmental Technologies, Inc.
================================================================================
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)\
September 30, 1997
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NOTE 1 GENERAL
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In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of September
30, 1997 (unaudited) and the unaudited results of operations and cash flows for
the three months ended September 30, 1997 and 1996. The financial statements
have been prepared in accordance with the requirements of Form 10-QSB and
consequently do not include all the disclosures normally made in an Annual
Report on Form 10-KSB. Accordingly, the consolidated financial statements
included herein should be reviewed in conjunction with the financial statements
and the footnotes thereto included in the Company's 1997 Annual Report on Form
10-KSB.
The results of operations for the three months ended September 30, 1997 and
1996 are not necessarily indicative of the results to be expected for the full
year.
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NOTE 2 CONDENSED SUMMARY OF ACCOUNTING POLICIES
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The consolidated financial statements include the accounts of the Company and
its wholly owned and majority subsidiaries, including a 100% owned FNAT
Umwelttechnik AG in Switzerland and 80% owned KTV Kanal Technik GMbH & Co.
Vertriebs K.G. located in Germany. All material intercompany balances,
transactions and stockholdings are eliminated.
New Accounting Standards: On October 23, 1995, the Financial Accounting
Standards Board (the "FASB") issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (:SFAS No. 123"). SFAS No.
123 encourages, but does not require, the recognition of compensation expense
for grants of stock, stock options and other equity instruments to employees
based on a fair value method of accounting. Companies are permitted to
continue to apply the existing accounting rules contained in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"); however, companies that choose to retain this method of accounting
are required to provide expanded disclosures of pro forma net income and
earnings per share in the notes to financial statements as if the new fair
value method of accounting had been adopted. The provisions of SFAS No. 123
are effective for fiscal years beginning after December 15, 1995. The Company
has elected to continue to apply the accounting rules contained in APB 25. No
additional disclosure requirements are necessary as there were no options
issued for fiscal years subsequent to December 15, 1995.
Earnings per share have been computed based upon the weighted average number of
common shares and common equivalent shares outstanding during the respective
periods.
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NOTE 3 ACCOUNTS RECEIVABLE/LOANS RECEIVABLE
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On August 16, 1994, the Company received an accounting statement from Republic
Pictures (Republic), its former film distributor, that reported video sales and
collection results for Happily Ever After through June 30, 1994. This
statement reflected a lower producer royalty payment than the Company had
anticipated because of certain assumptions used by Republic in the accounting
statement that the Company believes were inconsistent with its distribution
agreement with Republic. The Company communicated these issues to Republic and
conducted a comprehensive third-
8
<PAGE> 9
party special audit of all reported video results. Republic subsequently
agreed to revise the August 16, 1994 accounting statement for the number of
videos shipped and, on September 26, 1994, delivered payment to the Company for
this revised accounting statement, plus interest. However, according to the
special auditor's report, Republic owes the Company a producer's bonus of 5% of
the first one million units sold, which approximates $256,000, in addition to
amounts owed the Company for foreign currency adjustments and excess units held
in reserve of $184,000. In 1996, Republic reported units sold of 389,000
units, but because of certain cost assumptions used by Republic in submitting
its accounting for these sold units, informed the Company that they have no
liability for producer royalty payments. The Company maintains that under the
terms of the Distributor Agreement, they are entitled to a specific amount for
each unit sold or approximately $1,150,000 for 1996. The Company intends to
vigorously pursue collection efforts with respect to these receivables,
however, due to the uncertainty of the results of the collection efforts, the
Company has charged off all of these outstanding receivables in 1996 and prior
years.
Loans Receivable: Loans are stated net of the allowance for loan losses and
unearned discount. Interest on loans is included in interest income over the
term of the loan based upon the principal balance outstanding. Where serious
doubt exists as to the collectibility of a loan, the accrual of interest is
discontinued. Loan fees and direct loan origination costs are deferred and
amortized over the term of the loan as a yield adjustment.
Allowance for Loan Losses: An allowance for loan losses has been established
to provide for those loans which may not be repaid in their entirety. The
allowance is increased by provisions for loan losses charged to expense and
decreased by charge-offs, net of recoveries. Although a loan is charged off by
management when deemed uncollectible, collection efforts may continue and
future recoveries may occur.
The allowance is maintained by management at a level considered adequate to
cover losses that are currently anticipated based on past loss experience,
general economic conditions, information about specific borrower situations
(including their financial position and collateral values) and other factors
and estimates which are subject to change over time. Estimating the risk of
loss and the amount of loss on any loan is necessarily subjective and ultimate
losses may vary from current estimates. These estimates are reviewed
periodically and as adjustments become necessary they are reported in earnings
in the periods in which they become known.
The Company has a Reserve for Unfunded Restoration Costs which it holds in
escrow. Payments are made from time to time as work is completed and
documentation is presented to a Title company.
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NOTE 4 FILM INVENTORY
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The Company's film inventory is summarized as follows:
<TABLE>
<CAPTION>
1997 1996
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Unamortized film costs for Happily Ever After allocated to the
secondary market and recorded as a noncurrent asset $500,000 $2,700,000
</TABLE>
Amortization of capitalized film property costs is computed using the
individual-film-forecast computation method as promulgated under SFAS No. 53,
"Financial Reporting by Producers and Distributors of Motion Picture Films".
At June 30, 1996, the Company intended to amortize the remaining unamortized
film costs for its Happily Ever After property over the next five years,
subject to future market conditions altering this accounting estimate. The
Company's computation of net realizable value as of June 30, 1997, has resulted
in a significant change in the amount of unamortized costs permitted to be
charged to future operations. Accordingly, a charge of $2,200,000 is reflected
in the 1997 statement of operations to reflect the writedown of film property
costs to their estimated net realizable value.
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9
<PAGE> 10
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NOTE 5 CONTINGENCIES
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The Company received notice from the Screen Actors Guild that supplemental
residuals of 4.5% of the first $1,000,000 and 5.4% of all remaining gross
producer receipts are due them. The Company's entertainment counsel is
researching the matter to determine if the Company has a liability related to
this matter. As of the date of this filing there has been no determination and
the Company believes that if any residuals are due they should be the
responsibility of Lou Scheimer and Filmation (the original producer of the
film).
On May 18, 1995, the Company received notice from Della Miles, Stylus Record's
feature artist, that Stylus was in material breach of its contract with her.
After several meetings with Ms. Miles and her counsel, the Company placed the
entire advanced royalty receivable amount relating to this contract in its
reserve for doubtful accounts.
The Founders' Agreement of Stylus Records calls for certain actions by the
Company if the Company's common stock price is not equal to $5 or greater on
March 31, 1996 (the stock price on April 1, 1996 was $.25). These actions
relate to 60,000 shares of a total of 160,000 issued in April 1994 in exchange
for the Company's 80% interest in Stylus Records. Per the Agreement, the
Company would be required to make up any shortfall in value, either in cash or
via the issuance of additional shares. The Company has submitted the Agreement
to its legal counsel to determine if it is indeed obligated to take such
actions. As of this date it is the Company's understanding that Stylus Records
is in receivership.
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NOTE 6 LITIGATION
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The Company is involved in certain litigation incidental to the conduct of its
business. In the Company's opinion, none of these proceedings will have a
material adverse effect on the Company's financial position, results of
operations and liquidity. The financial statements include the estimated
amounts of liabilities that are likely to be incurred from these and various
other pending litigation and claims.
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NOTE 7 CONTINUING OPERATIONS AND SUBSEQUENT EVENTS
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The Company, as has been previously reported, has continued to pursue revenue
from the animated film Happily Ever After. In addition, the Company is
exploring possible acquisitions in the movie distribution field and has
contracted with Peter Keefe Productions located in California to assist in this
endeavor.
First National Finance Corporation is generating the expected revenue and
should continue to earn as projected for the balance of the fiscal year.
First National Environmental Technologies, Inc. is in a start up phase and does
not expect to show earnings until the 4th quarter of fiscal 1998 (the quarter
ended June 30, 1998).
On September 30, 1997, the Company acquired a Swiss management company having
the rights to certain trenchless pipe repair technology in exchange for
1,500,000 shares of common stock, warrants to acquire an additional 17,500,000
shares of common stock at 12-1/2 cents a share, preferred stock in the
principal amount of $1,862,000, and a self-liquidating note in the amount of
$5,000,000. This note will be liquidated by application of certain future tax
benefits earned by a U.S. Subsidiary. An additional 1,000,000 shares will be
issued as a broker's commission.
10
<PAGE> 11
As of June 30, 1997, FNFC had issued additional units of call options to
purchase an aggregate of 8,000,000 of the Company's common shares. These calls
were issued for a consideration of 2-1/2 cents per share and entitle the holder
to purchase shares at 10 cents per share or an aggregate of $800,000.
ITEM 2.
FIRST NATIONAL ENTERTAINMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition and results of
operations during the periods included in the accompanying consolidated
financial statements.
GENERAL
The Company's revenues received from loan interest on short term rehab loans
primarily in the Chicagoland area. The Company has a portfolio of loans
ranging from approximately $30,000 to $300,000. Loan fees and interest for six
months are prepaid.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had $232,915 in cash as compared to $38,967
for the same period in 1996. The Company's working capital ratio was 3.9 to 1
at September 30, 1997 representing an increase from a significant negative
ratio in 1996. Operations provided cash of $23,622 during the three months
ended September 30, 1997, as compared to a net cash used in activities in 1996
of $(118,025). Additional funds from financing were obtained from a loan of
$268,947 from Chairman, C. Nootens, the sale of calls for $59,000 and an
investment in the Swiss subsidiary of $416,848.
Accounts receivable and loans receivable increased from $26,945 to $2,411,406.
The increase is due to the acquisition of a corporation obtained from Mr.
Nootens and formed as First National Finance Corp. The Company has received an
assignment for a cash escrow account that should result in additional cash
available for loans in the Finance subsidiary in January, 1998. In addition,
the company is exploring the best option regarding a parcel of lakefront
property in far suburban Chicago for either a joint venture to develop or a
sale.
The Company has $180,275 of deferred loan fees and $114,000 of deferred
interest income which should be realized during fiscal 1998. The Company had
organization costs of $500,000 in connection with the establishment of the two
European subsidiaries involved in trenchless pipe repair technology. The
Company is reviewing these costs with its auditing firm. The Company added
$38,425 in capital expenditures during the quarter ended September 30, 1997
compared to zero for the same period last year.
On October 6, 1996 the Company's Board of Directors approved and issued an
Extension and Optional New Pricing Offer to the holders of Warrants from its
Private Placement of 1,260,000 of the Company's common stock in December 1995.
These 1,260,000 Warrants originally entitled the holders to purchase an
additional share each of the Company's common stock at a price of $1.00 through
an expiration date of December 15, 1997. The Extension and Optional New
Pricing Offer allows an extension at the same price until December 31, 1998 for
no additional consideration OR an extension until December 31, 1999 at a share
price of $.15 for additional consideration of $.05 per Warrant OR an extension
until December 31, 2000 at a share price of $.05 for additional consideration
of $.10 per Warrant.
INVESTMENT IN SUBSIDIARY
11
<PAGE> 12
The Company invested $268,000 in the Swiss pipe repair subsidiary and has 100%
ownership. Outside investors contributed $417,000 to the new start-up.
FINANCING ACTIVITIES
Management believes its working capital and existing credit availability will
be adequate to meet its operating requirements for the foreseeable future. In
connection with any plans for expansion of the entertainment and pipe repair
businesses, the Company is exploring additional funding through a variety of
options. Nothing has been finalized at this time.
RESULTS OF OPERATIONS - Three months Ended September 30, 1997 compared to Three
Months Ended September 30, 1996.
REVENUES
Revenues increased to $142,188 from $103,579 in the prior year primarily
through the increase in loan interest. For last year prior management had
accrued the income from video sales royalties later deemed incorrect by the
outside auditors and written down to zero.
Operating costs and expenses. Operating expenses totaled $78,371 during the
first quarter. This is a decrease from the comparable amount in 1996 of
$216,924. Operating expenses are in fact selling, administrative and general
expenses for the quarter.
The Company had net income of $63,817 compared to a net loss of $(165,135)
later adjusted to $(216,924) for the quarter. The improvement is due to
revenues from the Financing Company and continued reduction in costs.
TAXES ON INCOME
Taxes on income are zero due to the cumulative net operating loss carryforwards
of approximately $23.3 million at September 30, 1997, for federal tax reporting
purposes. The net operating loss carryforwards expire in varying amounts
beginning in the year 2000.
PART II - OTHER INFORMATION
ITEM 5 - OTHER INFORMATION
First National Entertainment Corp., the Company, through its wholly owned U.S.
subsidiary First National Environmental Technologies, Inc. (FNET) has changed
the name of its two subsidiaries. FNAT Umwelttechnik AG was formerly FNAT
Franchising A.G. (FNATU). The Company remains headquartered in Zurich,
Switzerland. The other company which is 80% owned by FNET is KTV Kanal Technik
GMbH & Co. Vertriebs KG. (KTV) located in Bochum, Germany.
Mr. Jurg Mullhaupt is President of FNET and FNATU. Mr. Jorg Vogt is President
of KTV.
FNET has entered into an agreement with Christian Jenny Umwelttechnik for an
exclusive representation of their system for trenchless pipe repair for
building connections. FNET expects to purchase an unspecified number of
systems during fiscal 1998.
12
<PAGE> 13
The agreement with BJR Trading for an exclusive license to offer the "Beaver"
Spot steam trenchless pipe technology in Germany, Switzerland, Austria, the
Netherlands, Belgium and Luxemburg was finalized. The Company agreed to pay
$320,000 for the license. A down payment of $150,000 was made and a promissory
note issued for the balance of $150,000 due by December 31, 1997.
First National Environmental Technologies, Inc. has a memorandum of Agreement
with Multilining International APS to conduct good faith discussions regarding
various alternatives by which the parties might assess and implement possible
cooperative initiatives with respect to Multilining and BJR Trading trenchless
pipe repair technologies in the US market. This exclusive arrangement is valid
through December 31, 1997.
Item 6 Exhibits and Reports 8K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
During the Quarters ended September 30, 1997, the Company filed a report
8K dated September 30, 1997, which, under Item 2 - Acquisition or
Disposition of assets thereunder reported the establishment of the wholly
owned subsidiaries First National Finance Corp. and First National
Environmental Technologies, Inc. Reports on Form 8-K
Under Item 5 - Other Events thereunder, the Company reported the
appointment of a new Board member, Mr. Jurg Mullhaupt, that Mr. Ken Scipta
had become Board Secretary and that Mr. Stephen Denari had resigned as a
Director. Further, the Company had entered into a consulting agreement
with Peter Keefe Productions to perform entertainment industry related
activities. The agreement is on a "at will" basis, which can be ended
with 30 days notice. The report also indicated a memorandum of agreement
to license a steam driven trench- less pipe repair system had been signed.
Finalized cost is discussed in Item 5 above.
13
<PAGE> 14
SIGNATURE
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.
First National Entertainment Corp.
Dated: November 14, 1997 /s/ Charles E. Nootens
-------------------- -----------------------
Charles E. Nootens
President
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIRST
NATIONAL ENTERTAINMENT CORP'S., BALANCE SHEET AT SEPTEMBER 30, 1997 AND
STATEMENTS OF OPERATIONS FOR THREE MONTHS ENDED SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 232,915
<SECURITIES> 0
<RECEIVABLES> 2,336,088
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,073,884
<PP&E> 50,146
<DEPRECIATION> 885
<TOTAL-ASSETS> 4,716,065
<CURRENT-LIABILITIES> 1,111,177
<BONDS> 0
0
186
<COMMON> 528,842
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,716,065
<SALES> 0
<TOTAL-REVENUES> 142,188
<CGS> 0
<TOTAL-COSTS> 78,371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,817
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
