<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
MARK ONE
[X] AMENDMENT #1 TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________________to_________________
Commission file number 0-24128
BIO-PLEXUS, INC.
(Exact name of Registrant as specified in its Charter)
Connecticut 06-1211921
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
384 Q Merrow Road, Tolland Connecticut 06084
(Address of principal executive offices including zip code)
(860) 871-8601
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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 .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class of Common Stock Shares Outstanding as of May 12, 1997
- --------------------- -------------------------------------
Class A Common Stock, no par value 20,000
Common Stock, no par value 7,759,490
The registrant is amending its Quarterly Report on Form 10-Q to reflect the
intrinsic value of the January 1997 Debenture conversion feature, and restating
such report in its entirety.
<PAGE> 2
BIO-PLEXUS, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet at March 31, 1997 and
December 31, 1996 1
Condensed Statement of Operations for the three months
ended March 31, 1997 and 1996 2
Condensed Statement of Cash Flows for the three months
ended March 31, 1997 and 1996 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 2. Change in Securities 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 11
<PAGE> 3
BIO-PLEXUS, INC.
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,010,000 $ 1,322,000
Accounts receivable 627,000 386,000
Inventories
Raw materials 1,179,000 1,314,000
Work-in-process 369,000 271,000
Finished goods 360,000 271,000
------------ ------------
1,908,000 1,856,000
------------ ------------
Other current assets 421,000 430,000
------------ ------------
Total current assets 7,966,000 3,994,000
------------ ------------
Fixed assets, net 8,143,000 8,305,000
Deferred debt financing expenses 431,000 164,000
Patents, net of amortization 82,000 55,000
Other assets 302,000 302,000
------------ ------------
$ 16,924,000 $ 12,820,000
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 3,075,000 $ 3,225,000
Accounts payable and accrued expenses 1,424,000 1,693,000
Accrued interest payable 159,000 27,000
Accrued employee costs 371,000 462,000
------------ ------------
Total current liabilities 5,029,000 5,407,000
------------ ------------
CII debt, net 146,000 131,000
Deferred revenue 1,400,000 --
Other long-term debt, net 8,230,000 7,276,000
Accrued financing expense - CII debt -- 550,000
Redeemable Class A common stock 20,000 20,000
Redeemable common stock warrants 149,000 149,000
Shareholders' equity (deficit)
Common stock, no par value, 12,000,000 authorized,
7,759,490 and 7,046,552 shares issued and
outstanding 52,907,000 46,887,000
Accumulated deficit (50,957,000) (47,600,000)
------------ ------------
Total shareholders' equity (deficit) 1,950,000 (713,000)
------------ ------------
$ 16,924,000 $ 12,820,000
============ ============
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
1
<PAGE> 4
BIO-PLEXUS, INC
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1997 1996
----------- -----------
<S> <C> <C>
Revenue
Sales $ 1,112,000 $ 453,000
Licensing fees (Note 3) 1,500,000 --
----------- -----------
Total revenue 2,612,000 453,000
----------- -----------
Costs and expenses:
Research and development 425,000 380,000
Other operating and engineering costs 1,610,000 942,000
Selling, general and administrative 1,876,000 1,594,000
----------- -----------
Total operating costs and expenses 3,911,000 2,916,000
----------- -----------
Financing expenses:
CII debt:
Interest expense 1,000 6,000
Amortization of deferred debt financing 33,000 29,000
Other financing expenses (Note 4) 2,024,000 276,000
----------- -----------
Total financing expenses 2,058,000 311,000
----------- -----------
Net loss $(3,357,000) $(2,774,000)
----------- -----------
Net loss per common share (Note 2) $ (0.46) $ (0.42)
=========== ===========
Weighted average common shares
outstanding (Note 2) 7,371,577 6,576,783
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
2
<PAGE> 5
BIO-PLEXUS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss $ (3,357,000) $ (2,774,000)
Adjustments to reconcile net loss to cash used
by operating activities:
Depreciation and amortization 353,000 296,000
Inducement expense on conversion (Note 4) 640,000 --
Amortization of deferred debt financing
expenses 33,000 29,000
Amortization of debt discount 1,026,000 116,000
(Increase) in accounts receivable (241,000) (174,000)
(Increase) decrease in inventories (52,000) 388,000
(Decrease) in accounts payable and accrued liabilities (418,000) (148,000)
Increase in accrued interest payable 132,000 86,000
(Decrease) increase in accrued employee costs (91,000) 68,000
Increase in deferred revenue (Note 3) 1,400,000 --
Other 11,000 5,000
------------ ------------
Net cash used in operating activities (564,000) (2,108,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases and construction of fixed assets including
acquisition of land (191,000) (412,000)
Cost of patents (29,000) (8,000)
------------ ------------
Net cash used in investing activities (220,000) (420,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of common stock warrants 250,000 --
Proceeds from exercise of common stock options 50,000 28,000
Proceeds from Debentures 4,700,000 --
Repayments of long-term debt (528,000) (321,000)
------------ ------------
Net cash provided by (used in)
financing activities 4,472,000 (293,000)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 3,688,000 (2,821,000)
Cash and cash equivalents, beginning of
period 1,322,000 11,842,000
------------ ------------
Cash and cash equivalents, end of period $ 5,010,000 $ 9,021,000
============ ============
Supplemental cash flow disclosures:
Cash payments of interest $ 274,000 $ 218,000
Cash payments of income taxes -- 7,000
Surrender of debt upon warrant exercise 3,353,000 35,000
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
3
<PAGE> 6
BIO-PLEXUS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The interim condensed financial statements included herein are
unaudited. In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations and cash flows for the periods presented
have been included. The results of operations for the interim period is not
necessarily indicative of the results of operations to be expected for the full
year. These financial statements should be read in conjunction with the
financial statements and the notes included in the 1996 Annual Report to
Shareholders of Bio-Plexus, Inc.
NOTE 2 - LOSS PER SHARE
Net loss per common share is determined based on the weighted average
number of common shares outstanding during the period. In determining weighted
average common shares outstanding, common share equivalents are excluded from
the computation as their effect is anti-dilutive.
Conversion of $2,184,000 of unsecured term notes and a conversion of
the remaining balance of a $2,500,000 term loan occurred during the first
quarter of 1997. If the conversion of the debt had taken place on January 1,
1997, the net loss per common share would have been ($.43) for the three
months ended March 31, 1997. This amount was calculated by adjusting the
reported net loss by the interest on the converted debt and the associated
amortization of debt discount, and adjusting the weighted average shares for
the shares issued on conversion.
NOTE 3 - LICENSING AGREEMENTS
On January 28, 1997, the Company entered into a Development and License
Agreement and a Supply Agreement with Johnson & Johnson Medical, Inc. ("JJMI")
of Arlington, Texas. Under the terms of the agreements, Bio-Plexus, Inc. will
develop and manufacture safety needle assemblies for JJMI utilizing its
self-blunting technology, which will be used by JJMI, under an exclusive
world-wide license granted by the Company, to manufacture and sell a new safety
I.V. catheter. The Company received $2,900,000 in licensing fees and funding to
complete the development of the safety needle assemblies and for the development
of manufacturing equipment and tooling. JJMI has agreed to acquire initial
production equipment in amounts up to $1,800,000, to purchase certain minimum
quantities of safety needle assemblies annually, and to pay certain minimum
annual royalties. During the first quarter, the $1,500,000 licensing fee revenue
was recognized and the $1,400,000 development funding has been deferred and will
be recognized over the term of the related development project.
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NOTE 4 - OTHER SIGNIFICANT CAPITAL TRANSACTIONS
In January and February, warrants relating to the 1993 and 1994
unsecured term notes were exercised into shares of common stock. The Company
reduced the exercise price from $9.00 to $7.00 on the warrants and agreed to
make payments in lieu of interest through 1997 at a rate of 8%. As a result of
the transaction, warrant holders surrendered $2,184,000 of the term notes and
exercised warrants for 311,967 shares of common stock. A one time charge of
$640,000 was incurred due to the reduction in the warrant exercise price and the
cash payments in lieu of interest through 1997.
In January, warrants related to Private Placement Notes sold in 1995
were exercised for 35,714 shares of common stock at an exercise price of $7 per
common share. Net proceeds to the Company as a result of the exercise were
$250,000.
On January 30, 1997, pursuant to Regulation S of the Securities Act of
1933, the Company issued 5% Convertible Debentures due February 4, 1999 in the
aggregate principal sum of $5,000,000 (the "Debentures"). Interest is payable
quarterly in arrears beginning April 30, 1997 until repayment or conversion of
the debt occurs. The Debentures are convertible into common shares in one-third
step progression, 45, 75 and 105 days from the closing at the lesser of $9.00
per common share or 80% of the average closing bid price over the ten day
trading period ending on the day prior to the date notice of conversion is filed
with the number of shares not to exceed 1,350,000. Beginning June 30, 1997 the
Debentures will be convertible into common stock at the lesser of $9.00 per
common share or 75% of the average closing bid price of the Company's common
stock, as reported by Bloomberg L.P., over the ten day trading period ending on
the day prior to the date the notice of conversion is filed with the Company. In
the event the above calculation results in shares to be issued greater than
1,350,000, the Company would redeem the outstanding debentures at the price paid
plus any accrued interest thereon. In the event the closing bid price of the
Company's stock exceeds $14.70 per share for twenty consecutive trading days
during any period of time 45 days after the closing, all outstanding Debentures
will automatically convert into common stock within ten business days. Of the
Debenture proceeds, approximately $1,665,000 has been allocated to
paid-in-capital to reflect the intrinsic value of the conversion feature. This
amount was calculated at the date of the issue as the difference between the
most beneficial conversion price and the then fair value of the common stock.
The corresponding debt discount is being amortized through the date the
Debentures become convertible. As of March 31, 1997, $950,000 was charged to
other financing expenses.
On February 11, 1997, the Company entered into a Royalty Modification
agreement with Connecticut Innovations Inc. ("CII") to satisfy the $550,000
royalty obligation via the issuance of 78,572 shares of common stock.
On March 31, 1997 the Company entered into an agreement to retire the
remaining balance of a three-year $2,500,000 term loan that was entered into in
March 1995 by prepaying $1,050,000 of the principal amount of the outstanding
note and converting the balance of the principal amount of the note, including
interest accrued through March 31, 1997, into 241,627 shares of common stock
based on a conversion price of $4.50 per share. The Company may be required to
purchase certain shares at March 31, 1998, under defined circumstances.
NOTE 5 - COMMITMENTS
As of March 31, 1997, the Company had capital expenditure purchase
commitments outstanding of approximately $475,000, expected to be financed
through an existing financing arrangement.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements included in this Management's Discussion and
Analysis of the Results of Operations and Financial Condition which are not
historical facts may be deemed to contain forward looking statements with
respect to events the occurrence of which involves risks and uncertainties,
including, without limitation, the Company's expectation regarding gross profit
and operating income.
OVERVIEW
Since its inception in September 1987 through March 31, 1997,
Bio-Plexus has incurred cumulative ongoing losses totaling $50,957,000. During
the same period, the Company's principal focus has been the design, development,
testing and evaluation of its blood collection safety needle and the design and
development of the molds, needle assembly machines and production processes
needed for manufacturing the blood collection safety needle.
Operating revenues increased to $1,112,000 in the first quarter of
1997, compared to $453,000 for the same period in 1996. Additionally, in January
1997, the Company recognized licensing fee revenue of $1,500,000, resulting in
total revenues for the first quarter of $2,612,000. Operating costs and
expenses, consisting of marketing, general and administrative expenses together
with research and development costs and other operating and engineering expenses
increased by $995,000 to $3,911,000 in the first three months of 1997, compared
to $2,916,000 over the same period the prior year.
The Company is currently constructing production equipment and tooling
for winged intravenous sets which it expects to begin marketing on a limited
basis in the near future. With the addition of the new blood collection needle
assembly and packaging system, the Company believes it will have sufficient
capacity to meet its production needs for blood collection needles for the
balance of 1997, when the system is fully operational. The Company also
continues to review its cost of operations. In order to achieve profitability,
further significant reductions in per-unit manufacturing costs and increases in
sales and manufacturing capacity and capabilities are necessary. The Company
expects substantial progress in sales growth in 1997, but expects that ongoing
losses from operations will continue at least for the balance of the year.
During 1997, the Company has determined it will attempt to establish
joint development, manufacturing and marketing agreements on one or more of its
major product lines, similar to the agreement it reached with JJMI on its
safety I.V. catheter. Such arrangements could assist the Company in raising
additional capital and help fund research and development of new products, as
well as accelerate the rate of sales growth. However, such arrangements could
also decrease revenue per unit for the Company, as a result of sharing revenue
with a strategic partner. The Company believes the overall benefits and
potential for greater market share outweigh the disadvantages of a possible
decline in per unit revenue, or other disadvantages that may result from such
arrangements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
The Company had operating revenues of $1,112,000 for the quarter ended
March 31, 1997, compared with revenues of $453,000 for the prior year. The
increase in sales is attributable to the expansion of its account base and the
initiation of sales overseas through certain European distributors.
Research and development expenses were $425,000 for the quarter ended
March 31, 1997, compared to $380,000 for the prior year. The Company's efforts
in each of these periods reflects the
6
<PAGE> 9
continuing focus on improving the design and development of needle assembly
systems for the blood collection needle, and the production molds used to
produce its plastic components, as well as its efforts to develop new products.
The increase in these costs in the first quarter of 1997, compared to the same
period a year ago, resulted in part from accelerated research and development on
its winged set and safety I.V. catheter.
Other operating and engineering costs were $1,610,000 for the quarter
ended March 31, 1997, compared with $942,000 for the prior year. This increase
is attributable to higher cost of goods sold resulting from a significantly
higher sales volume over the same period last year.
Selling, general and administrative expenses were $1,876,000 for the
quarter ended March 31, 1997, compared with $1,594,000 for the prior year. This
increase resulted primarily from the addition of sales and marketing staff and
related activities during the latter part of 1996, and the addition of a Vice
President, International Marketing and Sales.
Financing expenses for the quarter ended March 31, 1997 were $2,058,000
compared to $311,000 for the prior year. The increase resulted primarily from an
increase in other financing expenses. Other financing expenses include other
interest expense less interest income, and, in the first quarter of 1997, a one
time charge of $640,000 related to the conversion of warrants to common stock
and a charge of $950,000 related to the amortization of the January 1997
Debenture debt discount (see Note 4). The one time charge consists of $491,000
of inducement expense directly related to the reduction of the exercise price on
the debt conversion from $9.00 to $7.00, and $149,000 of cash payments to be
made in 1997 in lieu of interest.
Other interest expense increased to $486,000 in 1997 from $414,000 in
1996, as a result of higher average outstanding balances under the Company's
equipment lease financing.
LIQUIDITY AND CAPITAL RESOURCES
The Company's need for additional funds has continued from period to
period, as a result of its ongoing research and development activities
surrounding the Punctur-Guard(R) blood collection needle and production
processes, its need for additional capital expenditures on molds and production
equipment, its efforts to develop new products, and the expansion of its staff.
To date, the Company has financed its operations primarily through borrowings
and the sale of equity securities. Through March 31, 1997, the Company has
received net proceeds of approximately $28,840,000 through borrowings and the
sale of debt securities and $40,469,000 through the sale of equity securities.
Of the net equity proceeds, $17,575,000 was received from its 1995 public
offering, $14,191,000 was received from the Company's initial public offering
and the balance of $8,703,000 was received through the private placement of
equity securities.
7
<PAGE> 10
On February 18, 1997, the Nasdaq Stock Market informed the Company that
it would move the Company's securities to the Nasdaq SmallCap Market effective
February 20, 1997, because the Company no longer met the Nasdaq National Market
listing requirements. To maintain its listing on the SmallCap Market, the
Company will need to meet its ongoing listing requirements, including its net
tangible asset requirement of $1,000,000. At the time of the move to the
SmallCap Market, Nasdaq informed the Company it met the SmallCap Market initial
listing requirements.
The Company's primary capital requirements for 1997 will include
additional equity to meet Nasdaq SmallCap listing requirements and funds for
working capital to sustain ongoing operations including debt service, and to
continue its research and development efforts to improve and increase
manufacturing capacity and capabilities and reduce manufacturing costs. The
Company also anticipates additional capital expenditures both for its blood
collection needle program as well as new products, including further research
and development on its winged intravenous set and safety I.V. catheter. The
Company is considering the development of a strategic partnership with one or
more major companies to raise additional funds and assist with the development
and expansion of its product line, in addition to the agreement it already has
in place with JJMI on the safety I.V. catheter. Its overall strategy is to
minimize expenditures on new product research and development, as well as
production capacity for new products until such time as either additional
financing is secured or until it determines that additional strategic
partnerships are feasible. The Company believes its current resources together
with funds
8
<PAGE> 11
generated from sales of its products, will be sufficient to fund its cash
requirements for the first half of 1997. These estimated cash requirements do
not include significant expenditures in new product areas and amounts needed
could vary based on the actual growth of sales and the level of additional
investment and time required to further increase manufacturing capacity and
capabilities, and reduce manufacturing costs. In addition to considering
strategic partnerships, the Company is reviewing alternative financing
strategies to raise funds in 1997, and is also reviewing opportunities to reduce
overhead costs. Failure to raise needed capital would have an adverse effect on
the Company and its ability to sustain operations beyond the first half of 1997.
To date the Company has not been adversely impacted by inflation.
PART II. OTHER INFORMATION
ITEM 2. Change in Securities
In January 1997, the Company reduced the exercise
price of certain warrants issued in 1993 and 1994 from $9.00
to $7.00 per share and agreed to continue payments in lieu of
interest through 1997 on related notes issued with such
warrants. As a result of such action, holders of warrants for
290,538 shares exercised their warrants for such shares by
the surrender of the related notes. The shares of common stock
were issued pursuant to an exemption from registration under
Section 3(a)(9) of the Securities Act of 1933, as amended (the
"Securities Act").
In January, 1997, the Company also issued 35,714
shares of common stock to a warrant holder upon the exercise
of the holder's warrant. The shares of common stock were
issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act.
On February 11, 1997, the Company issued to CII
100,000 shares of common stock upon the conversion of an
outstanding note held by CII. The shares of common stock were
issued pursuant to an exemption from registration under
Section 3(a)(9) of the Securities Act.
On March 31, 1997, the Company and the Connecticut
Development Authority ("CDA") entered into a letter agreement,
which among other things, modified an outstanding note to make
it convertible into common stock and effected the conversion
of a portion of the note into 241,627 shares of common stock.
The shares of common stock were issued pursuant to an
exemption from registration under Section 3(a)(9) of the
Securities Act.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------ ----------- ----------------
<S> <C> <C>
4.4.a Letter agreement dated March 31, 1997 Filed on May 15, 1997 with Form 10-Q (unamended)
between the Company and CDA. for the quarterly period ended March 31, 1997.
4.6 Offshore Convertible Securities Subscription Filed on May 15, 1997 with Form 10-Q (unamended)
Agreement dated January 30, 1997 between for the quarterly period ended March 31, 1997.
the Company and Shepherd Investments
International Ltd., as amended by Letter
agreement dated March 25, 1997, and as
further amended by Letter agreement dated
April 16, 1997.
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C>
10.16 Employment Agreement dated January 13, 1997 Filed on May 15, 1997 with Form 10-Q (unamended) for
between the Company and Lucio Improta. the quarterly period ended March 31, 1997.
27 Financial Data Schedule. Filed with this Report.
</TABLE>
(b) Reports on Form 8-K
(1) A report on Form 8-K was filed on February 14, 1997,
reporting the sale of $5.0 million aggregate principal
amount of convertible debentures pursuant to Regulation S.
(2) A report on Form 8-K was filed on February 28, 1997,
reporting a change in the listing of the Company's shares
of common stock from the Nasdaq National Market to the
Nasdaq SmallCap Market.
10
<PAGE> 13
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.
Bio-Plexus, Inc.
(Registrant)
July 30, 1997 /s/ Ronald A. Haverl
_____________________ ________________________________
(Date) Ronald A. Haverl
Chairman of the Board, Chief
Executive Officer, and Treasurer
(Principal Executive, Financing
and Accounting Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,010,000
<SECURITIES> 0
<RECEIVABLES> 627,000
<ALLOWANCES> 0
<INVENTORY> 1,908,000
<CURRENT-ASSETS> 7,966,000
<PP&E> 8,143,000<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,924,000
<CURRENT-LIABILITIES> 5,029,000
<BONDS> 8,376,000
0
0
<COMMON> 52,907,000
<OTHER-SE> 169,000<F2>
<TOTAL-LIABILITY-AND-EQUITY> 16,924,000
<SALES> 1,112,000
<TOTAL-REVENUES> 2,612,000
<CGS> 0
<TOTAL-COSTS> 3,911,000
<OTHER-EXPENSES> 621,000<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,437,000
<INCOME-PRETAX> 3,357,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,357,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,357,000
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.46
<FN>
<F1>This value is net of depreciation.
<F2>Value represents redeemable common stock and redeemable common stock warrants.
<F3>Amount includes $52,000 of interest income.
</FN>
</TABLE>
