U.S. 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
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
Commission File Number 0-24940
PIONEER COMMERCIAL FUNDING CORP.
(Exact name of small business issuer as specified in its charter)
New York 13-3763437
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
21700 Oxnard Street, Suite 1650, Woodland Hills, California 91367
(Address and Zip Code of Principal Executive Offices)
(818) 346-1921
Issuer's Telephone Number
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 .
There were 5,542,272 shares of the registrant's common stock
outstanding as of May 1, 1999.
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<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Pioneer Commercial Funding Corp.
BALANCE SHEETS
March December 31
1999 1998
(Unaudited)
ASSETS
Cash and cash equivalents $ 2,266,975 $ 1,503,788
Mortgage warehouse loans receivable, net of allowance for loan losses 20,015,724 33,640,202
Loans held for resale, net of allowance for loan losses 579,993 705,479
Receivable for loans shipped 1,716,969 1,716,969
Accrued interest and fee receivable 895,651 825,340
Notes receivable-current portion 670,220 176,667
Prepaid and other assets 145,331 180,503
Total Current Assets 26,290,863 38,748,948
Fixed Assets
Furniture and equipment 671,173 634,376
Proprietary computer software 551,114 551,114
Leasehold improvements 198,689 198,689
1,420,976 1,384,179
Less accumulated depreciation and amortization 699,515 651,383
Net Fixed Assets 721,461 732,796
Investment securities available for sale 150,000 318,750
Notes receivable-noncurrent portion 1,076,287 911,770
Other assets 460,629 475,063
Total Assets $ 28,699,240 $ 41,187,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage warehouse loans payable $ 21,639,911 $ 33,384,925
Accounts payable and accrued expenses 235,864 213,646
Accrued interest and fees 457,054 777,798
Due to mortgage banking companies 325,844 220,228
Deferred loan fees 29,000 29,000
Deferred legal fees 66,573 65,395
Total Current Liabilities 22,754,246 34,690,992
Subordinated debt 1,626,000 1,726,000
Total Liabilities 24,380,246 36,416,992
Commitments and Contingencies
Stockholders' Equity:
Common stock - $.01 par value; authorized 20,000,000 shares; issued and
outstanding - 5,542,272 at March 31, 1999
and December 31, 1998 55,423 55,423
Additional paid-in capital 14,556,952 14,556,952
Accumulated deficit (10,218,381) (9,935,790)
Accumulated other comprehensive income (75,000) 93,750
Total Stockholders' Equity 4,318,994 4,770,335
Total Liabilities and Stockholders' Equity $ 28,699,240 $ 41,187,327
The accompanying notes are an integral part of these statements.
F1
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Pioneer Commercial Funding Corp.
STATEMENTS OF OPERATIONS
For the three month periods ended March 31, 1999 and 1998
(Unaudited)
1999 1998
------------------ ------------------
Income:
Interest income $ 806,254 $ 1,387,817
Commissions and facility fees 31,333 48,000
Processing fees 245,185 586,990
------------------ ------------------
Total Income 1,082,772 2,022,807
------------------ ------------------
Interest and Fee Costs:
Interest expense-warehouse and lines of credit 784,481 1,119,404
Bank charges and facility fees 25,000 37,500
Bank processing fees 19,398 27,495
------------------ ------------------
Total Interest and Fee Costs 828,879 1,184,399
------------------ ------------------
------------------ ------------------
Net Interest and Fee Income 253,893 838,408
------------------ ------------------
Other Operating Expense:
Compensation and benefits 255,088 226,865
Depreciation and amortization 48,132 13,884
Professional fees 115,691 95,762
Utilities 8,890 15,223
Rent 48,259 44,058
Repairs and maintenance 1,486 4,926
Other 75,293 117,304
------------------ ------------------
Total Other Operating Expenses 552,839 518,022
------------------ ------------------
------------------ ------------------
Income (loss) from operations (298,946) 320,386
------------------ ------------------
Other Income and Expense:
Interest income - other 18,333 21,984
Interest expense-other (1,178) (1,178)
Equity in loss of affiliate - (25,000)
------------------ ------------------
Total Other Income and Expense 17,155 (4,194)
------------------ ------------------
Income (Loss) Before Taxes Based on Income (281,791) 316,192
Provision for taxes based on income 800 10,000
================== ==================
Net Income (Loss) $ (282,591) $ 306,192
================== ==================
Basic and Diluted Income (Loss)
Per Share of Common Stock $ (0.05) $ 0.06
================== ==================
Weighted Average Number of Shares 5,542,272 5,519,800
================== ==================
The accompanying
notes are an integral part of these statements.
F-2
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Pioneer Commercial Funding Corp.
STATEMENTS OF COMPREHENSIVE INCOME
For the three month periods ended March 31, 1999 and 1998
(Unaudited)
March 31, March 31,
1999 1998
------------------ ------------------
Net income (loss) $ (282,591) $ 306,192
Change in unrealized gain on investment in
securities available for sale (168,750) (207,000)
================== ==================
Comprehensive net income (loss) $ (451,341) $ 99,192
================== ==================
The accompanying notes are an integral part of these statements.
F-3
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Pioneer Commercial Funding Corp.
STATEMENT
OF CHANGES
IN
STOCKHOLDERS'
EQUITY For
the three
month
period
ended
March 31,
1999
(Unaudited)
Additional Other Total
Common Paid-in Accumulated Comprehensive Stockholders'
Stock Capital Deficit Income (Loss) Equity
--------------- --------------- --------------- --------------- ---------------
Balance at December 31, 1998 $ 55,423 $ 14,556,952 $ (9,935,790) $ 93,750 $ 4,770,335
Change in unrealized gain on
investment in securities available
for sale (168,750) (168,750)
Net (loss) for period (282,591) (282,591)
=============== =============== =============== =============== ===============
Balance at March 31, 1999 $ 55,423 $ 14,556,952 $ (10,218,381) $ (75,000) $ 4,318,994
=============== =============== =============== =============== ===============
The accompanying notes are an integral part of these statements.
F-4
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Pioneer Commercial Funding Corp.
STATEMENTS OF
CASH FLOWS For the three month
periods ended March 31, 1999 and
1998
(Unaudited)
March 31, March 31,
1999 1998
---------------- -----------------
Cash Flows from Operating Activities:
Net income (loss) $ (282,591) $ 306,192
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:
Depreciation and amortization
48,132 13,884
(Increase) decrease in --
Mortgage warehouse loans receivable
13,624,478 (1,895,056)
Loans held for resale
125,486 -
Accrued interest receivable
(70,311) (267,427)
Prepaid expenses
35,172 (2,601)
Notes receivable
(658,070) -
Other assets
14,434 (12,677)
Increase (decrease) in --
Accrued interest payable
(320,744) 548,949
Due to mortgage banking companies
105,616 (62,823)
Accounts payable and accrued expenses
22,218 11,014
---------------- -----------------
Net Cash Provided by (Used in) Operating Activities
12,643,820 (1,360,545)
---------------- -----------------
Cash Flows from Investing Activities:
Purchase of fixed assets
(36,797) (245,013)
Investment in and advances to joint venture
- (132,500)
Deposits on furniture and fixtures
- (56,900)
---------------- -----------------
Net Cash Used in Investing Activities
(36,797) (434,413)
---------------- -----------------
Cash Flows from Financing Activities:
Net increase (decrease) in borrowings used in operations,
net of issuance costs
(11,745,014) 1,816,598
Increase in deferred expenses
1,178 1,178
Repayment of subordinated debt
(100,000) -
Net proceeds from issuance of stock
- 241,000
---------------- -----------------
Net Cash (Used) Provided by Financing Activities
(11,843,836) 2,058,776
---------------- -----------------
Net Increase in Cash
763,187 263,818
Cash and Cash Equivalents at the Beginning of the Period
1,503,788 2,972,845
---------------- -----------------
Cash and Cash Equivalents at the End of the Period $ 2,266,975 $ 3,236,663
================ =================
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 563,605 $ 636,027
================ =================
Income taxes paid $ 829 $ -
================ =================
Non Cash Financing Activities
Conversion of mortgage loans receivable to notes receivable $ 658,070 $ -
================ =================
The accompanying notes are an integral part of these
statements.
F-5
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Pioneer Commercial Funding Corp..
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited financial
statements for Pioneer Commercial Funding Corp. (the Company) contain
all adjustments of a recurring nature considered necessary for a fair
presentation of its financial position as of March 31, 1999 and
December 31, 1998 (audited), the results of operations, comprehensive
income, stockholders' equity and cash flows for three month periods
ended March 31, 1999 and 1998. The results of operations for the three
month periods ended March 31, 1999 and 1998 are not necessarily
indicative of the Company's results of operations to be expected for
the entire year.
The accompanying unaudited interim financial statements have been
prepared in accordance with instructions to Form 10-Q and certain other
foreign agencies regulating financial reports for publicly traded
investor companies and, therefore, do not include all information and
footnotes required to be in conformity with generally accepted
accounting principles. The financial information provided herein,
including the information under the heading, "Management's Discussion
and Analysis of Financial Condition and Results of Operations," is
written with the presumption that the users of the interim financial
statements have read, or have access to, the Company's December 31,
1998 audited financial statements and notes thereto, together with the
Management's Discussion and Analysis of Financial Condition and Results
of Operations as of December 31, 1998 and for the year then ended
included in the Company's filings on April 15, 1999 with the SEC on
Form 10-KSB.
2. LOANS HELD FOR RESALE
In 1997, the Company in accordance with its loan and security agreement
took possession from a customer in the process of liquidating under
Chapter 7 of the Bankruptcy Code, 37 loans it funded having an
aggregate value of $4.5 million. The Company has a perfected interest
in the loans and during 1998 sold 32 of the loans at a net discount of
$72,070. One loan in the amount of $132,090 was sold in the first
quarter of 1999 for $125,486. The four loans unsold at March 31, 1999
with an original loan amount of $566,026, together with holdback
receivables on sold loans of $180,945, are held at net realizable value
which includes a reserve of $166,978.
2
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3. RECEIVABLE FOR LOANS SHIPPED
During October 1997, the Company warehoused $1.7 million in mortgages
for the same customer as described in Note 2 above, who used a third
party conduit, American Financial Mortgage Corporation, to sell its
loans to an investor, Norwest Funding, Inc. The Company provided
instructions to the third party conduit that the funds were to be wired
by the investor to the Company's bank. The investor mis-wired the funds
to the conduit's bank, Corestates Bank, N.A. The conduit's bank has
refused to return the funds. The Company is taking actions, including
legal action, to collect the funds from the conduit, the conduit's
guarantor, the investor and the conduit's bank. The Company's lender,
Bank One Texas, N.A. ("Bank One"), has joined the litigation as a
co-plaintiff in support of the Company's position. In addition, the
Company has a $5 million personal guarantee from the third party
conduit's primary shareholder and an additional $2 million guarantee
from the customer's primary shareholder. Although it is impossible to
assess with accuracy the ultimate outcome of this matter, management is
confident that it will recover the funds.
4. NOTES RECEIVABLE
On November 18, 1998, as settlement was reached with a guarantor of a
mortgage banking customer's defaulted line of credit. The guarantor was
also a Company stockholder. Pursuant to the settlement, an entity which
is an affiliate of Leedan (Note 7) accepted $530,000 of the guarantor's
recognized debt to the Company in exchange for the guarantor's shares
in the Company. This entity paid the Company $176,667 and issued two
notes of $176,667 each with maturity dates of August 23, 1999 and May
23, 2000, respectively. Interest is payable quarterly at an annual rate
of 8.25% commencing
three months after the November 23, 1998 date of issuance. $ 353,334
Pursuant to the settlement stated above, the guarantor also issued two
notes to the Company in the amounts of $265,103 and $470,000,
respectively. Interest is payable quarterly at an annual rate of prime
plus 1/2% commencing three months after the
November 18, 1998 date of issuance. Both notes mature November 18, 2000. 735,103
On March 29, 1999, a settlement was reached with two clients and their
guarantor wherein the remaining loans on each client's line and
interest and fees due through October 31, 1998 were replaced with a
note from each client guaranteed by the client's guarantor in the
amounts of $453,430 and $204,640, respecitvely, each payable in
sixteen equal monthly installments plus interest at an annual rate of 10%. 658,070
------------------
Total 1,746,507
Less current portion 670,220
$ 1,076,287
------------------
------------------
3
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5. INVESTMENT IN AND ADVANCES TO PIONEER HOME FUNDING
On April 16, 1997 the Company entered into a joint venture agreement
with Maryland Financial Corporation (?MFC?) to form Pioneer Home
Funding, LLC, a California Limited Liability Company, (?PHF?). The
Company accounts for this investment on the equity method. The
agreement provides that the Company and MFC would maintain 80% and 20%
ownership interests, respectively, in PHF. An amendment to the
agreement was made on October 31, 1997. This amendment provides that
the Company would contribute $40,000 for a 20 percent interest in PHF.
In addition, the Company may from time to time, at its option, make
loans to PHF as needed. Under this agreement the Company has the option
to convert loans made to PHF into an 80% interest in PHF. As of March
31, 1999, the Company has advanced as a loan receivable $275,345
against which the Company has reserved $110,000 as uncollectable.
6. INVESTMENT IN FIDELITY FIRST MORTGAGE CORP. (FFIR)
On July 7, 1997 the Company purchased 300,000 shares at $.75 per share
of Fidelity First Mortgage Corp., NASDAQ (FFIR) for a total investment
of $225,000. FFIR shares closed on March 31, 1999 at $.50 per share.
Fidelity First Mortgage is based in Columbia, Maryland and funds
conforming and non-conforming single family residential mortgages in
Maryland, Virginia, Delaware, Florida, North and South Carolina.
7. LINE OF CREDIT AND CAPITAL MAINTENANCE AGREEMENT
On February 18, 1999, Bank One renewed the credit facility with a borrowing
limit of $40,000,000 through April 30, 1999. On April 12, 1999, the Company was
notified by the Bank that they believe the Company will be able to negotiate an
extension of the line of credit agreement. In addition, they indicated that a
six month extension, if needed, would most probably be granted. Effective June
30, 1998 Leedan Business Enterprise Ltd. (?Leedan?), a 49% owner of the Company
entered into a Capital Maintenance Agreement with Bank One wherein Leedan will
cause capital contributions or subordinated debt advances, up to $2 million, to
be made to the Company in order to maintain an adjusted Company net worth of a
least $8 million, upon official written request by Bank One. This agreement will
continue in effect until the Company has paid its obligation to Bank One and
Bank One terminates its commitment to supply the Company credit (See also Note
8).
8. SUBORDINATE DEBT
On November 26, 1997, the Company issued $1,000,000 in subordinated debt as part
of a $4 million private placement. The private placement provided for a minimum
purchase of $250,000 (1 unit) with each unit obtaining 7,500 Warrants that allow
for the purchase of 7,500 shares. The exercise price of the shares is equal to
the price of the Company?s stock as of the date of issue of the subordinated
debt. The Company has 30,000 Warrants outstanding (7,500 per unit for 4 units).
The subordinated debt carries an interest rate of 10% per annum and matures on
November 25, 2002. The Company?s stock price on November 26, 1997 was $2.875 On
September 11, 1998 three subordinated debt advances pursuant to the Leedan
Capital Maintenance Agreement (See also Note 7) were made to the Company
totaling $726,000 secured by notes. The notes are due when a replacement for the
Bank One lending facility is in place, with interest paid quarterly at 11% per
annum. During the first quarter of 1999, $100,000 of the subordinate debt was
repaid.
4
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
From March of 1997 to October 30, 1998, the Company had a credit agreement with
Banc One, Texas, N.A. (?Bank One?). Pursuant to the Credit Agreement, most
recently amended February 18, 1999, Bank One provided the Company with up to a
$40,000,000 revolving line of credit through April 30, 1999. On April 12, 1999,
the Company was notified by the Bank that they believe the Company will be able
to negotiate an extension of the line of credit agreement. In addition, they
indicated that a six month extension, if needed, would most probably be granted.
As collateral security for its indebtedness to Bank One under the Credit
Agreement, the Company has granted to Bank One a security interest in various
assets including, but not limited to, all promissory notes acquired by the
Company with respect to any loans funded by the Company with proceeds of the
Bank One credit line and all mortgages or other forms of collateral securing the
funding of such loans. In addition, Leedan Business Enterprise Ltd., a 49.2%
shareholder of the Company, has guaranteed Bank One, that it will maintain the
Company?s net worth (including subordinated debt) at a minimum level of $8
million, up to an additional investment or loan of $2 million.
Results of Operations
Three Month Period Ended March 31, 1999 Compared with the Three Month Period
Ended March 31, 1998.
Revenues. During the three month period ended March 31, 1999 revenues decreased
from $2,022,807 for the three month period ended March 31, 1998 to $1,082,772.
The volume of loan fundings during the three month periods ended March 31, 1999
and 1998 totaled approximately $90 million and $130 million, respectively. Such
decreases in revenues, loan funding, interest and processing fees were due to
the decrease in loan volume experienced by the Company during the latter period.
The reduction in loan volume was due to the reduction in the Company's line of
credit from Bank One and the number and amount of stale loans in the Company's
portfolio of loans that take up space on the Company's line of credit but do not
yield processing or interest income.
During the three month period ended March 31, 1999, the Company financed a total
of 1,043 loans totaling $89,600,679 with a weighted average principal amount of
$85,907 for an average duration of 42 days per borrowing which amounts included
1,004 loans funded through bank borrowings aggregating $87,109,263 in weighted
average principal amounts of $86,762. During the three month period ended March
31, 1998, the Company financed a total of 2,316 loans totaling $130,772,172 with
a weighted average principal amount of $56,465 for a duration of 33 days per
borrowing which amounts included 2,209 loans funded through bank borrowings
aggregating $127,096,217 in weighted average principal amounts of $57,536.
Direct Costs. During the three month periods ended March 31, 1999 and 1998,
interest expense and other bank charges accrued on the Company?s revolving line
of credit amounted to $828,879 and $1,184,399, respectively. The decrease in
interest expense and bank fees was due to a decrease in the use of the Company's
bank credit facility engendered by the above-described decrease in credit limit.
<PAGE>
Other Operating Expenses. The Company's other operating expenses of $552,839
during the three month period ended March 31, 1999 consisted primarily of salary
and benefits of $255,088; accounting and legal fees of $115,691; rent of $48,259
and depreciation of $48,132. The Company's operating expenses of $518,022 during
the three month period ended March 31, 1998 consisted primarily of salaries and
benefits of $226,865 and legal and accounting fees of $95,762 and rent of
$44,058.
Net Loss Versus Net Income. During the three month period ended March 31, 1999
the Company incurred a net loss of $282,591 primarily due to the reduction in
volume of business and the burden of non-performing loans in the portfolio.
During the three months the Company?s volume of business was reduced as a result
of the tightening of investor cash available for customer loans, particularly
?125? loans which previously comprised a substantial portion of the number of
loans funded by the Company. 125 loans are bill consolidation loans with high
loan to value ratios that are more dependant on the borrower?s credit than the
underlying real estate value. Income from operations for the three months ended
March 31, 1998 of $306,192 resulted from high volumes of loans, including 125
loans, which preceded the funds shortage that lead to the recent reduction in
lines of credit, loan volume and the increase in stale loans.
Liquidity and Capital Resources.
At March 31, 1999, the Company had cash of $2,266,975, working capital of
$3,536,617 and a current ratio of 1.16 to 1. At the Company's year end of
December 31, 1998, it reflected cash of $1,503,788, working capital of
$4,057,956 and a current ratio of 1.2 to 1.
Cash Flow.
During the three months ended March 31, 1999 the Company was able to provide
$763,187 net increase in cash flows, primarily as a result of reducing loans
receivable. For the three months ended March 31, 1998, the Company generated
$263,818 of net cash primarily due to borrowings, issuances of stock.
The Company believes that its cash flows from operations and continuing lines of
credit will be sufficient to meet its financing requirements for at least the
next twelve month period.
Year 2000 Computer Readiness.
The Year 2000 (?Y2K?) issue is the result of computer programs using a two-digit
format, as opposed to four digits, to indicate the year. Such computer systems
will be unable to interpret dates beyond the year 1999, which could cause a
system failure or other computer errors, leading to disruptions in operations.
The Company has two basic computer functions, accounting and collateral
tracking. Date sensitive calculations such as fees and interest charges and due
dates on loans comprising the Company?s warehouse loans receivable and payable
would be negatively effected if the accounting and collateral tracking systems
were not compliant after the end of 1999. The Company, with the assistance of
outside software contractors, is in the process of changing its accounting and
collateral tracking computer systems from non-compliant systems run on AS400
hardware to a compliant system run on a Windows NT network. Final implementation
of fully tested and operationally Y2K compliant systems is projected to be
complete by the end of the second quarter of 1999. Cost incurred to date for
computer system enhancement, which includes work flow technology and collateral
document scanning for electronic storage as well as Y2K compliance, is
approximately $385,000 which is included in equipment and software fixed assets.
Additional cost to complete the project are expected to be less than $65,000.
The Company?s banks and lender have communicated that they will be Y2K compliant
by the end of 1999. No other third party Y2K compliance is expected to have a
material impact on the operations of the Company.
<PAGE>
Other.
This report contains forward-looking statements and information that is based on
management's beliefs and assumptions, as well as information currently available
to management. When used in this document, the words "anticipate," "estimate,"
"expect," "intend" and similar expressions are intended to identify forward-
looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Such statements are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or expected. Among the key factors that may have a direct bearing on
the Company's operating results are fluctuations in the economy, the degree and
nature of competition, the risk of delay in product development and release
dates and acceptance of , and demand for, the Company's products.
<PAGE>
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
The following document has been filed exclusively with the
Securities and Exchange Commission:
Exhibit No. 27 Description Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter for which this report has been filed.
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Pioneer Commercial Funding Corp.
By
John O'Brien
Principal Financial Officer
Dated: May 17, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and statements of operations filed as part of the Company's quarterly
report on Form 10-QSB and is qualified in its entirety by reference to such
report.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,266,975
<SECURITIES> 0
<RECEIVABLES> 22,628,344
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,290,863
<PP&E> 1,420,976
<DEPRECIATION> 699,515
<TOTAL-ASSETS> 28,699,240
<CURRENT-LIABILITIES> 22,754,246
<BONDS> 0
0
0
<COMMON> 55,423
<OTHER-SE> 14,556,952
<TOTAL-LIABILITY-AND-EQUITY> 28,699,240
<SALES> 0
<TOTAL-REVENUES> 1,082,772
<CGS> 0
<TOTAL-COSTS> 828,879
<OTHER-EXPENSES> 552,839
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,333
<INCOME-PRETAX> 1,178
<INCOME-TAX> 800
<INCOME-CONTINUING> (282,591)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 306,192
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
