===============================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-14189
CELTIC INVESTMENT, INC.
(Name of Small Business Issuer as specified in its charter)
Illinois 36-3729989
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification
No.)
17W220 22nd St., Suite 420
Oakbrook Terrace, Il 60181
-------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (630) 993-9010
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: $.001 Par
Value Common Stock
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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.
Common Stock outstanding at March 13, 1998 - 3,906,471 shares of $.001 par
value Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
===============================================================================
1
<PAGE>
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
CELTIC INVESTMENT, INC.
For the Quarter Ended March 31, 1998
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
<TABLE>
<CAPTION>
Part I - Financial Information
<S> <C> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet--March 31, 1998 and
June 30, 1997 3
Condensed Consolidated Statements of Operations--for the three
months ended March 31, 1998 and 1997 4
Condensed Consolidated Statements of Operations--for the nine
months ended March 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows--for the six
months ended March 31, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations--General 8
</TABLE>
<TABLE>
<CAPTION>
Part II - Other Information
<S> <C> <C>
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6(a). Exhibits 15
Item 6(b). Reports of Form 8-K 13
</TABLE>
2
<PAGE>
CELTIC INVESTMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, 1998 June 30, 1997
----------------------------------------------
<S> <C> <C>
Cash $ 862,617 $ 941,789
Receivables 9,649,292 5,890,308
Furniture, fixtures and equipment, net of accumu 126,017 145,218
depreciation
Goodwill 641,870 676,670
Deferred finance fees, net of accumulated amortion 53,716 111,674
Investment in Land ` 603,453
Prepaid Expenses and other assets 415,683 158,825
----------------------------------------------
Total assets $ 12,352,648 $ 7,924,484
==============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses 362,567 329,186
Due to factoring clients 3,065,036 1,404,072
Note Payable - line of credit (Capital Factors) 5,180,385 2,448,060
Long Term Debt 0 40,257
----------------------------------------------
Total liabilities 8,607,988 4,221,575
Commitments - -
Stockholders' equity:
Preferred stock - -
Common stock 3,907 3,907
Additional paid-in capital 5,076,054 5,076,054
Accumulated deficit (1,272,264) (1,313,160)
----------------------------------------------
Total stockholders' equity 3,807,697 3,766,801
Less notes receivable and interest receivable from
stockholders (63,037) (63,892)
----------------------------------------------
3,744,660 3,702,909
----------------------------------------------
Total liability and stockholders' eq $ 12,352,648 $ 7,924,484
==============================================
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE>
CELTIC INVESTMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
----------------------------------------
<S> <C> <C>
Revenues:
Factoring income $ 617,962 $ 260,232
Mortgage Origination Income 432,153 139,623
Realty Commission 18,290 30,059
Interest 7,605 51,892
Other 12,876 8,885
----------------------------------------
Total revenues 1,088,886 490,691
Interest expense 145,827 70,869
----------------------------------------
Income after interest expense 943,059 419,822
Operating Expenses:
Salaries and employee benefits 299,867 207,314
Occupancy 151,405 47,164
Servicing costs 5,365 21,820
Professional fees 177,109 49,854
Goodwill amortization 11,600 15,562
Other 201,343 120,212
----------------------------------------
Total operating expenses 846,689 461,926
Net Income (Loss) $ 96,370 $ (42,104)
========================================
Basic earnings per share $ 0.02 $ ( 0.01)
========================================
Diluted earnings per share $ 0.02 $ ( 0.01)
========================================
Weighted average shares outstanding 3,906,471 4,183,781
========================================
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE>
CELTIC INVESTMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
March 31, 1998 March 31, 1997
----------------------------------------------
<S> <C> <C>
Revenues:
Factoring Income $1,600,728 $ 894,552
Mortgage Origination Income 1,084,268 139,623
Realty Commission 178,120 30,059
Interest 51,203 63,248
Other 39,872 85,502
----------------------------------------------
Total revenues 2,954,191 1,212,984
Interest expense 441,768 135,789
----------------------------------------------
Income after interest expense 2,512,423 1,077,195
Operating Expenses:
Salaries and employee benefits 858,285 474,065
Occupancy 435,528 97,157
Servicing costs 37,373 63,537
Professional fees 474,272 172,848
Goodwill amortization 34,800 15,562
Other 631,269 252,385
-----------------------------------------
Total operating expenses 2,471,527 1,075,554
Net Income (loss) $ 40,896 $ 1,641
Basic earnings per share $ 0.01 $ 0.00
=========================================
Diluted earnings (loss) per share $ 0.01 $ 0.00
=========================================
Weighted average shares outstanding 3,906,471 3,703,193
=========================================
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE>
CELTIC INVESTMENT, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
March 31, 1998 March 31, 1997
-------------------------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 40,896 $ 1,641
Adjustments to reconcile net income to net cash
(used in)operating activities:
Depreciation 40,439 18,907
Amortization of Goodwill 34,800 161,883
Amortization of deferred finance fees 57,958 37,958
Changes in operating assets and liabilities:
(Increase )in receivables (3,758,129) (1,113,448)
Increase (Decease)in accounts payable and a 33,381 13,196
Increase (decrease) in payables due to 1,660,964 (124,431)
(Increase) in other assets (860,311) (210,920)
-------------------------------------------------
Net cash (used in)
operating activities (2,750,002) (1,195,214)
-------------------------------------------------
Cash flows from investing activities -
Purchase of furniture, fixtures and equipment (21,238) (97,381)
-------------------------------------------------
Net cash (used in) by investing activities (21,238) (97,381)
-------------------------------------------------
Cash flows from financing activities:
Payment of Long term Debt (40,257) -
Net advances from note payable 2,732,325 1,155,176
------------------------------------------------
Net cash provided by financing
activities 2,692,068 1,155,176
------------------------------------------------
Increase in cash during the period (79,172) (137,419)
Cash at beginning of period 941,789 450,864
------------------------------------------------
Cash at end of period $ 862,617 $ 313,445
================================================
</TABLE>
See accompanying notes to condensed consolidated financial statements
6
<PAGE>
CELTIC INVESTMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------
1. General
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments consisting of only normal recurring
adjustments necessary to present fairly its financial position as of March 31,
1998 and the results of its operations for the nine months ended March 31, 1998
and 1997 and cash flows for the nine months ended March 31, 1998 and 1997. The
statements are condensed and therefore do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The statements should be read in conjunction with the
consolidated financial statements and the footnotes included in the Company's
Annual Report on Form 10-KSB for the year ended June 30, 1997. The results of
operations for the nine months ended March 31, 1998 and 1997 are not necessarily
indicative of the results to be expected for the full year.
2. Summary of Significant Accounting Policies
Per Share Data
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earning per share. Statement 128
replaces the previously reported primary and fully diluted net income with basic
and diluted net income per share. Unlike primary earnings per share basic
earnings per share exclude any diluted effects of stock options, warrants, and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. All earning per share
amounts for all periods have been presented, and where necessary, are restated
to conform to the Statement 128 requirements.
Segment Reporting
Effective January 1, 1998 the Company adopted the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No.
131, Disclosures about Segment of an Enterprise and Related Information
(Statement 131). Statement 131 establishes standards for the way that a public
business enterprises report information about operating segments in annual
financial statements and requires that those enterprises report selected
information about the operating segments in interim financial reports. Statement
131 also establishes standards for related disclosure about products and
services, geographic areas, and major customers. The adoption of Statement 131
did not affect results of operations or financial position but did affect the
disclosure of segment information.
Reclassifications
Certain amounts have been reclassified in the 1997 financial statements to
conform to the 1998 presentation.
3. Commitments and Contingencies
The Company has not entered into any new agreements that contain any long
term commitments or contingencies.
7
<PAGE>
PART 1 - ITEM 2
MANAGEMENT' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The Company is a diversified financial services company engaged, through
its wholly owned subsidiaries, in the business of purchasing accounts
receivables, residential mortgage origination, and residential real estate
sales. The Company's subsidiary, U.S. Commercial Funding Corporation (USCF),
commenced operations in July, 1994. The Company's subsidiary Salt Lake Mortgage
Corporation (SLM), a residential mortgage loan originator, and the Company's
subsidiary Advantage Realty Inc. (ADR), a real estate brokerage operation were
acquired by the Company on January 31, 1997 in a merger transaction.
Results of Operations
The following discussion and analysis in the table below presents the
significant changes in financial conditions and results of continuing operations
of the Company and is categorized by the Company's Subsidiaries for the three
and nine months ended March 31, 1998 and 1997. The discussion below of SLM and
ADR results of operations do not compare to the same period for the three or
nine months ending March 31, 1997. SLM and ADR were acquired by the Company on
January 31, 1997. Because the acquisition occurred on January 31, 1997 the table
reflects only the results of operations for the months of February and March
1997. Effective February 23, 1998, the Company has discontinued its ADR
subsidiary operations and is no longer in the real estate brokerage business.
CELTIC INVESTMENT INC.
CONDENSED SUBSIDIARY STATEMENT OF OPERATIONS
(Unaudited)
$000's
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, 1998 March 31, 1998
1998 1997 1998 1997
------ ------ ------ ------
Revenues
<S> <C> <C> <C> <C>
USCF 638 320 1685 1042
SLM 433 140 1087 140
ADR 18 30 182 30
------ ----- ------ -------
Total Revenue 1089 490 2954 1212
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Operating Expense
<S> <C> <C> <C> <C>
Interest 146 71 442 136
USCF 374 260 1024 792
SLM 380 158 1000 158
ADR 41 47 301 47
Corporate (Celtic) 52 -4 146 77
------ ------ ------ -------
Total Operating Expenses 993 532 2913 1210
</TABLE>
<TABLE>
<CAPTION>
Operating Profit (Loss)
<S> <C> <C> <C> <C>
USCF 118 (11) 254 114
SLM 53 (18) 52 (18)
ADR (23) (17) (119) (17)
Corporate (Celtic) (52) 4 (146) (77)
------ ------ ------ ------
Operating Profit (Loss) 96 (42) 41 2
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Income Tax 0 0 0 0
Net Income (Loss) 96 (42) 41 2
USCF Assets 10,664
SLM Assets 1,680
ADR Assets 9
</TABLE>
Revenues
USCF revenues totaled $638,000 for the three month period ending March 31,
1998, compared to $320,000 for the same period in 1997. USCF revenues totaled
$l,685,000 for the nine month period ending March 31, 1998, compared to
$1,042,000 for the same period in 1997. This sixty-two percent increase in
revenues results from a increase in the total volume of purchased receivables.
SLM revenues totaled $433,000 for the three month period ending March 31,
1998. SLM revenues totaled $1,087,000 for the nine month period ending March 31,
1998. The market is experiencing an increase in origination volume due to
customers refinancing existing mortgages due to lower mortgage interest rates.
ADR revenues totaled $18,000 for the three month period ending March 31,
1998. ADR revenues totaled $182,000 for the nine month period ending March 31
1998. As previously stated, ADR effective February 23, 1998 discontinued its
operations.
Operating Expense
Interest expense totaled $146,000 for the three month period ending March
31, 1998, compared to $71,000 for the same period in 1997. Interest expense for
the nine month period ending March
9
<PAGE>
31, 1998 totaled $442,000 compared to $136,000 the same period in 1997.
This increase in interest expense relates to USCF's increased use of the line of
credit which is necessary to finance the growth in volume of purchased
receivables.
USCF operating expense, not including interest expense, for the three month
period ending March 31, 1998 total $374,000, compared to $260,000 for the same
period in 1997. Operating expense totaled $1,024,000 for the nine months ending
March 31, 1998, compared to $792,000 for the same period in 1997. This expense
for 1998 includes: Salaries and employee benefits - $356,000, Occupancy -
$59,000, Commissions paid to referral sources - $132,000, Legal fees - $87,000,
and provision for credit losses - $70,000. The increase in expenses in the
comparative three and nine month periods ending March 31, 1998 are a result of
the increased growth of USCF purchased accounts receivables.
SLM's operating expense for the three months ending March 31, 1998
totaled $380,000. The operating expense for the nine month period ending March
31, 1998 totaled $1,000,000. This total includes: Salaries and employee benefits
- - $256,000, Occupancy - $72,000, Indirect loan expense - $295,000, and direct
loan expenses including origination commission - $244,000.
ADR's operating expense for the three month period ending March 31,1998
totaled $41,000. The operating expense for the nine month period ending March 31
1998 totaled $301,000. This expense total includes: Salaries and employee
benefits - $94,000, Occupancy - $36,000, and Commissions to independent agents -
$114,000.
The Company's parent corporate overhead expense totaled $52,000 for the
three month period ending March 31, 1998, compared to a $4,000 income for the
same period in 1997. The corporate overhead expense for the nine month period
ending March 31, 1998 totaled $146,000, compared to $77,000 for the same period
in 1997. The increase in expense for the three month period ending March 31,
1998 compared to March 31, 1997 is primarily a result of the SLM/ADR merger
on January 31, 1997. As a result of the merger the over head expense the Company
incurred in the prior periods were reversed and included as part of the
Goodwill..
Consolidated operating expense, not including interest, for the three
months ended March 31, 1998 was 78% of consolidated revenues compared to 94% for
the three months ended March 31, 1997. Consolidated operating expense, not
including interest, for the nine months ended March 31, 1998 was 84% of
consolidated revenues compared to 89 % for the nine months ended March 31, 1997.
Operating Profit (Loss)
USCF had a Operating profit of $118,000 for the three month period ending
March 31, 1998, compared to $11,000 operating loss for the same period in 1997.
The operating profit for the nine month period ending March 31,1998 is $254,000,
compared to $114,000 for the same period in 1997. This profit increase a direct
result of the increase in the volume of purchased receivables.
10
<PAGE>
SLM had a operating profit of $53,000 for the three month period ending
March 31, 1998, and a $52,000 profit for the nine month period ending March 31
1998.
ADR had a operating loss of ($23,000) for the three month period ending
March 31 , 1998, and a operating loss of ($119,000) for the nine month period
ending March 31,1998. As a result of these operating losses the Company has
discontinued ADR operations.
The consolidated net income for the three month period ending March 31,
1998 totaled $96,000, compared to a ($42,000) operating loss for the same period
in 1997. The consolidated net operating profit for the nine month period ending
March 31, 1998 total $41,000 compared to the net income of $2,000 for the same
period in 1997. The profitability increase results from USCF and SLM total
overall performance relating to revenue growth and corresponding operating
profit.
Liquidity and Capital Resources
The Company's capital requirement will most likely increase as each
of its subsidiaries grows and requires additional capital. The requirement for
additional capital would provide additional resources to increase volume of
purchased receivables, allow expansion of the mortgage operation, and provide
financing for any potential acquisition/merger activity. There can be no
assurance that additional capital will be available as needed.
In December, of 1997, USCF successfully re-negotiated its line credit
with Capital Business Credit. The most significant changes are: the maximum
credit line amount increased from $6,000,000 to $15,000,000, and the cost of
interest was lowered by two hundred basis points. USCF believes these changes
will be adequate to grow USCF's business and improve gross profit margins in the
foreseeable future.
The Company's business plan includes a strategy of growth through
acquisitions in addition to internally generated growth. The Company has
recently entered into a non-binding Letter of Intent to acquire another
factoring company. The acquisition is subject to numerous conditions including
the Company raising an additional $18,500,000 in capital to fund the purchase
price. Accordingly, the Company's short term capital requirements include
raising, through debt or equity sources, approximately $18,500,000 if it is to
complete such acquisition. There can be no assurance that such acquisition will
be completed.
At March 31, 1998 the Company had total assets of $12,352,648 and total
liabilities of $8,607,988. This compares to the total assets of $7,924,484 and
total liabilities of $4,221,575 at June 30, 1997. 'The increase in net assets
and liabilities is the direct result of the increased level of factoring
business activity, and the increased activities of SLM and ADR. Cash at March
31, 1998 totaled $862,617 compared to $941,789 at June 30, 1997. The Company
used this cash to fund additional receivable purchases, and to fund its ongoing
operations. The Company intends to continue to purchase receivables through
existing cash and through the use of the line of credit as well as expand its
mortgage origination operation by entering into selective funding projects.
11
<PAGE>
The Company anticipates that its monthly general and administrative costs,
exclusive of depreciation and marketing expenses, commissions and professional
fees, will be approximately $95,000 for each month of the next six months based
on current operations. However, if purchased receivable volume and loan
origination volume increase, the Company may be required to increase its staff
which will increase its monthly general and administrative expenses. The Company
anticipates that existing working capital and the line of credit is adequate to
fund its projected factoring volume during the next year.
Inflation
In the opinion of management, inflation has not had a material effect on
the operations of the Company. Given current inflationary trends, the Company
does not believe inflation will have any future adverse effect.
Forward-looking Statements
The foregoing discussion in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933 and
Section 2lE of the Securities Act, which reflect Management's current views with
respect to the future events and financial performance. Such forward looking
statements may be deemed to include, among other things, statements relating to
anticipated growth, and increased profitability, as well as to statements
relating to the Company's strategic plan, including plans to develop and
increase factored receivables, loan originations, and to selectively acquire
other companies. These forward-looking, statements are subject to certain risks
and uncertainties, including, but not limited to, future financial performance
and future events, competitive pricing for services, costs of obtaining capital
as well as national, regional and local economic conditions. Actual results
could differ materially from those addressed in the forward looking statements.
Due to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward looking, statements, which speak only of the date
hereof.
PART II - OTHER INFORMATION
Item 1 Legal Proceeding. The Company and its subsidiaries are, from
time-to-time, involved in routine business litigation. During the
quarter
USCF obtained a default judgment on March 20, 1998 against S.J.T.
Enterprises in the amount of $19,919.
USCF obtained a default judgement on March 20, 1998 against J. M. Canty
in the amount of $3,697.
USCF obtained a default judgement on March 20, 1998 against Spymaster Inc.
In the amount of $3,912.
Item 2 Changes is Securities. None.
12
<PAGE>
Item 3 Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. On January 13,
1998, the Company held its Annual Meeting of Shareholders. The matters
voted upon, and the result of the voting, were as follows:
A. Election of Directors
Name For Against Abstain
Douglas P. Morris 3,132,296 -0- 100,120
Howard D. Talks 2,924,039 -0- 308,377
Larry Meek 3,131,496 -0- 100,920
Reese Howell, Jr. 3,132,296 -0- 100,120
Pamela Davis 3,132,296 -0- 100,120
B. Reincorporation in Delaware 2,682,538 208,257 341,621
C. 1997 Stock Option Plan 2,635,802 242,618 353,996
D. Stock Option Grants 2,844,184 34,236 353,996
Item 5. Other Information. None.
Item 6.(a) Exhibits. 1-Computation of Net Income Per Share
Item 6.(b) Reports on Form 8-K. None.
13
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CELTIC INVESTMENT, INC.
Date: May 13, 1998 /s/ Douglas P. Morris
--------------------------
By: Douglas P. Morris
President and Principal Executive Officer
Date: May 13, 1998 /s/ Frank Lucchese
By: Frank Lucch
Principal Financial Officer
14
Celtic Investment Inc.
Computation of Net Income Per Share
<TABLE>
<CAPTION>
Three Months Ended
March 31
(thousands, except per share amounts) 1998 1997
----------------------------
<S> <C> <C>
Average Common Shares Outstanding 3,906,741 4,183,781
Dilutive Common Stock Options 36,637 -
Denominator for diluted earning per share 3,943,378 4,183,781
Numerator: Net Income attributable to Common
Shares 96 (42)
=============================
Net Income per share
Basic 0.02 (0.01)
Diluted 0.02 (0.01)
Nine Months Ended
March 31
1998 1997
-----------------------------
Average Common Shares Outstanding 3,906,741 3,703,193
Dilutive Common Stock Options 166,134 -
Denominator for diluted earning per share 4,072,875 3,703,193
Numerator: Net Income attributable to Common
Shares 40 2
=============================
Net Income per share
Basic 0.01 0.00
Diluted 0.01 0.00
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CELTIC INVESTMENT, INC.'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> 863
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 863
<SECURITIES> 0
<RECEIVABLES> 9,818
<ALLOWANCES> (169)
<INVENTORY> 0
<CURRENT-ASSETS> 10,512
<PP&E> 222
<DEPRECIATION> (108)
<TOTAL-ASSETS> 12,353
<CURRENT-LIABILITIES> 8,608
<BONDS> 0
0
0
<COMMON> 5,080
<OTHER-SE> (1,335)
<TOTAL-LIABILITY-AND-EQUITY> 12,353
<SALES> 2,954
<TOTAL-REVENUES> 2,954
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,401
<LOSS-PROVISION> 70
<INTEREST-EXPENSE> 442
<INCOME-PRETAX> 41
<INCOME-TAX> 0
<INCOME-CONTINUING> 41
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
