<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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 0-20180
INTERNATIONAL REALTY GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware 62-1277260
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
111 Northwest 183rd Street, Suite 518, Miami, Florida 33169
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(Address of principal executive office) (Zip Code)
</TABLE>
305-944-8811
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(Registrant's telephone number, including area code)
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 No X
--- ---
The number of shares outstanding of each of Issuer's classes of common equity as
of November 1, 1997.
Common Stock, par value $.001 9,954,313
----------------------------- ------------------
Title of Class Number of Shares
Transitional Small Business Disclosure Format yes no X
--- ---
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(UNAUDITED, NOTE 1)
ASSETS
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REAL ESTATE AT COST:
PROPERTY HELD FOR FUTURE DEVELOPMENT $ 10,556,100
RECEIVABLES:
DUE FROM CONTROLLING SHAREHOLDER 2,108,800
ACCOUNTS RECEIVABLE, DEEMED COLLECTIBLE 133,100
-----------
2,241,900
CASH AND EQUIVALENTS 91,700
FURNITURE, EQUIPMENT AND IMPROVEMENTS, NET 152,000
EXCESS OF COST OVER ESTIMATED FAIR VALUE OF 114,400
NET ASSETS ACQUIRED
OTHER ASSETS 117,900
------------
TOTAL $ 13,274,000
============
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
MORTGAGES AND NOTES PAYABLE (NOTE 2) $ 1,206,400
ACCOUNTS PAYABLE 243,000
ACCRUED AND OTHER LIABILITIES 836,600
$ 2,286,000
===========
MINORITY INTEREST 1,325,000
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.001 PAR; AUTHORIZED 10,000,000
SHARES; 9,954,250 COMMON SHARES ISSUED AT 6/30/97 10,000
CAPITAL IN EXCESS OF PAR 4,917,400
CONVERTIBLE NOTES (NOTE 3) 9,707,400
CUMULATIVE TRANSLATION ADJUSTMENT (214,200)
ACCUMULATED DEFICIT (4,742,100)
-----------
9,678,400
LESS SHARES OF COMMON STOCK HELD IN TREASURY,
AT COST 15,500
-----------
TOTAL SHAREHOLDERS' EQUITY 9,663,000
-----------
TOTAL $13,274,000
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE> 3
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED, NOTE 1)
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<CAPTION>
THREE MONTHS NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
REVENUES:
REVENUES FROM SERVICES PROVIDED $ 222,200 $ 204,000 $ 399,400 $ 366,200
---------- ----------- ----------- -----------
OPERATING EXPENSES:
AMORTIZATION AND DEPRECIATION 14,000 13,000 28,000 27,400
DIRECT 122,200 50,000 224,900 162,000
PAYROLL AND RELATED BENEFITS 50,000 79,400 98,000 147,000
SELLING, GENERAL & ADMINISTRATIVE 40,700 74,200 74,100 149,800
----------- ----------- ----------- -----------
226,900 216,600 425,000 486,300
----------- ----------- ----------- -----------
LOSS BEFORE OTHER INCOME (EXPENSE), MINORITY INTEREST &
PROVISION FOR INCOME TAXES (BENEFIT) (4,600) (12,600) (25,600) (120,100)
OTHER INCOME (EXPENSE)
INTEREST INCOME 500 30,800 500 57,200
INTEREST EXPENSE (18,600) (38,200) (51,400) (64,600)
GAIN (LOSSES) ON EXCHANGE RATE FLUCTUATIONS (1,400) (7,600) (9,600) (142,500)
OTHER INCOME (EXPENSES) 900 -- 2,200 --
----------- ----------- ------------ -----------
LOSS BEFORE MINORITY INTEREST &
PROVISION FOR INCOME TAXES (BENEFIT) (23,300) (27,500) (84,000) (270,000)
MINORITY INTEREST IN INCOME (LOSS) OF SUBSIDIARIES (5,000) 6,500 (16,800) (27,000)
----------- ----------- ------------ -----------
LOSS BEFORE PROVISION FOR INCOME TAXES (18,300) (34,000) (67,200) (243,000)
PROVISION FOR INCOME TAXES -- 16,200 -- 32,400
----------- ----------- ----------- -----------
NET LOSS $ (18,300) $ (50,300) $ (67,200) $ (275,400)
=========== =========== =========== ===========
LOSS PER COMMON SHARE $ (0.00) $ (0.01 $ (0.01) $ (0.03)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 9,954,187 9,954,187 9,954,187 9,954,187
=========== =========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE> 4
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED, NOTE 1)
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CASH FLOWS FROM OPERATING ACTIVITIES:
SOURCES OF CASH:
CLIENTS AND OTHER $ 589,000
INTEREST 400
---------
589,400
---------
USES OF CASH:
CASH PAID FOR:
DIRECT COSTS 418,400
OPERATING 35,000
PAYROLL AND RELATED BENEFITS 98,000
INTEREST 400
---------
551,800
---------
CASH PROVIDED BY OPERATING ACTIVITIES $ 37,600
CASH FLOWS USED IN INVESTING ACTIVITIES:
USES OF CASH:
ACQUISITION OF EQUIPMENT (1,100)
CASH FLOWS FROM FINANCING ACTIVITIES:
SOURCE OF CASH:
DUE FROM CONTROLLING SHAREHOLDER 100,000
USES OF CASH
PAYMENT OF NOTES PAYABLE 58,700
---------
CASH PROVIDED BY FINANCING ACTIVITIES 41,300
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS 6,300
----------
INCREASE IN CASH AND CASH EQUIVALENTS 84,100
CASH AND CASH EQUIVALENTS, BEGINNING 7,600
----------
CASH AND CASH EQUIVALENTS, ENDING $ 91,700
==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE> 5
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED, NOTE 1)
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RECONCILIATION OF NET LOSS TO CASH
PROVIDED BY OPERATING ACTIVITIES:
NET LOSS $ (67,200)
ADJUSTMENTS TO RECONCILE NET LOSS TO
CASH PROVIDED BY OPERATING ACTIVITIES:
AMORTIZATION AND DEPRECIATION $ 28,000
MINORITY INTEREST (16,800)
CURRENCY FLUCTUATION 9,600
CHANGES IN ASSETS & LIABILITIES:
ACCOUNTS RECEIVABLE 187,400
OTHER ASSETS (91,800)
ACCOUNTS PAYABLE: (101,700
ACCRUED LIABILITIES 90,100
----------
TOTAL ADJUSTMENTS 104,800
-----------
CASH PROVIDED BY OPERATING ACTIVITIES $ 37,600
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE> 6
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
INTERNATIONAL REALTY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1997
(1) PRINCIPLES OF STATEMENT PRESENTATION
The unaudited consolidated financial statements include all adjustments which
are necessary, in the opinion of management, to fairly reflect the Company's
financial position and results of operations. All such adjustments are of a
normal recurring nature. The statements have been prepared using the accounting
policies described in the Company's 1996 Audited Financial Statements contained
in the Company's Form 10-KSB for the year ended December 31, 1996.
The Company has changed its balance sheet presentation to a non-classified
balance sheet due to the change from principally the service industry to
principally real estate holdings and made other reclassifications. (See Item 2.
Management's Discussion and Analysis or Plan of Operations). Such change in
presentation had no effect on operations. Balances for the three months and six
ended June 30, 1997 have been reclassified where appropriate to conform to the
comparable 1996 period's financial statement presentation.
(2) MORTGAGE AND NOTES PAYABLE
Mortgages and Notes Payable at June 30, 1997 is summarized as follows:
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Mortgage Note, bank $ 461,200
Note Payable, bank 628,900
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Total Payable to banks $1,090,100
Note Payable, unsecured 48,300
Note Payable, related party 15,500
Shareholder Loan 52,500
----------
$1,206,400
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(3) CONVERTIBLE NOTE
Convertible Notes issued at August 19, 1996 are summarized as follows:
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$4,858,828 convertible into 52,875,030 shares
$4,848,558 convertible into 52,763,270 shares
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$9,707,386 convertible into 105,638,300 shares
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Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion and analysis covers any material changes in
financial condition since December 31, 1996 and any material changes in the
results of operations for the three and six months ended June 30, 1997, as
compared to the same period in 1996. This discussion and analysis should be read
in conjunction with "Management's Discussion and Analysis or Plan of Operations"
included in the Company's Form 10-KSB for the year ended December 31, 1996
<PAGE> 7
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS, CONTINUED
GENERAL
The Company consummated a share exchange transaction on August 19, 1996
resulting in a reverse acquisition which has been accounted for in a manner
similar to a pooling of interests. Accordingly, the consolidated financial
statements for the three and six month period ending June 30, 1997 and the
corresponding 1996 period have been retroactively restated to include the
accounts of the companies transferred in such pooling of interest.
ORGANIZATION AND BUSINESS
INTERNATIONAL REALTY GROUP, INC., together with its consolidated subsidiaries
(the "Company"), is a provider of commercial real estate and business valuations
and appraisals in the United States and Hungary and land development primarily
in Mexico. The Company will be developing its Mexican properties into various
resort and commercial developments. Once developed they will engage in the
marketing and operation of its properties and other ancillary real estate
activities. The Company is in the preliminary stages of seeking financing to
commence development projects. No development of the properties located in
Mexico will occur until after the conversion of the notes issued to DSC and
Hemisphere, which notes are collateralized by the properties located in Mexico.
The Company was incorporated in Delaware on April 13, 1970 and operated under
the name Bosco Resources Corporation until June 10, 1973, when it ceased
operations after its assets were nationalized without compensation by the Libyan
Government. The Company remained inactive until December 15, 1986 when it
acquired all of the outstanding shares of APPRAISAL GROUP, INC. in exchange for
4,150,000 shares of common stock (after a 1 for 8 reverse split) and changed its
name to APPRAISAL GROUP INTERNATIONAL INC. Subsequently, on August 10, 1989, the
Company's name was changed to INTERNATIONAL REALTY GROUP, INC.
RESULTS OF OPERATIONS:
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1996
Revenues increased for the three months ended June 30, 1997 totaling $222,200 as
compared to $204,000 for the same period in 1996. The Company's domestic and
foreign valuation subsidiaries Appraisal Group International, Inc. (AGII) based
in Miami, Florida and Appraisal Group International Rt.(AGI RT.) based in
Budapest, Hungary accounted for the Company's revenues. AGII had sales of
$186,300 for the period, compared to $109,900 for the same period in 1996. AGI
RT. had sales of $37,300, compared to $29,100 for the same period in 1996.
Operating expenses for the three months ended June 30, 1997 were $226,900
compared to $216,600 for the comparable period in 1996, an increase of 5%. Of
the total expenses, foreign operations accounted for 11% and domestic operations
accounted for 89%.
Selling, General and Administrative expenses for the period decreased from
$74,300 in 1996 to $40,700 for the current period. Payroll and Related Benefits
for the period decreased from $79,400 in 1996 to $50,000 for the current period.
Direct expenses including the production of appraisal reports, fees and related
expenses for the period increased from $49,900 in 1996 to $122,200 for the
current period. The increase in direct expenses corresponds to the decrease in
payroll expenses, which is the result of the reduction in overhead salaries and
an increase in
<PAGE> 8
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS, CONTINUED
the number of independent contractors during the comparable periods.
Amortization and Depreciation expense was consistent between the periods.
Interest expense for the three months ended June 30, 1997 was $18,600 compared
to $38,200 for the same period in 1996. The majority of intest expense is
attributable to debt for properties located in Mexico. Interest income decreased
from $30,800 in 1996 to $500 in the current 1997 period. Currency translation
expenses were $1,400 for the current 1997 period compared to $7,600 for the
comparable period in 1996. Such translation expense is attributable to the
currency fluctuations of the Mexican peso during each such period.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Revenues increased for the six months ended June 30, 1997 totaling $399,400 as
compared to $366,200 for the same period in 1996. AGII had sales of $344,500 for
the period, compared to $177,600 for the same period in 1996, a $166,900 or 49%
increase. AGII has instituted certain marketing programs to reverse its
declining sales over the last few years, with the results beginning to show some
effect. AGI RT. had sales of $57,500, compared to $115,600 for the same period
in 1996. The continued decline is attributed to the decrease in appraisal
assignments with the Hungarian government which is at the end of the
privatization process. The Company is focusing its marketing efforts towards
expanding its presence in the field of corporate liquidations on behalf of the
Hungarian court.
Operating expenses for the six months ended June 30, 1997 were $425,000 compared
to $486,300 for the comparable period in 1996, a decrease of $61,300 or 14%. Of
the total expenses, foreign operations accounted for 10% and domestic operations
accounted for 90%.
Selling, General and Administrative expenses for the period decreased from
$149,800 in 1996 to $74,100 for the current period. Payroll and Related Benefits
for the period decreased from $147,000 in 1996 to $98,000 for the current
period. Direct expenses including the production of appraisal reports, fees and
related expenses for the period increased from $162,000 in 1996 to $224,900 for
the current period. As discussed in the three-month review, payroll and related
expenses have decreased, while direct expenses have increased. Amortization and
Depreciation expense was consistent between the periods.
Interest expense for the six months ended June 30, 1997 were $51,400 compared to
$64,600 for the same period in 1996. The majority of intest expense is
attributable to debt for properties located in Mexico. Interest expense is
recognized during each period and accrued per agreement with the Lender.
Currency translation expenses were $9,600 for the current 1997 period compared
to $142,500 for the comparable period in 1996. Such translation expense is
attributable to the currency fluctuations of the Mexican peso during each such
period.
LIQUIDITY AND CAPITAL RESOURCES:
Cash Flow From Operations. The Company incurred for the six months ended June
30, 1997, a net loss of $67,200 compared to a net loss of $275,400 for the
comparable period in 1996. Cash flow provided by operations were $37,600.
Working Capital. The Company's current assets, consisting of cash and
receivables of approximately $2,241,900, exceed its current liabilities,
consisting of accounts payable and
<PAGE> 9
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS, CONTINUED
accrued liabilities of approximately $1,073,600, by approximately $1,165,300.
Included in current liabilities are accrued officer's salaries amounting to
approximately $507,100.
Long Term Liabilities: Mortgage and Notes Payable for the six months ended June
30, 1997 were $1,206,400. Of this amount, mortgages to Mexican banks for
property currently held for future developed totaled $1,090,100. Of the
remaining $116,300, $107,000 is attributable to domestic operations (shareholder
loans $52,500 and notes payable $48,200) and $15,600 to foreign operations.
Land Development: Pursuant to the Company's reverse merger transaction with DSC,
S.A. de C.V. ("DSC") and Hemisphere Developments Limited ("Hemisphere"), the
Company acquired interests in five properties located in Mexico. The Company
believes that each of the Mexican properties is suitable for future development
as either a resort, residential or commercial property. Since the properties
secure the Company's obligations under the convertible notes issued to DSC and
Hemisphere in the aggregate amount of $9,707,386 ("Notes"). The Company does not
plan to undertake any development of such properties until after the Notes have
been converted. While no assurances can be given, the Company expects that the
conversion of the Notes (convertible into an aggregate of 105,638,300 shares of
the Company's Common Stock) will occur in the first quarter of 1998. The Company
has no interest obligations under the Notes. Any development of the properties
thereafter is contingent upon the Company obtaining necessary financing.
Potential sources of financing include mortgage financing from financial
institutions located in the United States or Mexico, or the issuance of equity
securities of the Company. The Company has no present understanding, agreement
or commitment for financing any such property and there can be no assurance that
financing will be available to the Company on commercially reasonable terms or
at all.
Currency Risk. The Company's operating entities are not subject to direct
currency conversion risks. The Company's primary operating entities provide
consulting services to their clients in their own geographic locations. All
domestic consulting services performed by AGII based in Miami, Florida are
reported and paid in U.S. dollars. All foreign consulting services, assets and
liabilities of AGI RT. based in Hungary, are translated into U.S. dollars at
period-end exchange rates with the resulting translation adjustment recorded in
accumulated translation adjustment in shareholder's equity.
The functional currency of the Mexican companies is the U.S. dollar. Therefore,
all peso denominated transactions represent foreign currency transactions.
Foreign currency transaction gains and losses are included in determining net
income. All foreign currency transaction gains or losses in 1997 or 1996 were
attributable to the Mexican operations.
The Hungarian exchange rate used for the six months ended June 30, 1997 and 1996
were HUF 186.78 and HUF153.05, respectively. The Mexican exchange rate used for
the six months ended June 30, 1997 and 1996 were MNP 7.9504 and MNP 7.5814
respectively.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those
<PAGE> 10
PART I: FINANCIAL INFORMATION, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS, CONTINUED
projected in forward-looking statements (as such term is defined in the Reform
Act) made by or on behalf of the Company herein or orally, whether in
presentations, in response to questions or otherwise. Any statements that
express, or involve discussions as to expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, through the
use of words or phrases such as "will result", "are expected to", "will
continue", "is anticipated", "estimated", "projection" and "outlook") are not
historical facts and may be forward-looking and, accordingly, such statements
involve estimates, assumptions, and uncertainties which could cause actual
results to differ materially from those expressed in the forward-looking
statements. Such uncertainties include, among other, the following: (i) the
Company's ability to obtain additional financing to implement its business
strategy; (ii) real estate investment risks, including the potential for
increases in real property taxes; (iii) real estate development risks, including
obtaining building permits or necessary zoning changes, construction delays
strikes, adverse weather conditions and other conditions beyond the control of
the Company; (iv) illiquidity of real estate investments; (v) the financial
condition of the Company's clients; (vi) imposition of new regulatory
requirements affecting the Company; (vii) a downturn in general or local
economic conditions where the Company owns real property; (viii) the delay or
failure to properly manage growth and successfully integrate acquired companies
and operations; (ix) lack of geographic diversification; (x) effect of uninsured
loss and (ix) other factors which are described in further detail in the
Company's filings with the Securities and Exchange Commission.
The Company cautions that actual results or outcomes could differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company. Any forward-looking statement speaks only as of the date on which
such statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27.1 Financial Data Schedule (For SEC purposes only)
B. Reports on Form 8-K
None
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
INTERNATIONAL REALTY GROUP, INC.
--------------------------------
(REGISTRANT)
DATE: DECEMBER 10, 1997 /s/ RICHARD M. BRADBURY
--------------------------------
RICHARD M. BRADBURY,
PRESIDENT, AND
CHIEF FINANCIAL OFFICER
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERNATIONAL REALTY FOR THE PERIOD ENDED JUNE 30, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 91,700
<SECURITIES> 0
<RECEIVABLES> 133,100
<ALLOWANCES> 0
<INVENTORY> 10,556,100<F1>
<CURRENT-ASSETS> 0
<PP&E> 386,700
<DEPRECIATION> 234,700
<TOTAL-ASSETS> 13,274,400
<CURRENT-LIABILITIES> 1,079,600
<BONDS> 1,206,400
0
0
<COMMON> 10,000
<OTHER-SE> 9,653,000
<TOTAL-LIABILITY-AND-EQUITY> 13,274,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 402,100
<TOTAL-COSTS> 425,00
<OTHER-EXPENSES> 9,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,400
<INCOME-PRETAX> (67,200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (67,200)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (67,200)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
<FN>
<F1>INVENTORY CONSISTS OF REAL ESTATE, AT COST HELD FOR FUTURE DEVELOPMENT.
</FN>
</TABLE>
