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 quarterly period ended March 31, 1998
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 0-20848
UNIVERSAL HEIGHTS, INC.
(Name of small business issuer in its charter)
DELAWARE 65-0231984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2875 N.E. 191 Street
Suite 400 A
Miami, Florida 33180
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (305) 653-4274
Indicate by check mark whether the Company (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 Company
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Number of shares of the Common Stock of Universal Heights, Inc. issued
and outstanding as of February 1, 1998: 14,679,584.
Transitional Small Business Disclosure Format Yes / / No /X/
<PAGE>
UNIVERSAL HEIGHTS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited, condensed consolidated financial statements of
the Company have been prepared in accordance with the instructions to Form
10-QSB and, therefore, omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results for the year ending December 31, 1998.
2
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited)
ASSETS
Equity securities available for sale at cost which
approximates fair value $ 354,005
Cash and cash equivalents 6,551,008
Prepaid reinsurance premiums 442,800
Other receivables 12,655
Property and equipment, net 6,661
Deposits 10,316
Organization costs 151,461
Cash restricted for regulatory capitalization requirements 5,300,000
------------
Total Assets $ 12,828,906
============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 262,741
Unearned premiums 2,715,224
Accounts payable 856,064
Other accrued expenses 734,109
Due to related parties 369,563
Provision for insurance 2,503,261
------------
Total Liabilities 7,440,962
------------
STOCKHOLDERS' EQUITY:
Cumulative preferred stock, $.01 par value, 1,000,000
shares authorized, 138,640 shares issued and
outstanding 1,387
Common stock, $.01 par value, 20,000,000 shares
authorized, 14,677,600 shares issued 146,776
Additional paid-in capital 14,793,571
Accumulated deficit (9,553,790)
------------
Total Stockholders' Equity 5,387,944
------------
Total Liabilities and Stockholders' Equity $ 12,828,906
============
3
<PAGE>
<TABLE>
<CAPTION>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31, April 30,
--------------- --------------
1998 1997
--------------- --------------
<S> <C> <C>
PREMIUMS EARNED AND OTHER REVENUES
Assumed written $ 1,571,076 $ --
Reinsurance ceded (769,486) --
------------ ------------
Net Written 801,590 --
Net investment income 92,117 --
Other income (expense) 3,065 (6,633)
------------ ------------
Total Revenues 896,772 (6,633)
------------ ------------
OPERATING COSTS AND EXPENSES:
Losses and loss adjustment expenses 310,932 --
General and administrative expenses 213,009 100,226
------------
Total Operating Expenses 523,941 100,226
------------ ------------
INCOME FROM CONTINUING OPERATIONS 372,831 (106,859)
DISCONTINUED OPERATIONS:
Loss from operations of the sports novelty and
souvenir business -- (188,551)
Loss on disposal of sports novelty and
souvenir business -- (1,387,575)
------------ ------------
Loss from Discontinued Operations -- (1,576,126)
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 372,831 (1,682,985)
Federal income tax provision -- --
------------ ------------
NET INCOME (LOSS) $ 372,831 $ (1,682,985)
============ ============
INCOME (LOSS) PER COMMON SHARE:
Basic and diluted:
Income (loss) from continuing operations $ 0.03 $ (0.06)
Income (loss) from discontinued operations -- (0.89)
------------ ------------
Net income (loss) $ 0.03 $ (0.95)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 14,615,834 1,767,373
============ ============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
MARCH 31, 1998
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net income $ 372,831
Add (deduct):
Adjustments to reconcile net income to cash provided by operations:
Amortization and depreciation 28,397
Net change in non-cash balances relating to operations:
Other receivables and deposits 8,323
Organization costs (40,520)
Prepaid reinsurance premiums (442,800)
Accounts payable (174,021)
Accrued expenses 437,717
Unpaid losses and loss adjustment expenses 262,741
Unearned premiums 2,715,224
Due to related parties and other (43,598)
Provision for insurance 2,503,261
-----------
Net cash provided by operating activities 5,627,555
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equity securities (354,005)
Net cash used in investing activities (354,005)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 105,040
-----------
Net cash provided by financing activities 105,040
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 5,378,590
CASH AND CASH EQUIVALENTS, Beginning of Period 1,172,418
-----------
CASH AND CASH EQUIVALENTS, End of Period $ 6,551,008
===========
</TABLE>
5
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Universal Property & Casualty Insurance
Company. All intercompany accounts and transactions have been eliminated in
consolidation.
The Company formed a wholly-owned subsidiary, Universal Property & Casualty
Insurance Company. The subsidiary's application to become a Florida licensed
property and casualty insurance company was filed in May 1997 with the Florida
Department of Insurance and approved on October 29, 1997. In 1998, the
subsidiary began operations through the acquisition of homeowner insurance
policies issued by the Florida Residential Property and Casualty Joint
Underwriting Association ("JUA").
The JUA was established in 1992 as a temporary measure to provide insurance
coverage for individuals who could not obtain coverage from private carriers
because of the impact on the private insurance market of Hurricane Andrew in
1992. Rather than serving as a temporary source of emergency insurance coverage
as was originally intended, the JUA has become a major provider of original and
renewal insurance coverage for Florida residents. In an attempt to reduce the
number of policies in the JUA, and thus the exposure of the program to
liability, the Florida legislature has approved a number of initiatives to
depopulate the JUA, which to date has resulted in policies being acquired by
private insurers and provides additional incentives to private insurance
companies to acquire policies from the JUA.
On December 4, 1997, the Company raised approximately $6,700,000 in a private
offering with various institutional and/or otherwise accredited investors
pursuant to which the Company issued, in the aggregate, 11,208,996 shares of its
Common Stock at a price of $.60 per share. The proceeds of this transaction are
being used partially for working capital purposes and to meet the minimum
regulatory capitalization requirements ($5,300,000) required by the Florida
Department of Insurance to engage in this type of homeowners insurance company
business.
No income taxes have been provided as the Company has utilized loss
carryforwards.
On March 10, 1998, the Company made a decision to change its accounting fiscal
year end from April 30 to December 31 and in February 1998 commenced its
insurance business. As a result of the change in accounting year, the
three-month period ended April 30, 1997 has been presented for comparative
purposes.
The consolidated balance sheet of Universal Heights, Inc. and Subsidiary (the
"Company"), as of March 31, 1998, and the related consolidated statements of
operations and cash flows for the three months ended March 31, 1998 and April
30, 1997 are unaudited.
6
<PAGE>
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES, Continued
The interim financial statements reflect all adjustments (consisting of only
normal and recurring accruals and adjustments) which are, in the opinion of
management, necessary to a fair statement of the results for the interim periods
presented. The Company's operating results for any particular interim period may
not be indicative of results for the full year and this should be read in
conjunction with the Company's annual statements.
Certain reclassifications have been made in the 1997 financial statements to
conform them to and make them consistent with the presentation used in the 1998
financial statements.
The fair value of all financial instruments and investments consist of cash and
cash equivalents and approximated the carrying value at March 31, 1998. Cash and
cash equivalents approximate fair value due to their short-term nature. Loans
payable approximate fair value due to their variable rate.
NOTE 2 - INSURANCE OPERATIONS
The Company maintains its records in conformity with the accounting practices
prescribed or permitted by the Insurance Department of the State of Florida. To
the extent that certain of these practices differ from generally accepted
accounting principles ("GAAP"), adjustments have been made in order to present
the accompanying financial statements on the basis of GAAP.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
The Company commenced its insurance activity in February 1998 by assuming
policies from the JUA. The Company received the unearned premiums and is
servicing such policies.
The insurance subsidiary's chief executive officer is affiliated with companies
who provide the Company with management and personnel for the subsidiary's
underwriting claims and financial requirements, together with support offices,
equipment and services.
The fees for such services for the three months ended March 31, 1998 have been
recorded at $300,000 based on Company calculations and concurrence of Company
counsel. These affiliated companies have invoiced approximately $840,000 for
these services which is being disputed.
7
<PAGE>
NOTE 2 - INSURANCE OPERATIONS, Continued
The JUA's incentive program (Note 1) has provided approximately $1,700,000 to an
escrow account. These funds will be released to the Company when certain
conditions are met including assuming and maintaining for a three-year period a
minimum number of policies acquired from the JUA. The escrow account is not
included in the financial statements.
Premiums earned/received from the JUA are included in earnings evenly over the
terms of the policies. The Company does not have policies that provide for
retroactive premium adjustments.
Acquisition costs, consisting of commissions and other costs that vary with and
are directly related to the production of business, net of ceding commissions
will be deferred and amortized over the terms of the policies, but only to the
extent that unearned premiums are sufficient to cover all related costs and
expenses. At March 31, 1998, there were no acquisition costs.
An allowance for uncollectible premiums receivable will be established when it
becomes evident collection is doubtful.
Claims and claim adjustment expenses, less related reinsurance, are provided for
as claims are incurred. The provision for unpaid claims and claim adjustment
expenses includes: (1) the accumulation of individual case estimates for claims
and claim adjustment expenses reported prior to the close of the accounting
period; (2) estimates for unreported claims based on past experience modified
for current trends; and (3) estimates of expenses for investigating and
adjusting claims based on past experience.
Liabilities for unpaid claims and claim adjustment expenses are based on
estimates of ultimate cost of settlement. Changes in claim estimates resulting
from the continuous review process and differences between estimates and
ultimate payments are reflected in expense for the year in which the revision of
these estimates first became known.
The Company estimates claims and claims expenses based on historical experience
of similar entities and payment and reporting patterns for the type of risk
involved. These estimates are reviewed quarterly by the Company's affiliated
management professionals and any resulting adjustments are reflected in
operations for the period in which they are determined.
Inherent in the estimates of ultimate claims are expected trends in claim
severity, frequency and other factors that may vary as claims are settled. The
amount of uncertainty in the estimates for casualty coverage is significantly
affected by such factors as the amount of historical claims experience relative
to the development period, knowledge of the actual facts and circumstances, and
the amount of insurance risk retained.
8
<PAGE>
NOTE 2 - INSURANCE OPERATIONS, Continued
Reinsurance arrangements are utilized to limit maximum loss, provide greater
diversification of risk and minimize exposures on large or hazardous risks. A
large portion of the reinsurance is effected under reinsurance contracts known
as treaties and in some instances by negotiation on individual risks.
NOTE 3 - ISSUANCE OF STOCK
On January 14, 1998, the Company agreed to issue 45,000 shares of Common Stock
of the Company at a price of $1.00 per share to Sherman and Fischman, P.A. with
whom the Company has had an ongoing professional relationship, in consideration
for services previously rendered to the Company. These shares were not issued
until March 1998. The Company also issued 600,000 warrants to purchase common
stock at $1.00 per share, the quoted market value to an existing shareholder on
January 16, 1998. These warrants were issued for accrued legal services which
were valued at $60,000. In addition, pursuant to an investment banking agreement
dated December 24, 1997 between the Company and Hermitage Capital Corp.
("Hermitage"), the Company agreed to issue 200,000 warrants to purchase shares
of Common Stock to Hermitage at an exercise price of $.75 per share and have
been valued at $.35 per warrant using a Black-Scholes formula and is being
amortized over twelve months. The issuance of shares of Common Stock and
warrants to purchase Common Stock in each of the above transactions were issued
pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended. On March 31, 1998, the Company issued 300,000 warrants
to Fortress Financial Group. The value attributable to these warrants,
approximately $.35 per warrant, will be charged to operations commencing April
1, 1998. On May 7, 1998, the Company granted 1,050,000 options to officers and
directors to purchase stock at $1.63 per share, the quoted market price at that
date.
NOTE 4 - DISCONTINUED OPERATIONS
As of April 30, 1997, the Company ceased all marketing efforts of its souvenir
business and sports related products and at the time, estimated the loss on
disposed of inventories and patents at approximately $1,388,000. The losses are
reflected in the three months ended April 30, 1997. Subsequently, management's
efforts were spent on raising capital for its new insurance business and was
unable to close out the inventory and patents for the expected realizable
amounts. In February 1998, the Company determined that its efforts to commence
and coordinate the insurance activity would be more beneficial to the Company
and abandoned its efforts to pursue further recoveries of its former business.
Management disposed of its sports-related products inventory at closeout prices
resulting in losses of an additional $280,000. Accordingly, all remaining costs
attributable to the disposition of inventories were written off at December 31,
1997 and the Company has provided for additional costs of approximately $100,000
related to its discontinued operations.
9
<PAGE>
NOTE 5 - RECENTLY ADOPTED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 130, REPORTING COMPREHENSIVE
INCOME, which establishes standards for reporting and displaying comprehensive
income and its components (revenues, expenses, gains and losses) in financial
statements. In addition, SFAS No. 130 requires the Company to classify items of
other comprehensive income by their nature in a separate financial statement or
as a component of the statement of operations or the statement of shareholders'
equity and display the accumulated balance of other comprehensive income
separately in the shareholders' equity section of the consolidated balance
sheets. The Company adopted SFAS No. 130 on January 1, 1998 as required.
Also in June 1997, the FASB issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 130 establishes reporting
standards for public companies concerning annual and interim financial
statements of their operating segments and related information. Operating
segments are components of a company about which separate financial information
is available that is regularly evaluated by the chief operating decision
maker(s) in deciding how to allocate resources and assess performance. The
standard sets criteria for reporting disclosures about a company's products and
services, geographic areas and major customers.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of the Company's consolidated
financial condition and results of operations should be read in conjunction with
the Company's Condensed Consolidated Financial Statements and Notes thereto.
This document may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements.
OVERVIEW
As previously disclosed in the Company's annual report on Form 10-KSB for
the year ended April 30, 1997 ("Annual Report") filed with the Securities and
Exchange Commission on August 13, 1997 and as amended on October 14, 1997, the
Company has begun to implement its plan to become a financial services company
and, through its wholly-owned insurance subsidiary, Universal Property &
Casualty Company ("UPCIC"), has positioned itself to take advantage of what
management believes to be profitable business and growth opportunities in the
marketplace.
On October 29, 1997, the Florida Department of Insurance ("DOI") approved
the Company's application for a permit to organize UPCIC as a domestic insurance
company in the State of Florida. On December 4, 1997, the Company raised
approximately $6.72 million in a private offering with various institutional
and/or otherwise accredited investors pursuant to which the Company issued, in
the aggregate, 11,208,996 shares of its Common Stock at a price of $.60 per
share ("Private Offering"). The proceeds of the Private Offering have been used
to meet the minimum regulatory capitalization requirements ($5,300,000) required
by the DOI to obtain an insurance company license and for general working
capital purposes. The Company received on December 31, 1997 a license to engage
in underwriting homeowners insurance in the state of Florida.
The Company intends to continue to devote its efforts to the business
plan for UPCIC and has entered into agreement with the JUA whereby since
February 1998 the Company has assumed and is currently servicing over 27,000
policies. These policies, when renewed, represent approximately $26,000,000 in
estimated annual gross direct written premium revenues. In addition, the Company
has received approximately $89 per policy in bonus incentive money paid to the
Company by the JUA for assuming the policies. The bonus money must be maintained
in an escrow account for 3 years. The Company must maintain the policies from
the JUA for the 3 year period at which point the Company will receive the bonus
money.
SEASONALITY
Sales of the Company's novelty and souvenir products were correlated with
the visibility of the various proprietary marks and their owners. The Company
has not determined the level of seasonality, if any, in the insurance business.
The Company believes that its earnings has the most potential to be effected
negatively during the hurricane windstorm season that begins June 1, 1998, and
ends November 30, 1998.
FINANCIAL CONDITION
CASH AND CASH EQUIVALENTS at March 31, 1998 aggregated $6,551,000. The
source of liquidity for possible claims payments consists of net premiums, after
deductions for expenses.
The Company expects that the proceeds from the Private Offering together
with the JUA premiums and renewals are sufficient to meet the Company's working
11
<PAGE>
capital requirements for the next twelve months. The primary use of the Private
Offering was to provide restricted cash needed for the JUA.
The Company believes in the short-term it will continue to be able to
obtain additional policies from the JUA and continue to receive incentive
bonuses. The Company currently has obtained approximately 27,000 policies from
the JUA and can currently receive up to 30,000 policies from the JUA. To
continue to grow its insurance operations, the Company can obtain policies in
the open market and request permission from the JUA and the DOI to take more
than the 30,000 policies from the JUA for which it has been approved. This base
of insurance business will also provide renewals of premiums in future periods
which should allow the Company to develop its insurance business beyond the next
twelve months.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1998
VERSUS THREE MONTHS ENDED APRIL 30, 1997
The operations for the three months ended March 31, 1998 consist of the
Company's newly started insurance business, accordingly, the operations are not
comparative to the previous period as there were no insurance operations
previously and the Company's former souvenir business was discontinued.
As a result of a change in the year, the Company presented the three months
ended April 30, 1997 (the fourth quarter of its last fiscal year) as
comparatives.
The Company's prime source of current revenue is insurance premiums received
from the JUA.
12
<PAGE>
UNIVERSAL HEIGHTS, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 15, 1997, two former employees of the Company, Johnny Walker and
Larry Martin filed a lawsuit against the Company in the Circuit Court for
Pinellas County, Florida. The Plaintiffs asserted claims for an injunction and
for damages for breach of an Asset Purchase Agreement. The Complaint also
includes breach of employment agreements, breach of royalty agreements and other
relief. In connection therewith, the Plaintiffs demanded unpaid salaries
amounting to approximately $130,000. The Company has negotiated a settlement
with the Plaintiffs pursuant to which the Plaintiffs received exclusive use of
certain patents and trademarks, the remaining inventory of baseball gloves, and
10,000 shares of Common Stock, yet to be issued.
ITEM 2. CHANGES IN SECURITIES
Pursuant to an investment banking agreement dated December 24, 1997
between the Company and Hermitage Capital Corp. ("Hermitage"), the Company
agreed to issue 200,000 warrants to purchase shares of Common Stock to Hermitage
at an exercise price of $.75 per share. The warrants issued to Hermitage have
been valued at $.35 per shares using a Black-Scholes formula and are being
amortized over twelve months. Under the investment banking agreement, Hermitage
agreed to provide the Company with certain investment banking and consulting
activities with respect to institutional investors for a one year period in
return for cash in the amount of $300,000 and the warrants. On January 14, 1998,
the Company agreed to issue 45,000 shares of Common Stock of the Company at a
price of $1.00 per share to Sherman and Fischman, P.A., with whom the Company
has had an ongoing professional relationship, in consideration for services
previously rendered to the Company. These shares were not issued until March
1998. The Company also issued 600,000 warrants to purchase common stock at $1.00
per share, the quoted market value, to an existing shareholder on January 16,
1998. On March 31, 1998, the Company issued 300,000 warrants to purchase Common
Stock at an exercise price of $1.00 per share and $60,000 to Fortress Financial
Group for investment banking services with respect to retail investors. In
addition, on May 7, 1998, the Company granted an aggregate of 1,050,000 options
to purchase shares of Common Stock to the officers and directors of the Company
at an exercise price of $1.63 per share, the quoted market price at that date.
The shares of Common Stock and warrants and options to purchase Common Stock in
each of the above transactions were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
13
<PAGE>
UNIVERSAL HEIGHTS, INC.
PART II - OTHER INFORMATION
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
None.
14
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNIVERSAL HEIGHTS, INC.
Date: May 15, 1998 /s/ Bradley I. Meier
----------------------------
Bradley I. Meier, President
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,551,008
<SECURITIES> 354,005
<RECEIVABLES> 12,655
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,904,577
<PP&E> 6,661
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,828,906
<CURRENT-LIABILITIES> 7,440,962
<BONDS> 0
0
1,387
<COMMON> 146,776
<OTHER-SE> 5,239,781
<TOTAL-LIABILITY-AND-EQUITY> 12,828,906
<SALES> 1,571,076
<TOTAL-REVENUES> 1,666,258
<CGS> 769,486
<TOTAL-COSTS> 769,486
<OTHER-EXPENSES> 523,941
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 372,831
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 372,831
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
