<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(D) OF THE EXCHANGE ACT
Commission file number: 0-22242
CASINO RESOURCE CORPORATION
Minnesota 41-0950482
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
707 Bienville Boulevard
Ocean Springs, Mississippi 39564
(Address of principal executive officers)
601-872-5558
(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. [X] Yes [ ] No
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] Yes [ ] No
As of February 6, 1998, 9,868,464 Shares of Common Stock and 2,760,000 of
Redeemable Class A Warrants of the Company were outstanding.
1
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INDEX TO QUARTERLY REPORT
ON FORM 10-QSB
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Exhibits and Reports on Form 8-K
SIGNATURES
2
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
ASSETS December 31, September 30,
1997 1997*
------------ -------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $1,568 $3,097
Accounts receivable, net 497 531
Inventory 249 298
Prepaid expenses 851 1,124
------------ -----------
Total Current Assets 3,165 5,050
------------ -----------
------------ -----------
Property and Equipment 20,920 19,901
Less accumulated depreciation (4,013) (3,670
------------ -----------
Net Property and Equipment 16,907 16,231
------------ -----------
Other Assets
Related parties assets 681 754
Deferred development cost 1,285 1,230
Intangibles, net 539 551
Note receivable 226 221
Pre-opening and Other 1,893 2,408
------------ -----------
Total Other Assets 4,624 5,164
------------ -----------
24,696 26,445
------------ -----------
------------ -----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $688 $1,126
Accrued expenses 1,286 1,220
Line-of-credit and current maturities
of long-term debt 2,178 1,174
------------ -----------
Total Current Liabilities 4,152 3,520
------------ -----------
Long-term debt 11,771 13,339
------------ -----------
Total Liabilities 15,923 16,859
Minority Interest in Subsidiary - -
Commitments and Contingencies
Stockholders' Equity
Capital shares 99 97
Paid in Capital 22,975 22,793
Deficit (14,301) (13,304)
------------ -----------
Total Stockholders' Equity 8,773 9,586
------------ -----------
$24,696 $265,445
------------ -----------
------------ -----------
</TABLE>
*Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
3
<PAGE>
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
INCOME FROM CONTINUING OPERATIONS 1997 1996
------- ------
<S> <C> <C>
Entertainment revenues $3,646 $2,761
Hospitality revenues 860 902
Gaming revenues 536 -
Operating costs - entertainment 2,733 1,759
Operating costs - hospitality 509 629
Operating costs - gaming 1,411 -
General and administrative expense 735 489
Other (expense) (752) (127)
------- ------
NET INCOME (LOSS) BEFORE MINORITY INTEREST (1,098) 659
MINORITY INTEREST IN NET LOSS OF
CONSOLIDATED SUBSIDIARY 101 -
NET INCOME (LOSS) $ (997) $ 659
------- ------
------- ------
NET INCOME (LOSS) PER COMMON SHARE $ (.10) $ .07
------- ------
------- ------
Weighted average shares, common stock 9,893,364 9,934,297
--------- ---------
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(997) $659
Adjustments to reconcile net income to net cash
Depreciation and amortization 570 284
Changes in assets and liabilities
Accounts receivable 34 (243)
Prepaid expenses 273 171
Inventory 49 4
Pre-opening and other 484 (7)
Accounts payable (438) (326)
Accrued expenses 66 30
------- ------
Net Cash Provided by (used in) Operating Activities 41 572
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in restricted cash - (2)
Purchase of property and equipment (1,019) (50)
Increase in note receivable (5) -
Increase in deferred development costs (55) (737)
(Increase) decrease in due to/from related
parties - net 73 (3)
------- ------
Net Cash Used in Investing Activities (1,006) (792)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock and other
Payments on line-of-credit and long-term debt (564) (259)
------- ------
Net Cash Used In Financing Activities (564) (259)
------- ------
Net Decrease in Cash and Cash Equivalents (1,529) (479)
CASH AND CASH EQUIVALENTS
At beginning of period 3,097 1,546
------- ------
At end of period $ 1,568 $ 1,067
------- ------
------- ------
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
4
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CASINO RESOURCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which, in the opinion of management, are necessary for a fair
statement of results for the interim periods.
Certain reclassifications of prior period amounts have been made to
conform to current period presentation.
The results of operations for the three-month period ended December 31,
1997 are not necessarily indicative of the results to be expected for the
full year.
NOTE 2 DEBT
The Company's debt at December 31, 1997 consists primarily of a first
lien mortgage on its Grand Hinckley Inn ($2,450,686); a first lien mortgage
on the Country Tonite Theatre ($7,371,292); a debenture with a face value of
$1,500,000 bearing a 6% interest rate; a note payable of $1,000,000 with
interest at 10% of operating income as defined, of the subsidiary that
operates the Tunisian casino; and a note payable of $800,000 with interest at
the greater of 20% per annum or 5% of the gross gaming win of the Tunisian
casino.
NOTE 3 CAPITAL STOCK
As a result of an individuals default under a note agreement in January
1998; 220,000 shares of stock previously treated as retired on September 30,
1997 were reinstated retroactively back to October 1, 1997, and the Company
took an impairment charge of $260,000.
Subsequent to December 31, 1997, the Company purchased and retired
24,900 shares of Common Stock in the open market under a stock repurchase
plan.
NOTE 4 DEFERRED DEVELOPMENT COSTS
Deferred development costs consist principally of externally incurred
charges related to the Pokagon Indian Gaming award in Indiana and Michigan.
NOTE 5 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash expended during the three months ended December 31, 1998 and 1997
for interest was $493,000 and $276,000, respectively, and income tax payments
for the same periods were $22,000 and $74,000, respectively. The Company has
federal and state tax loss carryforwards of approximately $11.0 million.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.
THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THREE MONTHS ENDED DECEMBER
31, 1996
CONSOLIDATED
The Company's revenues for the three months ended December 31, 1997 were
$5,042,000, an increase of $1,379,000 or 38% from the $3,663,000 recorded in
the prior year period. Of the increase, $885,000 or 64% was provided by the
entertainment segment, the gaming segment provided $535,000 or 39% of the
increase while the hospitality segment accounted for a decrease of $42,000.
ENTERTAINMENT
COUNTRY TONITE PRODUCTION SHOW
Country Tonite Production Show revenues totaled $854,000 (including
$581,000 eliminated in consolidation) for the first quarter, an increase of
$308,000 from the comparable fiscal 1997 quarter revenues of $546,000. The
increase was due to the addition of the Country Tonite show at Pigeon Forge,
Tennessee offset by the termination of the Aladdin contract on November 15,
1997. Operating income increased to $170,000 in the first quarter of fiscal
1998 from $118,000 in the comparable prior year quarter (including $581,000
eliminated in consolidation). Operating expenses (including project, general
and administrative cost) increased to $684,000 for the three months ended
December 31, 1997 from $428,000 in the prior year period. The increase is
again the direct result of adding the Pigeon Forge venue.
COUNTRY TONITE THEATRE-BRANSON, MISSOURI
Paid attendance reached 43% at an average ticket price of $16.72 for the
quarter ended December 31, 1997 compared to paid attendance of 47% at an
average ticket price of $16.34 for the comparable prior year period. The
decrease in paid occupancy was more than offset by an increase in average
ticket price and the addition of revenues from the Golden Girls show resulted
in increased revenues of $65,000 or 3% from the fiscal 1997 first quarter
total of $2,215,000 to $2,280,000 for the first quarter of fiscal 1998. As a
result of cost containment efforts by management, operating expenses
(including project, general and administrative expenses) decreased $18,000 or
1% to $1,284,000 for the first quarter of fiscal 1998 from $1,302,000 in the
first quarter of fiscal 1997. Operating income increased by $83,000 or 9% to
$996,000 in the first quarter of fiscal 1998 from $913,000 in the first
quarter of fiscal 1997.
6
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COUNTRY TONITE THEATRE-PIGEON FORGE, TENNESSEE
The Country Tonite Theatre in Pigeon Forge opened for business on March
21, 1997. Revenues for the three months ended December 31, 1997 totaled
$1,093,000. Operating expenses for the period totaled $1,346,000 (including
$581,000 eliminated in consolidation) generating an operating loss of
$253,000 before a minority interest allocation of $101,000. The Company
anticipated an operating loss during the initial show season.
HOSPITALITY
GRAND HINCKLEY INN
For the three months ended December 31, 1997, revenues for the Grand
Hinckley Inn totaled $860,000; a decrease of $42,000 from revenues of
$902,000 for the three months ended December 31, 1996. The average occupancy
rate fell slightly from 76% in the first quarter of fiscal 1997 to 75% in the
first quarter of fiscal 1998. The average daily room rate decreased from
$60.47 in the first quarter of fiscal 1997 to $54.08 in the first quarter of
fiscal 1998. Operating costs totaled $509,000 for the three months ended
December 31, 1997 compared to $629,000 for the comparable 1996 period, a
decrease of $120,000 or 19%. The revenue decrease was more than offset by the
decrease in operating expense resulting in operating income totalling
$351,000 for the first quarter of fiscal 1998 compared to $273,000 for the
first quarter of fiscal 1997, a 29% increase. The decrease in operating
costs was due principally to a decline in windfall profits expense.
GAMING
CASINO CARAIBE
The Company's first casino operation opened on October 18, 1997 in
Sousse, Tunisia. Revenues from Casino Caraibe for the three months ended
December 31, 1997 were $535,000. Operating costs totaled $1,411,000 resulting
in an operating loss of $876,000. An operating loss was anticipated due to
construction and licensing delays that pushed the opening into Tunisia's
slowest tourist season and due to the amortization of pre-opening costs over
a one year period. Management also anticipates an operating loss for the
second quarter of fiscal 1998.
GENERAL AND ADMINISTRATIVE
The Company's general and administrative expenses aggregated $735,000 in
the first quarter of fiscal 1997 compared to $551,000 for the first quarter
of fiscal 1996. The increase resulted primarily from higher legal and
professional fees and costs associated with the start up of the casino in
Tunisia and the theater in Pigeon Forge.
OTHER
Interest expense totaled $481,000 for the first quarter of fiscal 1998
compared to $267,000 for the first quarter of fiscal 1997. The increase was
due to charges from a September 1997 convertible debenture issue and higher
levels of indebtedness.
7
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Other expense for the first quarter of fiscal 1998 includes a $260,000
impairment charge for writeoff of a note receivable from a principal
stockholder.
Other income for the first quarter of fiscal 1997 includes a gain of
approximately $122,000 from an arbitration award.
No provision for income taxes was recorded due to approximately $11 million
of federal and state income tax loss carryforwards.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income". The new Standard discusses how to report and
display comprehensive income and its components. The standard is effective for
years beginning after December 15, 1997. When the Company adopts this
statement, it is not expected to have a material impact on the Company's
financial statements.
In June 1997 the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This
standard requires enterprises to report certain information about operating
segments, their products and services, geographic areas, and major customers.
This standard is effective for years beginning after December 15, 1997. When
the Company adopts this statement, it is not expected to have a material impact
on the Company's financial statements.
PRIVATE SECURITIES LITIGATION ACT OF 1995
All statements contained herein that are not historical facts are based on
current expectations. These statements are forward looking in nature and
involve a number of risks and uncertainties. Actual results may differ
materially. Among the factors that could cause actual results to differ
materially are the following: the availability of sufficient capital to finance
the Company's business plan on terms satisfactory to the Company; competitive
factors, such as the introduction of new hotels or renovation of existing hotels
in the same markets (such as the new hotel recently constructed adjacent to the
casino in Hinckley, Minnesota): failure to find a replacement venue for the
Country Tonite Las Vegas Show; changes in travel patterns which could affect
demand for the Company's hotel, theatres or casinos; changes in development and
operating costs, including labor, construction, land, equipment, and capital
costs; general business and economic conditions; political unrest in Tunisia or
the region; and other risk factors described from time to time in the Company's
reports filed with the Securities and Exchange Commission. The Company wishes
to caution readers not to place undue reliance on any such forward looking
statements, which statements are made pursuant to the Private Securities
Litigation Reform Act of 1995, and as such, speak only as to due the date made.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased $1,529,000 to $1,568,000 at December
31, 1997 from $3,097,000 at September 30, 1997. The Company's principal source
of funds during the three months ended December 31, 1997 were funds provided by
operations. The Company's principal use of funds during the first quarter of
fiscal 1998 consisted of capital expenditures of $1,019,000 and payment on debt
totaling $564,000.
8
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The failure to find a replacement venue for the Company's Country Tonite
Show in Las Vegas could have a negative effect on operating income of the
Company.
The opening by the tribe of a 281-room hotel adjacent to the casino will
likely create a more competitive market and could have a negative effect on
operating income of the Company.
On January 5, 1998 the Company's Board of Directors authorized a stock
buyback program providing for purchase by the Company of up to 400,000 shares of
its common stock. Expenditures to repurchase 24,900 shares totaled $31,000
through February 6, 1998.
At December 31, 1997, the Company had $100,000 available under a line of
credit with a bank, which expires in February 1999.
Subject to the above, because it is the off season for the Company's
theatres and casino in Tunisia, the Company may require short term financing
until June 1998, the source of which has not been identified.
CAPITAL EXPENDITURES
Capital expenditures by the Company were $1,019,000 for the three months
ended December 31, 1997 compared to $50,000 for the comparable period in the
prior year. The increase was attributable to expenditures to complete the
Company's casino project in Tunisia.
SEASONALITY
The Company expects its hotel operations will be affected by seasonal
factors, including holidays, weather and travel conditions. The theatre
operation in Branson, Missouri, will also be affected by seasonal factors and,
in addition, will be closed from mid-December through mid-March. This is also
the case with the theatre operation in Pigeon Forge, Tennessee, which will be
closed from the first of January through mid-March. This period is historically
when theatres like the Company's normally close in Branson and Pigeon Forge.
The casino in Tunisia will also be subject to seasonality with the main tourist
season comprised principally of the period from April through October.
IMPACT OF INFLATION
Management does not believe that inflation has had any significant adverse
impact on the Company's financial condition or results of operations for the
periods presented. An increase in the rate of inflation could adversely affect
the Company's future operations and expansion plans.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1995, a suit was brought against the Company in Federal District Court
of New Jersey, which venue was later transferred to the Federal District Court
for Southern Mississippi. Plaintiff (Gelb Productions, Inc., a New Jersey
corporation) asserts it had a contract with the Company to provide eight
professional boxing events at the Company's former Biloxi Star Theater. The
complaint was thereafter amended by plaintiff to reflect additional allegations
that defendant tortuously harmed plaintiff's business reputation and maliciously
interfered with existing and prospective economic relationships. Settlement was
reached with Gelb in December 1997 for $100,000 plus attorney's fees and
expenses which will be decided by the Mississippi Court under the Lodestar
method.
The Company commenced an arbitration action in November 1994 with the
Arbitration Association in Minneapolis, Minnesota, against Cunningham Hamilton
Quiter, P.A. (CHQ), the architect it retained in connection with the
construction of the Biloxi theater. On December 30, 1994, the architectural
firm commenced a suit in a Mississippi state court seeking a foreclosure on a
mechanics' lien it had filed on the Biloxi theater project in the amount of
approximately $321,000, which sum the Company escrowed. On December 26, 1996,
the Arbitration Association announced the Company was entitled to an award of
approximately $142,000, which sum was a portion of previously escrowed $321,000.
The decision resulted in a gain to the Company of approximately $122,000 in
fiscal 1997.
James Barnes and Prudence Barnes, two former officers of a subsidiary of
the Company, have brought suit in the State District Court, Clark County,
Nevada, against the Company in connection with their employment termination in
June 1995. No specific amount of damages has been claimed. The Company intends
to vigorously defend itself in this matter.
In March 1996, PDC, a Minnesota limited liability company, and two of its
officers filed suit against the Company, Harrah's Entertainment and Monarch
Casinos, in the Fourth Judicial District Court of Minnesota, and in Michigan,
which venue was later dropped, alleging defamation, violation of the Lanham Act,
violation of the Michigan Consumer Protection Act, tortuous interference with
its business relations and prospective economic advantage, as well as false
light invasion of privacy in connection with the Pokagon Indian Gaming Award.
Under the Lanham Act, the plaintiffs are claiming a right to treble damages.
The plaintiff recently indicated that it intends to add Racketeer Influenced
and Corrupt Organization (RICO) and Sherman Antitrust Act claims to its
complaint under the Sherman Act. The plaintiff seeks compensatory damages and
has not claimed a specific amount of damages, but claims such damages exceed
$50,000. The plaintiff also seeks recovery of their attorneys' fees. The
Company's general liability carrier has taken up the defense of the Company.
The Company intends to vigorously defend itself in this matter.
10
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On November 13, 1995, Casino Resorts, Inc., a Minnesota corporation,
commenced an action in the State District Court for the Fourth Judicial District
of Minnesota against Monarch and the Company alleging breach of contract against
Monarch and tortuous interference with a contractual business relationship
against the Company. The plaintiff seeks compensatory damages and has not
claimed a specific amount of damages, but claims such damages exceed $50,000.
The plaintiff also seeks reimbursement of costs and expenses. The matter came
before the Fourth Judicial District Court of Minnesota, on December 9, 1996, for
hearing on motions by the Company and Monarch for summary judgment. On January
22, 1997, the Company's motion for summary judgment on plaintiff's claim of
tortuous interference was granted and plaintiff's claim against the Company was
dismissed. Additionally, Monarch's motion of summary judgment on plaintiff's
claim for breach of contract was granted and plaintiff's claim against it was
dismissed. Casino Resorts, Inc. filed an appeal with the Minnesota Court of
Appeals on May 7, 1997, claiming that there are factual issues, which must be
resolved by a jury. In December 1997, the Minnesota Court of Appeals affirmed
the decision of the lower court dismissing the plaintiff's claims of tortuous
interference against the Company.
The Company has received notice that the action of Cunningham, Hamilton,
Quiter, P.A. (CHQ) against John J. Pilger (CEO of the Company) in Jackson County
Circuit Court, Mississippi originally set in abeyance pending completion of
arbitration proceeding, is now reconstituted. Cunningham alleges that the
Company owes CHQ approximately $40,000 for services rendered in 1994. The
Company denies these charges and plans to vigorously defend itself in this
matter.
On December 31, 1997, the Company's former chairman defaulted on repaying
the $1,232,000 (principal) of notes receivable due the Company. The Company
filed suit against the individual on January 2, 1998. The Company held 150,000
shares of the Company's stock as collateral. On January 15, 1998, the Company
signed an agreement with the individual. Under the agreement, 220,000
additional shares of the Company's stock would be canceled along with the
150,000 shares held at the market price of $1.19 per share. The shares to be
cancelled were not treated as outstanding as of September 30, 1997.
Additionally, the Company and the individual entered into a new note agreement.
The new note of $1,196,885, including approximately $143,000 of previously
reserved interest, bears interest at 7%, payable on maturity on January 15,
2001. The note is collateralized by the individual's 5% interest in the
Company's Pokagon management fee. Solely at the Company's discretion, at any
time prior to maturity, the Company can take the collateral as payment in full
for the note. Since the individual's ability to pay the note is not known, the
Company has provided an impairment reserve for $791,900, which represents the
remaining principal balance after stock cancellations. Generally accepted
accounting principles do not permit the recording of contingent assets until
realized and as the individual's ability to pay the note is not known, the
Company provided an impairment reserve of $791,900. In January 1998, this
individual failed to deliver the 220,000 shares of stock required under the
agreement. Accordingly, the Company recorded an impairment charge in the first
quarter of fiscal 1998 of $260,000.
11
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ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K
A) Exhibits
Exhibit 27 - Financial Data Schedule
2) The following Forms 8-K have been filed during the three months
ended December 31, 1997:
1) A report on Form 8-K was filed on December 31, 1997
reporting paydown of debt and modification of debt terms.
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on behalf by the undersigned, hereunto duly authorized.
CASINO RESOURCE CORPORATION
Date: February 17, 1997 s/ John J. Pilger
--------------------------------
John J. Pilger, President & CEO
Date: February 17, 1997 s/ Maurice P. Gaudet
--------------------------------
Maurice P. Gaudet, Chief Financial
Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE COMPANY'S
REPORT ON THE FORM 10-QSB FOR THE THREE MONTHS ENDED DECEMBER 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 1,568
<SECURITIES> 0
<RECEIVABLES> 497
<ALLOWANCES> 0
<INVENTORY> 249
<CURRENT-ASSETS> 3,165
<PP&E> 20,920
<DEPRECIATION> 4,013
<TOTAL-ASSETS> 24,696
<CURRENT-LIABILITIES> 4,152
<BONDS> 0
0
0
<COMMON> 99
<OTHER-SE> 8,674
<TOTAL-LIABILITY-AND-EQUITY> 24,696
<SALES> 5,042
<TOTAL-REVENUES> 5,042
<CGS> 0
<TOTAL-COSTS> 5,399
<OTHER-EXPENSES> 169
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 471
<INCOME-PRETAX> (997)
<INCOME-TAX> 0
<INCOME-CONTINUING> (997)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (997)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
