UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 33-37704-03
INDEPENDENCE TAX CREDIT PLUS L.P. II
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3646846
------------------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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 _X_ No ____
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
============ ============
September 30, March 31,
1997 1997
------------ ------------
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $7,680,723 and $5,929,690,
respectively $102,811,083 $104,314,397
Cash and cash equivalents 3,746,300 4,622,176
Cash held in escrow 2,984,543 2,867,836
Deferred costs, net of accumulated
amortization of $234,008 and
$175,709, respectively 565,762 599,679
Other assets 392,857 427,412
------------ ------------
Total assets $110,500,545 $112,831,500
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 40,671,443 $ 39,799,356
Construction loans payable 18,933,650 20,062,725
Accounts payable and other
liabilities 5,213,863 4,949,114
Due to local general partners and
affiliates 3,063,382 3,436,045
Due to general partner and
affiliates 204,361 191,736
------------ ------------
Total liabilities 68,086,699 68,438,976
------------ ------------
Minority interest 277,921 317,189
------------ ------------
Commitments and contingencies (Note 3)
Partners' capital:
Limited partners (58,928 BACs
issued and outstanding) 42,238,515 44,158,531
General partner (102,590) (83,196)
------------ ------------
Total partners' capital 42,135,925 44,075,335
------------ ------------
Total liabilities and partners' capital $110,500,545 $112,831,500
============ ============
See Accompanying Notes to Consolidated Financial Statements
2
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
========================== ==========================
Three Months Ended Six Months Ended
September 30, September 30,
-------------------------- --------------------------
1997 1996 1997 1996
-------------------------- --------------------------
Revenues
Rental income $ 1,873,538 $ 1,459,663 $ 3,739,350 $ 2,812,148
Other income 58,507 87,915 125,013 204,314
----------- ----------- ----------- -----------
Total revenues 1,932,045 1,547,578 3,864,363 3,016,462
----------- ----------- ----------- -----------
Expenses
General and
administrative 535,083 397,732 963,929 740,120
General and
administrative-
related parties
(Note 2) 102,623 101,339 235,005 197,548
Repairs and
maintenance 375,458 284,528 660,290 522,652
Operating 149,135 153,234 509,187 325,862
Taxes 198,937 203,269 364,418 339,859
Insurance 115,792 84,116 266,582 211,811
Financial,
principally
interest 486,360 339,443 999,849 686,221
Depreciation and
amortization 957,917 786,796 1,809,332 1,343,979
----------- ----------- ----------- -----------
Total expenses 2,921,305 2,350,457 5,808,592 4,368,052
----------- ----------- ----------- -----------
Loss before
minority
interest (989,260) (802,879) (1,944,229) (1,351,590)
Minority interest
in loss of
subsidiary
partnerships 1,969 2,886 4,819 5,191
----------- ----------- ----------- -----------
Net loss $ (987,291) $ (799,993) $(1,939,410) $(1,346,399)
=========== =========== =========== ===========
Net loss-limited
partners $ (977,418) $ (791,993) $(1,920,016) $(1,332,935)
=========== =========== =========== ===========
Number of
BACs
outstanding 58,928 58,928 58,928 58,928
=========== =========== =========== ===========
Net loss per BAC (16.59) (13.44) (32.58) (22.62)
=========== =========== =========== ===========
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
===============================================
Limited General
Total Partners Partner
-----------------------------------------------
Partners' capital -
April 1, 1997 $ 44,075,335 $ 44,158,531 $ (83,196)
Net loss (1,939,410) (1,920,016) (19,394)
------------ ------------ ---------
Partners' capital -
September 30, 1997 $ 42,135,925 $ 42,238,515 $(102,590)
============ ============ =========
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
============================
Six Months Ended
September 30,
----------------------------
1997 1996
----------------------------
Cash flows from operating activities:
Net loss $(1,939,410) $(1,346,399)
Adjustments to reconcile net loss to
net cash used in
operating activities:
Depreciation and amortization 1,809,332 1,343,979
Minority interest in loss of
subsidiaries (4,819) (5,191)
Increase (decrease) in accounts
payable and other liabilities 264,749 (1,138,761)
Increase in cash held
in escrow (33,290) (77,827)
Decrease in other assets 34,555 45,893
Increase in due to local general
partners and affiliates 9,334 1,040,656
Decrease in due to local general
partners and affiliates (243,497) (1,354,422)
Increase in due to
general partner and affiliates 12,625 62,323
----------- -----------
Total adjustments 1,848,989 (83,350)
----------- -----------
Net cash used in operating activities (90,421) (1,429,749)
----------- -----------
Cash flows from investing activities:
Improvements to property and
equipment (247,719) (242,828)
Increase in construction in progress 0 (4,001,162)
Increase in cash held in escrow (83,417) (259,619)
Decrease in due to local general
partners and affiliates (138,500) (2,634,383)
Decrease in accounts payable and
other liabilities 0 (448,727)
----------- -----------
Net cash used in investing activities (469,636) (7,586,719)
----------- -----------
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(continued)
(Unaudited)
=============================
Six Months Ended
September 30,
-----------------------------
1997 1996
-----------------------------
Cash flows from financing activities:
Proceeds from mortgage notes 217,895 159,360
Principal payments of mortgage
notes (145,808) (1,148,075)
Proceeds from construction loans 99,751 4,644,993
Principal payments on construction
loans (428,826) 0
Increase in deferred costs (24,382) (13,627)
Decrease in capitalization
of consolidated subsidiaries
attributable to minority interest (34,449) (171,322)
----------- ------------
Net cash (used in) provided by
financing activities (315,819) 3,471,329
----------- ------------
Net decrease in cash and
cash equivalents (875,876) (5,545,139)
Cash and cash equivalents at
beginning of period 4,622,176 13,646,746
----------- ------------
Cash and cash equivalents at
end of period $ 3,746,300 $ 8,101,607
=========== ============
Supplemental disclosure of noncash
financing activities:
Property and equipment reclassified
from construction in progress $ 0 $ 5,369,784
Conversion of construction notes
payable to mortgage notes
payable 800,000 5,025,622
See Accompanying Notes to Consolidated Financial Statements
6
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
Note 1 - General
Independence Tax Credit Plus L.P. II (a Delaware limited partnership) (the
"Partnership") was organized on February 11, 1992, and commenced its public
offering on January 19, 1993. The general partner of the Partnership is Related
Independence Associates L.P., a Delaware limited partnership (the "General
Partner").
The Partnership's business is to invest in other partnerships ("Local
Partnerships", "subsidiaries" or "subsidiary partnerships") owning leveraged
apartment complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986, some of which complexes
may also be eligible for the historic rehabilitation tax credit.
As of September 30, 1997, the Partnership has acquired an interest in fifteen
Local Partnerships. The Partnership does not intend to acquire additional
properties. Through the rights of the Partnership and/or an affiliate of the
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the subsidiary local
partnerships and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary partnerships.
The Partnership's fiscal quarter ends September 30. All subsidiaries have fiscal
quarters ending June 30. Accounts of the subsidiaries have been adjusted for
intercompany transactions from July 1 through September 30.
All intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions from and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary partnership have been charged to the Partnership.
Such losses aggregated approximately $7,000 and $5,000, and $13,000 and $7,000
for the three and six
7
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
months ended September 30, 1997 and 1996, respectively. The Partnership's
investment in each subsidiary is equal to the respective subsidiary's partners'
equity less minority interest capital, if any. In consolidation, all subsidiary
partnership losses are included in the Partnership's capital account except for
losses allocated to minority interest capital.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted or condensed. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K for the period ended March 31,
1997.
The books and records of the Partnership are maintained on the accrual basis of
accounting in accordance with generally accepted accounting principles. In the
opinion of the General Partner of the Partnership, the accompanying unaudited
financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial position of the
Partnership as of September 30, 1997, the results of operations for the three
and six months ended September 30, 1997 and 1996 and changes in cash flows for
the six months ended September 30, 1997 and 1996. However, the operating results
for the six months ended September 30, 1997 may not be indicative of the results
for the year.
8
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
Note 2 - Related Party Transactions
An affiliate of the General Partner has a .01% interest as a special limited
partner in each of the Local Partnerships.
The costs incurred to related parties for the three and six months ended
September 30, 1997 and 1996 were as follows:
====================== ======================
Three Months Ended Six Months Ended
September 30, September 30,
---------------------- ----------------------
1997 1996 1997 1996
---------------------- ----------------------
Partnership
management
fees (a) $ 12,500 $ 25,000 $ 25,000 $ 50,000
Expense
reimburse-
ment (b) 22,486 23,627 75,089 50,616
Property
management
fees (c) 62,637 49,712 124,916 90,932
Local
administrative
fee (d) 5,000 3,000 10,000 6,000
-------- -------- -------- --------
$102,623 $101,339 $235,005 $197,548
======== ======== ======== ========
(a) The General Partner is entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year will be accrued without interest and will be
payable from working capital reserves or to the extent of available funds after
the Partnership has made distributions to the limited partners of sale or
refinancing proceeds equal to their original capital contributions plus a 10%
priority return thereon (to the extent not theretofore paid out of cash flow).
Partnership management fees owed to the General Partner amounting to
approximately $139,000 and $115,000 were
9
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. II
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
accrued and unpaid as of September 30, 1997 and March 31, 1997, respectively.
(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees incurred by the Local Partnerships amounted to
$141,478 and $117,431 and $261,724 and $176,631 for the three and six months
ended September 30, 1997 and 1996, respectively. Of these fees, $62,637 and
$49,712 and $124,916 and $90,932 were incurred to affiliates of the subsidiary
partnerships' general partners.
(d) Independence SLP L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $5,000
per year from each subsidiary partnership.
Note 3 - Commitments and Contingencies
There were no changes and/or additions to disclosures regarding the subsidiary
partnerships which were included in the Partnership's Annual Report on Form 10-K
for the period ended March 31, 1997.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Partnership's primary source of funds include interest earned on proceeds
from the offering which were invested in tax-exempt money market instruments
pending final payments to Local Partnerships and a working capital reserve and
interest thereon. All these sources of funds are available to meet obligations
of the Partnership.
The Partnership has received $58,928,000 (including volume discounts of $2,000)
in gross proceeds for BACs pursuant to a public offering resulting in net
proceeds available for investment of approximately $46,848,000 after volume
discounts, payment of sales commissions, acquisition fees and expenses,
organization and offering expenses and establishment of a working capital
reserve.
As of September 30, 1997, the Partnership has invested approximately $46,996,000
(not including acquisition fees of approximately $3,502,000) of net proceeds in
fifteen Local Partnerships of which approximately $3,107,000 remains to be paid
(including approximately $1,167,000 being held in escrow) as certain benchmarks,
such as occupancy level, must be attained prior to the release of the funds. The
Partnership does not intend to acquire additional properties. During the six
months ended September 30, 1997, approximately $1,160,000 was paid to Local
Partnerships (of which approximately $111,000 was released from escrow). An
additional $46,000 was placed into escrow for purchase price payments during the
six months ended September 30, 1997. Although the Partnership will not be
acquiring additional properties, the Partnership may be required to fund
potential purchase price adjustments based on tax credit adjustor clauses. There
have been no purchase price adjustments during the six months ended September
30, 1997.
For the six months ended September 30, 1997, cash and cash equivalents of the
Partnership and its fifteen consolidated Local Partnerships decreased
approximately $876,000 primarily due to net cash used in operating activities
($90,000), a decrease in due to local general partners and affiliates relating
to investing activities ($139,000), improvements to property and equipment
($248,000), an increase in cash held in escrow relating to investing activities
($83,000), net principal payments from mortgage notes and construction loans
($257,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($34,000). Included in the adjustments to
reconcile the net loss to cash used
11
<PAGE>
in operating activities is depreciation and amortization of approximately
$1,809,000.
A working capital reserve in the original amount of approximately $1,473,000
(2.5% of gross equity) was established from the Partnership's funds available
for investment. At September 30, 1997 and March 31, 1997, approximately $371,000
and $493,000 of this reserve remains unused, respectively, which includes
amounts which may be required for potential purchase price adjustments based on
tax credit adjustor clauses. The General Partner believes that these reserves,
plus cash distributions received from the operations of the Local Partnerships,
will be sufficient to fund the Partnership's ongoing operations for the
foreseeable future. During the six months ended September 30, 1997 and 1996,
amounts received from operations of the Local Partnerships were approximately
$700 and $0, respectively. Management anticipates receiving distributions in the
future, although not to a level sufficient to permit providing cash
distributions to the BACs holders.
Partnership management fees owed to the General Partner amounting to
approximately $139,000 and $115,000 were accrued and unpaid as of September 30,
1997 and March 31, 1997, respectively.
For a discussion of contingencies affecting certain Local Partnerships, see Note
3 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.
However, the Partnership's loss of its investment in a Local Partnership will
eliminate the ability to generate future tax credits from such Local Partnership
and may also result in recapture of tax credits, if the investment is lost
before the expiration of the compliance period.
Management is not aware of any trends or events, commitments or uncertainties
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offering in fifteen Local Partnerships, all of which fully have their tax
credits in place. The tax credits are attached to the project for a period of
ten years, and are transferable with the property during the remainder
12
<PAGE>
of such ten-year period. If the General Partner determined that a sale of a
property is warranted, the remaining tax credits would transfer to the new
owner, thereby adding value to the property on the market, which are not
included in the financial statement carrying amount.
Results of Operations
The Partnership's results of operations for the three and six months ended
September 30, 1997 and 1996 consisted primarily of (1) approximately $22,000 and
$54,000 and $50,000 and $124,000, respectively, of tax-exempt interest income
earned on funds not currently invested in Local Partnerships and (2) the results
of the Partnership's investment in fifteen of fifteen consolidated Local
Partnerships.
For the three and six months ended September 30, 1997 as compared to 1996,
rental income and all categories of expenses except operating and taxes
increased and the results of operations are not comparable due to the
construction and rent up of properties. In addition, interest income will
decrease in future periods as proceeds are released to the Local Partnerships.
Other income decreased approximately $29,000 and $ 79,000 for the three and six
months ended September 30, 1997 as compared to 1996 primarily due to a decrease
in interest income as a result of the release of proceeds to the Local
Partnerships. Operating expenses decreased approximately $4,000 for the three
months ended September 30, 1997 as compared to 1996, primarily due to an
underaccrual of utilities at one Local Partnership in the first quarter of 1996
which was adjusted in the second quarter of 1996. Taxes expense decreased
approximately $4,000 for the three months ended September 30, 1997 as compared
to 1996, primarily due to a 50% permanent reduction of one Local Partnership's
tax assessment for which the adjustment was recorded in the second quarter of
1996. For the three months ended September 30, 1997 and 1996, two and two of the
Partnership's fifteen consolidated properties, respectively, completed
construction in a previous fiscal quarter, and were in various stages of rent
up. In addition, thirteen and ten of the properties had completed construction
and were rented up in a previous fiscal quarter. For the nine months ended
September 30, 1997 and 1996, zero and two of the Partnership's fifteen
consolidated properties, respectively, completed construction, and were in
various stages of rent up. In addition, three and zero of the properties had
completed construction in a previous fiscal year, and were in various stages of
rent up for the six months. Also, twelve and ten of the properties had completed
construction and were fully rented up in a previous fiscal year. As of the end
of the three and six months ended September 30, 1997 and 1996, zero and three of
the Partnership's fifteen consolidated properties, respectively, were still
under con-
13
<PAGE>
struction and three and four of the properties, respectively, had construction
loans with commitments for permanent financing as of September 30, 1997 and
1996.
14
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - The litigation described in Note 3 to the financial
statements contained in Part I, Item 1 of this quarterly report on Form 10-Q is
incorporated herein by reference.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior 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:
(3A) Agreement of Limited Partnership of Independence Tax Credit
Plus L.P. II as adopted on February 11, 1992*
(3B) Form of Amended and Restated Agreement of Limited Partnership
of Independence Tax Credit Plus L.P. II, attached to the Prospectus as Exhibit
A**
(3C) Certificate of Limited Partnership of Independence Tax Credit
Plus L.P. II as filed on February 11, 1992*
(10A)Form of Subscription Agreement attached to the Prospectus as
Exhibit B**
(10B)Escrow Agreement between Independence Tax Credit Plus L.P. II
and Bankers Trust Company*
(10C)Form of Purchase and Sales Agreement pertaining to the
Partnership's acquisition of Local Partnership Interests*
(10D)Form of Amended and Restated Agreement of Limited Partnership
of Local Partnerships*
(27) Financial Data Schedule (filed herewith).
*Incorporated herein as an exhibit by reference to exhibits filed
with Post-Effective Amendment No. 4 to the Registration Statement on Form S-11
(Registration No. 33-37704)
15
<PAGE>
**Incorporated herein as an exhibit by reference to exhibits filed
with Post-Effective Amendment No. 8 to the Registration Statement on Form S-11
(Registration No. 33-37704)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INDEPENDENCE TAX CREDIT PLUS L.P. II
------------------------------------
(Registrant)
By: RELATED INDEPENDENCE
ASSOCIATES L.P., General Partner
By: RELATED INDEPENDENCE
ASSOCIATES INC., General Partner
Date: November 13, 1997
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: November 13, 1997
By: /s/ Richard A. Palermo
----------------------
Richard A. Palermo,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains
summary financial
information extracted from
the financial statements for
Independence Tax Credit Plus
L.P. II and is qualified in
its entirety by reference to
such financial statements
</LEGEND>
<CIK> 0000907045
<NAME> Independence Tax Credit Plus L.P. II
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,730,843
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 392,857
<PP&E> 110,491,806
<DEPRECIATION> 7,680,723
<TOTAL-ASSETS> 110,500,545
<CURRENT-LIABILITIES> 8,481,606
<BONDS> 59,605,093
0
0
<COMMON> 0
<OTHER-SE> 42,413,846
<TOTAL-LIABILITY-AND-EQUITY> 110,500,545
<SALES> 0
<TOTAL-REVENUES> 3,864,363
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,808,743
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 999,849
<INCOME-PRETAX> (1,944,229)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,944,229)
<EPS-PRIMARY> (32.58)
<EPS-DILUTED> 0
</TABLE>
