UNITED STATES
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 June 30, 1997
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: 0-28378
AMERICAN ASSET ADVISERS TRUST, INC.
MARYLAND CORPORATION IRS IDENTIFICATION NO.
76-0410050
8 GREENWAY PLAZA, SUITE 824 HOUSTON, TX 77046
(713) 850-1400
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. X Yes No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Unaudited)
ASSETS
CASH & CASH EQUIVALENTS $ 3,020,263
PROPERTY:
Land 5,510,575
Buildings 6,471,863
11,982,438
Accumulated depreciation (255,175)
TOTAL PROPERTY 11,727,263
NET INVESTMENT IN DIRECT FINANCING LEASES 3,156,409
OTHER ASSETS:
Prepaid acquisition costs 230,036
Accrued rental income 113,571
Organization costs, net of accumulated
amortization of $192,295 121,473
Other 47,083
TOTAL OTHER ASSETS 512,163
TOTAL ASSETS 18,416,098
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable 34,444
Compensation payable 150,000
Security deposit 15,050
TOTAL LIABILITIES 199,494
MINORITY INTEREST 4,983,920
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 25,000,000 shares
authorized, 1,551,766 shares issued
and outstanding 15,518
Additional paid-in capital 13,819,450
Accumulated distributions in excess of earnings (602,284)
TOTAL SHAREHOLDERS' EQUITY 13,232,684
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,416,098
See Notes to Consolidated Financial Statements.
2
<TABLE>
<CAPTION>
AMERICAN ASSET ADVISERS TRUST, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
Quarter Year to Date
1997 1996 1997 1996
<S>
REVENUES
<C> <C> <C> <C>
Rental income from operating leases $ 270,976 $ 181,131 $ 523,586 $ 362,462
Earned income from direct financing leases 84,885 13,920 169,726 27,858
Interest income 43,819 40,226 73,347 72,529
TOTAL REVENUES 399,680 235,277 766,659 462,849
EXPENSES
Administrative 13,308 8,544 27,000 17,088
Amortization 15,689 15,447 31,377 30,894
Depreciation 31,483 28,461 59,920 56,907
Directors' fees 3,000 3,000 7,500 7,500
Interest 3,000 - 6,000 -
Legal & professional fees 12,613 3,863 32,082 14,775
State taxes 11,673 - 11,870 -
Other 6,118 3,241 13,496 8,187
TOTAL EXPENSES 96,884 62,556 189,245 135,351
INCOME BEFORE MINORITY INTEREST IN
NET INCOME OF CONSOLIDATED JOINT VENTURES 302,796 172,721 577,414 327,498
MINORITY INTEREST IN NET INCOME OF
CONSOLIDATED JOINT VENTURES (101,015) (37,342) (194,466) (74,683)
NET INCOME $ 201,781 $ 135,379 $ 382,948 $ 252,815
NET INCOME PER SHARE:
Primary $ 0.14 $ 0.13 $ 0.28 $ 0.25
Fully Diluted $ 0.13 $ 0.13 $ 0.27 $ 0.25
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING:
Primary 1,478,854 1,028,253 1,392,503 1,002,281
Fully Diluted 1,672,627 1,340,729 1,586,276 1,301,771
See Notes to Consolidated Financial Statements.
</TABLE>
3
<TABLE>
<CAPTION>
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
Quarter Year to Date
1997 1996 1997 1996
<S>
CASH FLOWS FROM OPERATING ACTIVITIES
<C> <C> <C> <C>
Net income $ 201,781 $ 135,379 $ 382,948 $ 252,815
Adjustments to reconcile net income
to net cash flows from operating activities:
Amortization 15,689 15,447 31,377 30,894
Depreciation 31,483 28,461 59,920 56,907
Decrease (increase) in accounts receivable - 103,783 5,119 (3,700)
Decrease in accounts payable (5,200) (33,083) (1,791) (49,178)
Cash receipts from direct financing leases
in excess of (less than) income recognized (2,328) 747 (4,612) 1,476
Decrease (increase) in escrow deposits,
net of minority interest partners 38,250 48,100 38,250 (51,900)
Increase in accrued rental income (19,473) (11,101) (38,946) (22,403)
Increase in organization costs - (90,506) - (181,845)
Increase in other assets (47,083) - (47,083) -
Increase in minority interest 101,015 37,342 194,466 74,683
NET CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES 314,134 234,569 619,648 107,749
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of real estate:
Accounted for under the operating
lease method (1,517,005) - (1,519,004) -
Change in prepaid acquisition costs (75,256) (10,382) (155,700) (84,388)
NET CASH FLOWS USED IN INVESTING ACTIVITIES (1,592,261) (10,382) (1,674,704) (84,388)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock, net 1,769,564 (3,891) 3,143,471 1,797,379
Distributions paid to shareholders (258,652) (180,921) (486,038) (343,645)
Distributions to minority interest partners (103,712) (42,278) (198,425) (84,556)
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 1,407,200 (227,090) 2,459,008 1,369,178
NET INCREASE IN CASH AND
CASH EQUIVALENTS 129,073 (2,903) 1,403,952 1,392,539
CASH and CASH EQUIVALENTS at beginning
of period 2,891,190 2,960,403 1,616,311 1,564,961
CASH and CASH EQUIVALENTS at end of
period $ 3,020,263 $ 2,957,500 $ 3,020,263 $ 2,957,500
See Notes to Consolidated Financial Statements.
</TABLE>
4
<TABLE>
<CAPTION>
AMERICAN ASSET ADVISERS TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
Quarter Year to Date
1997 1996 1997 1996
<S>
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING ACTIVITIES:
Real estate contributed by partners of the <C> <C> <C> <C>
consolidated joint ventures $ 1,392,780 $ - $ 1,392,780 $ -
See Notes to Consolidated Financial Statements.
</TABLE>
5
AMERICAN ASSET ADVISERS TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
American Asset Advisers Trust, Inc. ("the Company") was incorporated
on August 17, 1993 as a Maryland corporation. The initial issuance of
20,001 shares of stock for $200,010 was to American Asset Advisers
Realty Corporation ("AAA"). Commencing March 17, 1994, the Company
offered up to 2,000,000 additional shares of common stock together
with 1,000,000 warrants. The warrants are exercisable at $9 per share
until March 15, 1998. As of June 30, 1997, 504,126 warrants were
outstanding. The offering period of the initial public offering
terminated on March 15, 1996 with 1,008,252 shares being issued. On
June 18, 1996, the Company commenced a follow-on offering of up to
2,853,659 additional shares of its common stock. The offering will
terminate June 17, 1998, unless terminated earlier. As of June 30,
1997, 523,513 shares in this second offering were issued, bringing the
total shares issued and outstanding to 1,551,766 shares.
The Company was formed with the intention to qualify and to operate as
a real estate investment trust under federal tax laws. The Company
will acquire commercial and industrial properties using invested and
borrowed funds. The selection, acquisition and supervision of the
operation of properties is managed by AAA, a related party.
The consolidated financial statements include the accounts of American
Asset Advisers Trust, Inc. and its majority interest in five joint
ventures.
The financial records of the Company are maintained on the accrual
basis of accounting whereby revenues are recognized when earned and
expenses are reflected when incurred.
For purposes of the statement of cash flows the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. There has been no cash paid
for income taxes or interest during 1997 or 1996.
Real estate is leased to others on a net lease basis whereby all
operating expenses related to the properties including property taxes,
insurance and common area maintenance are the responsibility of the
tenant. The leases are accounted for under the operating method or
the direct financing method.
Under the operating lease method, the properties are recorded at cost.
Rental income is recognized ratably over the life of the lease and
depreciation is charged based upon the estimated useful life of the
property.
6
Under the direct financing lease method, properties are recorded at
their net investment. Unearned income is deferred and amortized to
income over the life of the lease so as to produce a constant periodic
rate of return.
Buildings are depreciated using the straight-line method over an
estimated useful life of 39 years.
Organization costs incurred in the formation of the Company are
amortized on a straight-line basis over five years.
Syndication costs incurred in the raising of capital through the sale
of common stock is treated as a reduction of shareholders' equity.
The Company is qualified as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, and is, therefore, not
subject to Federal income taxes provided it meets all conditions
specified by the Internal Revenue Code for retaining its REIT status,
including the requirement that at least 95% of its real estate
investment trust taxable income is distributed by March 15 of the
following year.
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all
of the disclosures required by generally accepted accounting
principles. The financial statements reflect all normal and recurring
adjustments which are, in the opinion of management, necessary to
present a fair statement of results for the three and six month
periods ended June 30, 1997 and June 30, 1996.
The financial statements of American Asset Advisers Trust, Inc.
contained herein should be read in conjunction with the financial
statements included in the Company's annual report on Form
10-K for the year ended December 31, 1996.
2. RELATED PARTY TRANSACTIONS
20,001 shares of the Company's stock are owned by AAA. The common
stock of AAA is wholly owned by the president and director of the
Company. In addition, the Company has entered into an Omnibus
Services Agreement with AAA whereby AAA provides property acquisition,
leasing, administrative and management services for the Company.
Administrative fees of $13,308 and $27,000 were incurred and paid to
AAA for the three and six months ended June 30, 1997, respectively.
Administrative fees of $8,544 and $17,088 were incurred and paid to
AAA for the three and six months ended June 30, 1996, respectively.
Certain costs have been incurred by AAA in connection with the
organization and syndication of the Company. Reimbursement of these
costs become obligations of the Company in accordance with the terms
of the offering. $48,848 and $86,840 of costs were incurred by AAA for
the three and six months ended June 30, 1997, respectively, in
connection with the issuance and marketing of the Company's stock.
$3,119 and $54,660 of costs were incurred by AAA for the three and six
months ended June 30, 1996, respectively, in connection with the
issuance and marketing of the Company's stock. These costs are
reflected as syndication costs.
7
Acquisition fees, including real estate commissions, finders fees,
consulting fees and any other non-recurring fees incurred in
connection with locating, evaluating and selecting properties and
structuring and negotiating the acquisition of properties are included
in the basis of the properties. Acquisition fees of $156,712 and
$236,775 were incurred and paid to AAA for the three and six months
ended June 30, 1997, respectively. Acquisition fees of $8,678 and
$82,684 were incurred and paid to AAA for the three and six months
ended June 30, 1996, respectively.
On August 22, 1995, the Board of Directors approved a special
compensation payment for the president in the amount of $150,000 for
services provided from August 1993 through August 1995. In connection
therewith, the Company executed a demand note payable at the earlier
of July 15, 1996 or the receipt of $10,000,000 from the Company's
initial stock offering. The note shall be payable in cash or stock
depending on the availability of cash for such payment. No
compensation arrangements were considered by the Board prior to this
time because the Company had not raised sufficient funds through its
stock offering, as determined by the judgment of the Board, considered
necessary for any compensation to be granted. The compensation had
not been accrued prior to August 22, 1995 because its payment was
uncertain and the level of compensation had not been determined until
the August 1995 Board meeting. As of the termination of the initial
public offering in March 1996, the Company had sold in excess of
$10,000,000. Although the president can demand payment on the note,
such demand has not been made. The decision regarding the nature of
the payment, whether in stock or cash, will be made by the Board of
Directors at the time the president demands payment. In consideration
that no payment has been demanded by the president for the special
compensation payment, the Board of Directors approved at its August 1,
1996 meeting the payment of interest to the president at an annual
rate of 8%. This interest payment will be paid in cash or in stock.
As of June 30, 1997, $11,000 of interest has been accrued related to
this note.
On February 11, 1997, the Company entered into a joint venture with
AAA Net Realty XI, Ltd., an affiliated entity. The joint venture was
formed for the purchase of a property which is being operated as a
Just For Feet retail store in Baton Rouge, Louisiana. The property was
purchased on June 9, 1997 after the construction was completed. The
Company's interest in the joint venture is 51%.
On September 23, 1996, the Company entered into a joint venture with
AAA Net Realty XI, Ltd., an affiliated entity. The joint venture was
formed for the purchase of a parcel of land in The Woodlands, Texas
upon which the tenant, Bank United, constructed a branch bank building
at its cost. At the termination of the lease the improvements will be
owned by the joint venture. The Company's interest in the joint
venture is 51%.
On April 5, 1996, the Company entered into a joint venture with AAA
Net Realty Fund XI, Ltd. and AAA Net Realty Fund X, Ltd., affiliated
partnerships, for the purchase of a property which is being operated
as a Just For Feet retail store in Tucson, Arizona. The property was
purchased on September 11, 1996 after the construction was completed.
The Company's interest in the joint venture is 51.9%.
On September 12, 1995, the Company entered into a joint venture
agreement with AAA Net Realty Fund XI, Ltd. for the purchase of a
property which is being operated as a Blockbuster Music Store in
Wichita, Kansas. The Company's interest in the joint venture is 51%.
8
<TABLE>
<CAPTION>
3. MAJOR TENANTS
The following schedule summarizes rental income by lessee for the
three and six months ended June 30, 1997 and June 30, 1996:
Quarter Year to Date
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Tandy Corporation $ 27,225 $ 27,225 $ 54,450 $ 54,450
America's Favorite Chicken Co. 24,482 22,842 48,964 45,902
Blockbuster Music Retail, Inc. 94,476 94,575 188,952 189,150
One Care Health Industries, Inc. 50,409 50,409 100,818 100,818
Just For Feet, Inc. 119,820 - 221,230 -
Bank United 39,449 - 78,898 -
355,861 195,051 693,312 390,320
</TABLE>
4. NET INCOME PER SHARE
The number of shares used in primary net income per share
calculations are based on the weighted average number of shares
of common stock outstanding. The number of shares used in the fully
diluted net income per share calculations are based on the
weighted average number of shares of common stock outstanding and the
assumption that the warrants were exercised using the treasury stock
method.
9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company was organized on August 17, 1993 to acquire, either
directly or through joint venture arrangements, undeveloped,
newly constructed and existing net-lease real estate that is
located primarily on corner or out-parcel locations in strong
commercial corridors, to lease on a net-lease basis to tenants
having a minimum net worth of $40 million and to hold the
properties with the expectation of equity appreciation producing
a steadily rising income stream for its shareholders.
LIQUIDITY AND CAPITAL RESOURCES
The initial issuance of 20,001 shares of stock for $200,010 was
to AAA. On March 17, 1994, the Company commenced an offering of
2,000,000 Shares of Common Stock, together with 1,000,000
Warrants (collectively "Securities"). Until the completion of the
offering in March 1996, the Securities were offered on the basis
of two (2) Shares of Common Stock and one (1) Warrant for a total
purchase price of $20.00. The Shares and Warrants are separately
transferable by an investor. Each Warrant entitles the holder to
purchase one Share for $9.00 until March 15, 1998. As of June
30, 1997, 504,126 warrants were outstanding. The offering period
for the initial public offering terminated on March 15, 1996 with
gross proceeds totaling $10,082,520 (1,008,252 shares). On June
18, 1996, the Company commenced a follow-on offering of up to
$29,250,000 (2,853,659 shares) of additional shares of its common
stock. The offering will terminate June 17, 1998 unless
terminated earlier. As of June 30, 1997, gross proceeds had been
received for $5,365,222 (523,513 shares) in this second offering
bringing the total gross proceeds to $15,647,752 (1,551,766
shares).
On August 1, 1997, the Company entered into an unsecured
revolving credit agreement with a bank for up to $7,500,000
through February 1999 (the "Credit Agreement"). The actual
amount available to the Company is dependent on certain covenants
such as the value of unencumbered assets. The Credit Agreement
currently bears interest at 2.00% over the London Interbank
Offered Rate ("LIBOR"). The Credit Agreement will be used to
acquire additional properties. As of August 14, 1997, the Credit
Agreement had not been used.
The Company has an investment strategy of acquiring properties
and leasing them under net-leases to corporations having a
minimum net worth of $40 million, which strategy minimizes the
Company's operating expenses. The Company believes that the
leases will continue to generate cash flow in excess of operating
expenses. Due to low operating expenses and ongoing cash flow,
the Company does not believe that large working capital reserves
are necessary at this time. In addition, because all leases of
the Company's Properties are and are intended to continue to be
on a net-lease basis, it is not anticipated that a large reserve
for maintenance and repairs will be necessary. The Company
intends to distribute a significant portion of its funds from
operations unless it becomes necessary to maintain additional
reserves.
10
On August 22, 1995, the Board of Directors approved a special
compensation payment for the president in the amount of $150,000
for services provided from August 1993 through August 1995. The
president has received no other compensation from the Company for
serving as its president. In connection with the special
compensation payment, the Company executed a demand note in the
amount of $150,000, the payment of which could not be demanded
prior to the earlier of July 15, 1996 or the receipt of
$10,000,000 from the Company's initial public offering. The note
is payable in cash or shares depending on the availability of
cash for such payment. No compensation arrangements were
considered by the Directors prior to August 22, 1995, because in
their judgement, the Company had not raised sufficient funds to
award such compensation. The compensation had not been accrued
prior to August 22, 1995 because its payment was uncertain and
the level of compensation had not been determined until the
August 1995 meeting of the Board of Directors. As of the
termination of the initial public offering in March 1996, the
Company had raised in excess of $10,000,000. Although the
president can demand payment on the note, such demand has not
been made. The decision regarding the nature of the payment,
whether in stock or cash, will be made by the Board of Directors
at the time the president demands payment. In consideration that
no payment has been demanded by the president for the special
compensation payment, the Board of Directors approved at its
August 1, 1996 meeting the payment of interest to the president
on the outstanding note at an annual rate of 8%. This interest
payment will be paid in cash or in stock. As of June 30, 1997,
$11,000 of interest has been accrued related to this note. Should
the note and interest be paid in cash, such payment would reduce
the funds from operations available for distribution and,
therefore, would decrease the distributions to shareholders.
As of June 30, 1997, the Company had acquired four Properties
directly and five Properties through joint ventures with related
parties and had invested $10,119,298, including certain
acquisition expenses related to the Company's investment in these
properties. These expenditures resulted in a corresponding
decrease in the Company's liquidity.
Until Properties are acquired by the Company, proceeds are held
in short-term, highly liquid investments which the Company
believes to have appropriate safety of principal. This investment
strategy has allowed, and continues to allow, high liquidity to
facilitate the Company's use of these funds to acquire properties
at such time as properties suitable for acquisition are located.
At June 30, 1997, the Company's cash and cash equivalents totaled
$3,020,263.
Inflation has had very little effect on income from operations.
Management expects that increases in store sales volumes due to
inflation as well as increases in the Consumer Price Index
(C.P.I.), may contribute to capital appreciation of the Company
Properties. These factors, however, also may have an adverse
impact on the operating margins of the tenants of the Properties.
11
RESULTS OF OPERATIONS
Revenues for the three months ended June 30, 1997 were comprised
of $355,861 from the Company's real estate operations and $43,819
from interest income. This represents an increase of $160,810 in
rental income over the three months ended June 30, 1996 and an
increase of $3,593 in interest income. The Company's rental
income was generated from nine properties during the second
quarter of 1997 compared to five properties during the second
quarter of 1996. The increase in activity also resulted in a
corresponding increase in expenses from $62,556 during the second
quarter of 1996 to $96,884 during the second quarter of 1997.
The Company recorded net income of $201,781 for the three months
ended June 30, 1997 as compared to $135,379 for the three months
ended June 30, 1996.
For the six months ended June 30, 1997, the Company's total
revenues of $766,659 were comprised of $693,312 from real estate
operations and $73,347 from interest income. The Company owned
eight properties for the entire first six months of 1997 and the
ninth property was acquired in June of 1997 while five properties
were owned for the entire first six months of 1996. Expenses
increased from $135,351 for the six months ended June 30, 1996 to
$189,245 for the six months ended June 30, 1997 primarily as a
result of the increase in activity. The Company recorded net
income of $382,948 for the six months ended June 30, 1997 as
compared to $252,815 for the six months ended June 30, 1996.
Revenues for the three months ended June 30, 1996 were comprised
of $195,051 from the Company's real estate operations and $40,226
from interest income. This represented an increase of $103,096
in rental income over the three months ended June 30, 1995 and an
increase of $3,091 in interest income. The Company's rental
income was generated from five properties during the second
quarter of 1996 compared to three properties during the second
quarter of 1995. The increase in activity also resulted in a
corresponding increase in expenses from $46,002 during the second
quarter of 1995 to $62,556 during the second quarter of 1996.
The Company recorded net income of $135,379 for the three months
ended June 30, 1996 as compared to $67,135 for the three months
ended June 30, 1995.
For the six months ended June 30, 1996, the Company's total
revenues of $462,849 were comprised of $390,320 from real estate
operations and $72,529 from interest income. As previously
discussed, the Company owned five properties for the first two
quarters of 1996 compared to three properties for the same period
in 1995. Expenses increased from $91,480 for the six months
ended June 30, 1995 to $135,351 for the six months ended June 30,
1996 and net income increased from $127,186 to $252,815 for the
same periods.
12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on
June 9, 1997. A summary of items voted on and a tabulation of
votes cast is as follows:
The following directors were elected for another one-year term.
Votes Votes
For Against Abstained
Robert S. Cartwright, Jr. 699,992 2,525 32,304
George McCanse, Jr. 699,992 2,525 32,304
H. Kerr Taylor 699,992 2,525 32,304
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
13
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.
American Asset Advisers Trust, Inc.
(Registrant)
August 14, 1997 /s/ H. Kerr Taylor
Date H. Kerr Taylor, President
August 14, 1997 /s/ L. Larry Mangum
Date L. Larry Mangum (Principal Accounting
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,020,263
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,020,263
<PP&E> 11,982,438
<DEPRECIATION> 255,175
<TOTAL-ASSETS> 18,416,098
<CURRENT-LIABILITIES> 184,444
<BONDS> 0
0
0
<COMMON> 15,518
<OTHER-SE> 13,217,166
<TOTAL-LIABILITY-AND-EQUITY> 18,416,098
<SALES> 693,312
<TOTAL-REVENUES> 766,659
<CGS> 0
<TOTAL-COSTS> 189,245
<OTHER-EXPENSES> 194,466
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 382,948
<INCOME-TAX> 0
<INCOME-CONTINUING> 382,948
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 382,948
<EPS-PRIMARY> .28
<EPS-DILUTED> .27
</TABLE>
